Don't sweat the small stuff, page-12

Regarding valuation, probably interesting to look at P/B for 2 main reasons :
- still difficult to estimate short term results (both for FY 23 and FY 24),
- P/B is more relevant as it is correlated to long term ROE, while Nick Scali ROE has been quite stable in the past.

Based on this metric, Nick Scali is now valued with P/B of 5 x.
This is a major decrease :
- both vs FY 21, when Nick Scali was valued between 8.2 x (30/6/21) and 9.9 x (31/12/21),
- and vs pre-covid : average P/B of 6.7 x (looking at 30/6/17, 30/6/18, 30/6/19 and 30/6/20).

Of course, it does not mean that Nick Scali will necessarily return to its valuation pre-covid.
But it shows that today's valuation (based on P/B) already discounts a significant deterioration of its sustainable ROE.

One element which has probably supported their ROE in the short term : Plush acquisition.
As they replaced cash (which had a very low return in Nov 21) with an asset which was already profitable and generated a high level of synergies.