Thank you for standing by, and welcome to the Nick Scali Limited annual general meeting. I would now like to hand the conference over to Mr John Ingram, Chairman. Please go ahead.
Good afternoon, ladies and gentlemen, welcome to Nick Scali Limited's annual general meeting for 2021. I am John Ingram. I'm the chairman of your company. As was the case last year, in accordance with COVID protocols, you, our shareholders, have been invited to participate in this meeting virtually. We believe this is in the best interest of everyone's health and safety, we encourage you to participate in the meeting online or over the phone. An online virtual meeting guide, which explains how to participate in the meeting, was released to the market and is available on our website. Before going any further, I will briefly summarize how we will conduct this, the meeting virtually. Through the online platform, you will be able to follow the presentation slides, ask a question, request a voting card, and download relevant documents.
If you have a question that you would like to ask, there are two ways to do so. Firstly, you may type questions onto the online platform. To do this, click the Ask a question button and follow the instructions. Online questions that are relevant to the business of this meeting will be read aloud to me. We may aggregate questions if we receive multiple questions on the same topic. The second way to ask a question is by phone. To do this, you must enter your pin, unique pin obtained from Link Market Services prior to the meeting. After you have dialed in, you'll be asked to mute your computer and listen to the meeting by phone. If you wish to ask a question, press star one. The moderator will ask you to your name and will introduce you to the meeting at the relevant time.
Please then unmute your phone and ask your question. We will first take questions from shareholders using the online platform and then take questions received over the phone. We will save asking each question until the relevant item of business. If you don't have a phone pin and would like to ask a question over the phone, please contact Link Market Services on 1-800-990-363 now to receive your pin. With regard to the voting of all items of business, it will be voted on by poll, which is now open. If you did not cast your vote prior to the meeting, you may cast a live vote at any time during the meeting using the online platform. Please click Get a Voting Card button and follow the instructions.
You must be logged into the online platform to cast a live vote and cannot cast a vote over the phone. Live voting on the online platform will close five minutes after the close of the meeting. If you experience any difficulties using the online platform, a helpline number is displayed at the top of the page. I confirm that where undirected proxies have been given to me, I will vote in favor of the resolution to the extent permitted. The final results will be released to the market as soon as they are available. I would like to introduce you to my fellow directors who are in attendance with me here at the office. We have non-executive directors, Ms Carole Molyneux Richards, Mr Stephen Goddard, Mr William Koeck, and our Managing Director, Mr Anthony Scali.
Also attending the meeting is the Company Secretary and Chief Financial Officer, Mr Christopher Malley, and our Audit Partner from Ernst & Young, Lisa Nissen-Smith, who will be available to answer any questions on the audit later in the meeting. I'm advised that a quorum is present and as such, we may commence the meeting. Mr Secretary, do we have any apologies?
No apologies, Mr Chairman.
Thank you. I will now address the meeting, after which the Managing Director, Anthony Scali, will address the meeting. Following the addresses which have now been released to the market, we will proceed to the formal business of the meeting. Financial year 2021 was an exceptional year for Nick Scali Limited. The company successfully navigated the operational challenges presented by the COVID pandemic to achieve a 100% increase in net profitability.
Net profit after tax for the year was AUD 84.2 million, earnings per share was AUD 1.04 per share. A fully franked final dividend of AUD 0.25 per share was paid this morning, bringing the total dividend for 2021 financial year to AUD 0.65 per share fully franked. This represents a dividend payout ratio for the full year of 63%, which the directors believe appropriately balances the distribution of profit to shareholders and the reinvestment of earnings for future growth. Due to our positive operating cash flow model and effective working capital management, the company has maintained its strong financial position over the past 12 months. After the payment of today's dividends, has cash on hand of approximately AUD 100 million. Over the last 18 months, the board has assessed various strategic opportunities to grow the business.
As announced earlier this month, the company has recently entered into an agreement to acquire Plush Think Sofas, a special sofa retailer operating a network of 46 showrooms across Australia. This acquisition is expected to be completed in November and signals an exciting new chapter in the company's growth with the combination of the two businesses consolidating the company's position as Australia's leading sofa retailer. The board recognizes that our dedicated and experienced team is our most important asset, and we continue to invest in the development of our people. I would like to take this opportunity to formally express our thanks to Mr. Anthony Scali, our Managing Director, his management team, and all the employees of the group, whose passion and commitment have been critical to the continued success of this business.
I'd also like to express my thanks to my fellow directors for their support and contribution to the success of the company. Finally, I'd like to thank you, our shareholders, for your continued support. While we are unable to be here personally with you today, I thank you for joining today's meeting and invite you to contact me directly if you have any comments or questions about the company. Thank you, ladies and gentlemen. I will now hand over to Anthony to address the meeting.
