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.

AAP

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