Offshore boost for Harvey Norman profit

Harvey Norman has lifted full-year profit by 7.2 per cent to $402.3 million as its overseas ventures offset another weak result for local franchisees.

The homeware and electronics retailer lifted total sales by 12.1 per cent to $2.23 billion for the 12 months to June 30, with its 90 company-operated offshore stores breaking through $2 billion sales barrier for the first time.

An 11.7 per cent rise in Harvey Norman’s overseas profitability to $129.70 million – including a 9.7 per cent lift in offshore revenue to $2.05 billion – offset a 2.3 per cent decline in revenue received from the company’s 195 franchised Australian complexes.

Revenue from local franchisees was $944 million for the year, with total franchisee sales down by 1.8 per cent to $5.66 billion amid a housing market downturn.

Harvey Norman said it had been a particularly tough second half in Australia, with fourth-quarter aggregate comparable sales for franchisees dropping by 1.6 per cent, for a full-year comparables sales decline of 0.9 per cent.

Harvey Norman announced a $173.49 million capital raising to manage debt but still increased its final dividend by 3.0 cents to a fully franked 21.0 cents.

Shares in the company dropped by 1.82 per cent to $4.585 by 1045 AEST, still 25 per cent higher than $3.66 a year ago.

Chairman Gerry Harvey said the company has begun replicating its successful overseas premium store format in Australia and New Zealand.

A refit is currently underway at the company’s Cairns franchised complex, while franchised complexes at Campbelltown, Balgowlah, Preston and Aspley will commence post-Christmas.

Mr Harvey also flagged further expansion plans in Malaysia.

“We intend to grow our international retail footprint and are on track with our expansion opportunities,” he said on Friday.


Be the first to comment

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.