Thank you, John, and good afternoon, ladies and gentlemen. As John mentioned, FY 2021 was an exceptional year for Nick Scali, with sales revenue growing by 42%. As the company took advantage of an environment where consumers reallocated discretionary spending toward items for the home, which resulted in unprecedented trading conditions across the whole store network. Despite rising freight costs and widespread disruption to our supply chains, the company increased its gross profit margin by 80 basis points to 63.5% through reduced discounting and sales volume growth in higher margin product categories. Furthermore, the company maintained its cost of doing business at the same level as financial year 20, leveraging its distribution network to deliver the materially elevated sales revenue without increasing underlying operating expenses.
As John mentioned, net profit after tax for the year was AUD 84.2 million, up 100% on FY20. Increasing the store network remains a key pillar of growth. During the year, three new showrooms were opened at Bennetts Green, Maribyrnong, and Wairau Park in Auckland. In the first quarter of FY 2022, we've opened a further showroom at Hastings in New Zealand, bringing the current Nick Scali Furniture store network to 62 stores, 57 in Australia and five in New Zealand. We are also continuing the strategy of owning more of our retail stores and expect to complete the purchase of a new showroom in Townsville by the end of December. This site also includes a new distribution facility serving North Queensland, providing the infrastructure for further growth in this region.
Our online business grew exponentially throughout FY 2021. We expect this channel to continue to grow alongside our showroom network as the company develops further capability in this area. As announced recently, we have entered into a binding agreement to purchase the Plush business from Greenlit, with completion expected in the second quarter of FY 2022. Plush is a quality sofa retailer, positioned mid-market with 46 stores, generating sales revenue of more than AUD 120 million. In recent years, it has achieved good profit margins, which we believe will be enhanced once we reap the benefits of the synergies achievable when the business is fully integrated. We expect the Plush acquisition will be earnings per share accretive in FY 2022. Plush engages third-party logistics providers for its distribution and supply chain, which we intend to incorporate into our own managed distribution centers.
We expect further synergies in other areas of the business, such as advertising, purchasing, and management. Additionally, like Nick Scali, there is the opportunity for material growth through the expansion of the store network. We expect to more than double the number of Plush stores in the long term across Australia and New Zealand. Nick Scali team is excited and committed to ensure Plush will become a more successful business. We welcome all the Plush team to the Nick Scali Limited family. I now turn your attention to recent tradings. For the September quarter, sales revenue was in line with the previous year despite the delays caused by shipping and lockdowns in countries we source from. Whilst we incurred significant increases in freight costs, we were able to hold our margin to be in line with the previous year.
Written sales orders for the quarter were down due to the closure of more than 55% of our total store network as a result of the lockdowns in New South Wales, Victoria and New Zealand. Despite the lower sales orders, our sales order bank is broadly at the same level as the previous year due to the delays and longer lead times. Online sales orders grew in all states and was exceptionally strong in those states that were in lockdown. Whilst we have a strong order bank, it is difficult to forecast sales revenue and profitability for the second quarter given the continued supply chains disruptions we are experiencing. These include the Vietnam lockdowns, shipping delays, container availability and port congestion.
October trading has been buoyant since the reopening of New South Wales on October 11, and we expect the same to occur in Victoria when it opens. However, these elevated written sales orders will only be converted to revenue in the second half of FY 2022. I would like to take this opportunity to thank all my colleagues for their hard work during the year. I would also like to thank my fellow directors for their valuable guidance and support.
Thank you, Anthony. We now proceed to the formal business of the meeting and the resolutions before the meeting. First, first item of business deals with the company's financial statements. The meeting is to receive and consider the financial report, the director's report and the independent audit report of the company for the financial year, June 30, 2021.
No vote, no voting is required in respect to this matter. However, we would be happy to deal with any questions or comments you may have in relation to these reports or general questions to the board of Fiordilano. I will now take questions received through the online platform on the financial report, the director's report, and the independent audit report of the company.
No questions have been received, Mr. Chairman.
Thank you. I will now take questions received over the phone on the financial report, the director's report, and the independent audit report of the company.
Thank you, Mr. Chairman. There are no questions from phone participants at this time.
Thank you. The next item is Resolution 1 and deals with the remuneration report of the company. The remuneration report outlines the remuneration arrangements in place for directors and executives of the company, and summarizes the company's remuneration philosophy as well as providing details of Remuneration and Human Resources Committee, which is placed as a board subcommittee. The meeting is to consider the following as an advisory resolution: To adopt the remuneration report of the company for the year ending the 30th of June 2021, as set out on pages nine to 14 of the annual report. Under the Corporations Act, this resolution is advisory only, does not bind the directors of the company. However, we will take shareholder feedback into consideration when formulating future remuneration policies.
