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Harvey Norman records “best ever trading results” for first half-year period

Harvey Norman records “best ever trading results” for first half-year period

Reveals a net profit after tax of more than $257 million, up by 39 per cent YoY

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Harvey Norman Holdings (ASX:HVN) has revealed a net profit after tax (NPAT) of $257.29 million for its first half year 2017 results, for the six months ending 31 December 2016.

The company said its “best ever trading results” for a first half-year period in its 30-year history was up $71.79 from the $185.51 million it posted in the previous corresponding period, representing a 38.7 per cent increase.

Its profit before tax amounted to $366.23 million, an increase of 39.8 per cent from the $262.01 million it recorded in the previous corresponding period. Its company-operated retail revenue amounted to $976.28 million, up seven per cent from the previous corresponding period.

Harvey Norman chairman, Gerry Harvey, said the company model, integrating retail, franchisee operations, property, and digital, is adapting to and managing the evolving retail environment.

“Our franchisees’ dominance in the home and lifestyle categories and early recognition of the potential of IoT and connected devices has seen franchisees capitalise on consumers’ passion and demand for technology,” he said.

“Technology is increasing at an ever-changing pace and … consumers remain enthusiastic about enhancing their home and participating in this exciting technology available for home security, entertainment, health, and fitness and communications.”

He mentioned that franchisee sales increased 5.2 per cent YoY to $2.86 billion, adding that the continued growth in franchisee sales contributed to a 14.4 per cent increase in the result from the franchising operations segment to $172.13 million from $150.42 million the previous corresponding period.

Harvey Norman’s company-operated retail business achieved a net profit before tax of $51.56 million, up 22.6 per cent from the $42.06 million it recorded in the December 2015 half.

“We understand this enthusiasm and our franchisees aim to be the retail destination for consumers interested in these products.”

On 14 January last year, Harvey Norman franchisee, Bunavit, was slapped with $52,000 in penalties by the Federal Court for making false or misleading representations regarding consumer guarantee rights, in proceedings brought by the Australian Competition and Consumer Commission (ACCC).

The announcement followed proceedings that were commenced by the ACCC against Gordon Superstore on 20 November 2012 and nine other Harvey Norman franchisees (including Bunavit) on 13 June 13 2013.

Subsequently, the ACCC and each of the ten Harvey Norman franchisees agreed on joint submissions and proposed orders to be put to the court for consideration.

Harvey Norman added that property underpins the company’s strength, with the portfolio valued at $2.6 billion at 31 December 2016, representing 54 per cent of the consolidated entity’s total asset base at the end of the period.

“We are seeing strong gains in brand recognition and market share and this is translating into increased sales revenue. The business has also achieved material cost efficiencies and improved supplier relationships, which has driven profitability,” Harvey said.

The company’s board has recommended the payment of a fully-franked dividend of $0.14 per share, to be paid on 2 May to shareholders, registered on 7 April.

At the time of writing, Harvey Norman’s shares were trading at $5.18.


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Tags profit gainsHarvey NormanASXfinancial results

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