Harvey Norman ignores a national retail slowdown to post another record profit

Katie Page-Harvey and Gerry Harvey. Matt Roberts/Getty Images

Harvey Norman has defied a national fall in retail sales to post another record result.

The retailer of home electronics and furniture posted a net profit after tax of $257.29 million, a 38.7% rise for the six months to December.

Excluding property revaluation, profit before income tax was $290.49 million, an increase of 20.6% and the best trading result for a first half in the company’s 30-year history.

The net profit before tax includes a 14.4% rise to $172.13 million in the profitability of franchising, a net property revaluation of $75.74 million and strong improvements in company operated stores in New Zealand, Singapore and Malaysia, Ireland and Northern Ireland and Slovenia and Croatia.

A short time ago, Harvey Norman shares were up 1.2% to $5.18.

The record profit:

“The Harvey Norman model, integrating retail, franchise operations, property and digital, is adapting to and managing the evolving retail environment,” says Harvey Norman chairman Gerry Harvey.

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

Franchisee sales increased 5.2% to $2.86 billion compared to the first half of the previous year.

“Technology is changing at an ever-increasing pace and every day brings a new product to help us manage our work commitments and to better enjoy our home and leisure time,” he says.

“Consumers remain enthusiastic about enhancing their home and participating in the exciting technology available for home security, entertainment, health and fitness and communications.”

Harvey Norman’s company-operated stores achieved a net profit before tax of $51.56 million, up 22.6%.

A fully franked dividend of 14 cents a share was declared.

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