As detailed in the notice of meeting, members of the company's key management personnel, directors and their closely related parties are excluded from voting on this resolution, other than in their capacity as appointed proxy for the shareholder who is not excluded and who has specified how the proxy is to be voted. I will now take questions received through the online platform on the remuneration report.
No questions have been received yet, Chairman.
Thank you. I will now take questions received over the phone on the remuneration report.
Thank you, Mr. Chairman. There are no questions from phone participants at this time.
Thank you very much. I am advised the proxies have been received as follows for this resolution. For 40,211,052 votes. For open 522,950. Against 328,957. Abstentions 675,338. Voting will be by way of the voting function within the virtual meeting. We will pause for a short period to allow time for voting. The next item is Resolution 2 and deals with the re-election of Stephen Goddard as a director of the company. The meeting is to consider the following as an ordinary resolution. Sir Stephen Goddard, who retires by rotation in accordance with the company's constitution, Rule 7.1.
He has been eligible to be re-elected as a director of the company. Mr. Goddard was appointed to the board as non-executive director on 1st of March 2018. He's chairman of the Audit & Risk Committee and a member of the Remuneration and Human Resources Committee. Mr. Goddard is an experienced retailer, having held senior roles with David Jones, Officeworks, and Myer. The board considers Stephen's experience complements the board's existing skills and experience, and the other directors unanimously support his re-election. I will now take questions received through the online platform regarding Mr. Goddard's re-election.
We have no questions at this stage.
We have no questions. I will now take questions received over the phone regarding Mr. Goddard's re-election.
Thank you. There are no questions from phone participants at this time.
I'm advised that proxies have been received as follows: For, 49,062,001; Open, 533,682; Against, 3,043,006; Absent, abstentions, 139,082. Voting will be by way of the voting function within the virtual meeting. We'll pause for a short period to allow time for voting.
Chair, you can continue.
The next item is Resolution 3 and deals with the increase in maximum aggregate remuneration for non-executive directors. The meeting is to consider the following as an ordinary resolution. That for all purposes, including for the purpose of ASX Listing Rule 10.17 and the company's constitution, the maximum aggregate remuneration for the non-executive directors of the company be increased by AUD 250,000 from AUD 750,000 to AUD 1 million each financial year. The current maximum aggregate remuneration available for non-executive directors has not changed since the annual general meeting in October 2015, and is currently set at AUD 750,000, inclusive of applicable statutory superannuation contributions.
The directors consider that the increased aggregate fee pool of AUD 1 million will provide appropriate capacity for the company's future requirements and provide the necessary flexibility to operate the board with a varied number of directors to meet the oversight and governance requirements of the company, as well as the ability to attract and retain appropriately qualified directors. Based on the current board composition, it is not expected that the maximum remuneration payable will be paid to the board members in FY 2022. I will now take questions through the online platform regarding the maximum aggregate remuneration for executive directors.
We've received no questions, Mr. Chairman.
As no questions have been received, I will now take questions received over the phone regarding the maximum aggregate remuneration for non-executive directors.
Thank you, Mr. Chairman. There are no questions from phone participants at this time.
Thank you. I'm advised the proxies have been received for the following: For, 40,759,623; Open, 516,870; Against, 285,186; Abstentions, 176,618. We will now pause for a short period to allow time for voting.
Thank you, Mr. Chairman.
That concludes the formal business of the meeting. I will now take questions received on any other matters brought before the meeting.
We have two general business questions, Mr. Chairman. The first question is actually being sent to us by a shareholder on the platform. The question is: With the funding for the purchase of Plush, Nick Scali stated that they would use a mixture of debt and cash. Would you please advise how much additional debt you'll be taking on, and do you plan to pay this down quickly?
Yes, we will be taking debt on when we settle the sale of Plush. We'll be taking debt of AUD 55 billion. Yeah, AUD 55 billion or AUD 60 billion. It will be amortized over three or four years.
Thank you, Mr. Chairman. The second question was received prior to proxy close. The question is: Will the unneeded JobKeeper payments during the COVID-19 crisis from the Commonwealth Government be repaid?
We have already repaid the JobKeeper payments we received for fiscal 2021, and we've received no further JobKeeper payments.
Thank you, Mr. Chairman. That takes care of all the general business questions. Are there any general business questions on the telephone line?
Thank you. There are no questions from phone participants at this time.
Ladies and gentlemen, as there is no other business for the meeting and no further questions, I will declare the meeting closed, and thank you for your attendance. The result of today's AGM will be released to the market and are made available on the company's website as soon as possible, which should be later this afternoon. We thank you for your attendance today and your interest in the company. We look forward to meeting you next year. Thank you.