Harvey celebrates hot retail market
BILLIONAIRE Gerry Harvey believes he is witnessing the best conditions in his 60 years of retailing, as his electrical, furniture and bedding chain posts a bumper first half result.
Harvey Norman booked a 116.3 per cent lift in half-year net profit to $462.03m, as revenue across its company-owned and franchisee stores jumped 25.8 per cent to $5.12bn.
The shopping boom has also flowed into 2021, with Harvey Norman saying sales are up 21 per cent in January and February.
Harvey Norman has been one of the big winners of the consumer binge through the six months to Christmas, with shoppers rushing for fridges, freezers, kitchen appliances, bedding and equipment for new home offices.
“I’ve been in retail for 60 years and nothing has ever been as good as this,” Mr Harvey said.
“I have been doing this since the late 1950s and I have never seen anything like this, and I have seen quite a few recessions and boom times and nothing has ever been as good for retail.
“And it is not just Australia, it is the rest of the world, so whatever has happened here it is happening in every country that we are in. New Zealand is no different to here.”
The veteran retailer also stuck to his guns over the repayment of JobKeeper, saying Harvey Norman had only received $3.6m in governments support payments, which he said was “a tiny amount”. Some retailers have used surging profits to pay back JobKeeper, but Mr Harvey said he would not be sending back the funds to Canberra.
Previously Mr Harvey had said he would instead pay higher taxes to the government.
“No, no, nothing has changed,” he said yesterday. “The government wanted companies to come out in good health and they put JobKeeper in and it worked well for the economy so in terms of what we received it was a tiny amount of money so we have got no reason to.”
Mr Harvey said he is not greatly concerned about a pull back in spending in 2021 as JobKeeper and other stimulus measures come to an end.
He is not convinced the JobKeeper program has been a key driver of retail spending.
“I don’t think JobKeeper has been that big a deal for retail, the bigger deal has been people not spending money on overseas holidays and restaurants and that sort of thing,” he said.
Harvey Norman declared a bumper interim dividend on the back of the record sales and profitability, announcing a December half dividend of 20c a share, up from 12c declared last year but later cancelled due to the emerging COVID-19 health crisis.
Harvey Norman said profit before tax was $643.91m, an increase of 113.8 per cent from $301.15m in the previous half year. Excluding the impact of leases and net property revaluation adjustments, profit before tax would have been $610.22m for the half year compared to $285.87m.
In Australia, Harvey Norman’s first half sales rose 27.3 per cent. In New Zealand sales were up 17.9 per cent, Slovenia and Croatia sales were up 13.7 per cent, Ireland was up 54.5 per cent, Northern Ireland sales rose 20.7 per cent, Singapore was up 1.9 per cent and Malaysia up 7.3 per cent.
I have seen quite a few recessions and boom times and nothing has ever been as good for retail.