Furniture retailer Nick Scali has bowed to political pressure and agreed to pay back the $3.6 million the company received in JobKeeper for the first half of the new financial year, with the retailer saying it benefited from a boost in consumer confidence brought on by the scheme.
In a statement to investors after market close on Monday night, the board of the retailer announced it had been considering the impact of JobKeeper on the business’ record half-yearly results, which it announced last week.
The company revealed last Thursday that its profits for the six months to the end of December had nearly doubled to $40.5 million and it intended to pay shareholders a 40 cent per share interim dividend, $4.4 million of which would go to majority shareholder and managing director Anthony Scali.
This huge jump in profits was aided by $3.6 million in JobKeeper stimulus pocketed by Nick Scali for the half, and the announcement drew the ire of some observers, including federal Labor MP Andrew Leigh.
On Monday, the retailer’s board said it was “very appreciative” of the JobKeeper program which it labelled as “highly successful” and integral to keeping people employed at the business.
Nick Scali’s board, helmed by CEO Anthony Scali has agreed to pay back $3.6 million in JobKeeper.Credit: Ben Rushton
“The JobKeeper scheme enabled the company to continue to pay employees throughout the state government-mandated closures in Melbourne throughout August, September and October, and continue to pay employees in full during other temporary COVID-related store closures in South Australia and Western Australia as recently as last week, despite the completion of the subsidy program in September,” they said.
“However, as highlighted in last week’s announcement, the company fully recognises that it has benefited from the increased consumer confidence this program has created, which resulted in record sales and net profit after tax.”
Nick Scali’s decision to refund its wage subsidy stipend means it will join the small but growing ranks of other corporates who have paid back JobKeeper. These include Toyota, Super Retail Group, Illuka, Domino’s and Coca Cola Amatil.
The business has not paid back all of its JobKeeper subsidy, however, as it claimed $3.9 million across the first six months of 2020.
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