Covid dulls first-half earnings for Harvey Norman

(Source: Bigstock)

Electronics and furniture retailer Harvey Norman Holdings says Covid has impacted its profits in the first half.

Total system sales were estimated at $4.91 billion with EBIT at $754.41 million. Net profit after tax reached $430.91 million, down 6.7 per cent on the prior corresponding period.

The profits of the Australian franchising operations segment were estimated at $292.85 million for the half.

The company said overseas sales, which now account for 27 per cent of company turnover, have grown by 46.2 per cent during the past five years, although growth in the latest quarter was minimal. Overseas retail profit was down by 7 per cent, or $9.67 million. Sales decreased in New Zealand by $7.95 million due to nationwide lockdowns during the first half.

Ample inventory and cash reserves assisted in maintaining robust working capital resources and helping the business grow organically in the neighbouring regions.

Harvey Norman chairman Gerry Harvey described the result as ‘solid’ given the unprecedented times and issues encountered by the consolidated entity during this half.

“Australian franchisees were adversely affected with hard lockdowns throughout most cities and regions in NSW, Victoria and the ACT for the period of up to four months, representing retail closures of nearly 60 per cent of the total number of Australian Harvey Norman Domayne and Joyce Mayne franchised complexes for the majority of the first quarter,” he added.

The company says it plans to ramp up its premium refit plan with 40 stores to be transformed during the next five years. The refit program has been hampered by lockdowns during the first half, but stores in Fyshwick in the ACT, and at Erina in NSW, are now on track for completion by the end of this year.

Abroad, Harvey Norman says it will open up to nine new company-operated stores during the 2023 and 2024 financial years: three each in New Zealand and Malaysia, two in Croatia and one in Ireland, with one New Zealand store to be relocated.

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