JobKeeper repaid after stellar profit

HARVEY Norman chairman Gerry Harvey said the retailer’s success built partly on its bulging $3bn property portfolio and ambitious overseas expansion had proven the knockers wrong, with these two engines of growth proving their worth through the Covid-19 pandemic.

The whitegoods, electronics and furniture retailer on Tuesday posted a 75.1 per cent rise in full-year net profit to $841.41m as revenue for the year climbed 14.9 per cent to $9.721bn.

The retailer paid back $6.02m in JobKeeper payments it received from the federal government.

As stores across much of Australia and New Zealand remain closed, Harvey Norman is doing a roaring trade overseas, in central Europe and Ireland while the burgeoning Malaysian fleet of stores can open to customers who have been double vaccinated.

That helped bolster earnings through 2021, with the latest results showing offshore stores increasing profits by almost 60 per cent and generating one in every five dollars of pretax profits. “There are a couple of things that people have knocked us on for a number of years, and one has been going overseas but that is making around 20 per cent of our profit and we are heading towards 50 per cent, so all the people who knocked us on that are looking pretty silly,” Mr Harvey said.

Separately, Harvey Norman’s sizeable property portfolio, taking in commercial and industrial property, has shot up 11 per cent to be worth $3.37bn and a key contributor to group earnings for 2021. “We have been knocked on property relentlessly, for so long, and ... no-one can knock us on property now, our property has gone through the roof,” Mr Harvey said.

The recent lockdowns had dented momentum in Australia with same store sales down 19.1 per cent between July 1 and August 26 but up 11.9 per cent when compared to the same period in 2019 and before Covid-19 emerged. But Mr Harvey said wherever its stores remained open in Australia sales were booming.

“The evidence in Australia is that all our stores that are open are going through the roof, and especially in country areas because the country has never been this good, maybe ever,” Mr Harvey said.

For its flagship Australian business, Harvey Norman booked strong growth in technology with high demand for smart phones, gaming laptops and PCs that provide power and performance. Its Australian business posted a 12.8 per cent lift in Australian sales to $6.95bn for the year to June 30, with like for like sales better by 12.9 per cent. The retailer said there was strong demand for kitchen products and consumers also chose to upgrade and expand their outdoor entertaining areas which delivered solid growth in outdoor furniture.

Furniture and bedding categories performed well also with solid increases in beds, lounges and home office categories. In the audio visual market there was demand for big screen TVs and in-home experiences.

The final dividend was reduced to 15c per share, from 18c. But the full year dividend of 35c per share was up from 24c per share in 2020. Harvey Norman shares fell 3.2 per cent to $5.38.