Harvey Norman shares tumble despite big profit growth
· Michael West
Harvey Norman has delivered double-digit sales growth and raised its dividend, but the retailer’s shares have taken a tumble.
The electronics and homewares retailer on Friday announced it had made a $466.31 million profit before tax for the half-year to December 31, up 16.5 per cent from a year ago.
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Excluding the impact of property revaluations and leases, its profit before tax rose 20.1 per cent to $372.8 million, with system sales revenue up 6.9 per cent to $5.2 billion.
FNArena founder Rudi Filapek-Vandyck tweeted that according to Citi, the interim report had missed forecasts on most key financial metrics.
Harvey Norman’s half-year results are up compared to the previous corresponding periods. (Susie Dodds/AAP PHOTOS)Harvey Norman executive chairman Gerry Harvey said he was mystified by the slide in shares.
The company thought it was a “reasonably good result, and would have thought the shares would have gone up, not down,” Mr Harvey told AAP
Sales at the company’s 196 Australian franchisees rose 4.8 per cent to $3.5 billion, which the company said reflected continued demand across technology-led products, particularly AI-enabled computing and mobile devices.
Mr Harvey said its franchisees’ Australian sales had been “very good across the board”, and its company-owned international operations, which span seven countries, were going “pretty good”.
“We think Malaysia and Singapore are going to get stronger and stronger,” he said.
Gerry Harvey believes the market doesn’t understand the Harvey Norman business model. (Jono Searle/AAP PHOTOS)Harvey Norman will pay a fully franked interim dividend of 14.5 cents per share, up 20.8 per cent from its 12 cent interim dividend a year ago.
Harvey Norman shares closed Friday down 9.0 per cent to $5.76, their lowest level since early August.
Mr Harvey said Harvey Norman continued to be misunderstood and under-appreciated by the market.
“Harvey Norman is not a retailer as such. It’s a retailer-property company,” he said.
It was continually compared to JB Hi-Fi or the Good Guys, which owned no property, while Harvey Norman owned vast amounts of real estate across the world, Mr Harvey said.
“We’re a very different retailer, because we’re a property owner and retailer,” he said.