National furniture retailer Nick Scali (ASX: NCK) has been forced to seek a Federal Court order to release stock held up at the port following the appointment of a liquidator to one of its freight forwarders and customs agents.

Nick Scali says the liquidation led to “operational issues” which saw a significant number of containers being delayed at the ports and impacted the retailer’s ability to deliver products to its Australian customers as promised.

“To resolve the issue the company made an application to the Federal Court of Australia to seek orders for the shipping lines to release the company's containers through the giving of certain undertakings,” says Nick Scali in a statement to the ASX.

“With the court orders now granted, the company is working to have these containers delivered to its distribution centres to allow delivery of the goods to its customers as soon as practicable.”

The delays already caused by the liquidation of the freight forwarding company are expected to impact Nick Scali’s bottom line in the current financial year through “unexpected additional storage and detention costs for the containers”.

Nick Scali says it is unable to put a firm figure on the additional costs yet.

“These unexpected delays and costs are adding significant additional risks to the company's ability to achieve its prior guidance of NPAT for Australia and New Zealand in the first half FY25,” says the company.

Nick Scali had forecast net profit after tax of between $30 million and $33 million for the period, which is already down from the $43 million the company posted in the first half of FY24.

“As further details of the financial impact of these events are known, additional guidance on the financial impacts will be provided,” says Nick Scali.

At the company’s annual general meeting in October, Nick Scali chairman John Ingram revealed that “materially higher unexpected freight rates” would impact the group’s gross profit margin in FY25, particularly in the second quarter.

“We now expect the gross profit margin for the first half for Australia and New Zealand to be down 240 basis points or more compared to FY24 gross margin of 66 per cent,” he said at the time.

Ingram added that the NPAT target of $30 million to $33 million was still subject to any unforeseen shipping delays, although Nick Scali did expect to deliver sales revenue of between $217 million and $222 million in Australia and New Zealand for the current half-year.

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