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Harvey Norman doubles profit in first half, doesn’t budge on JobKeeper

Harvey Norman doubled profit after tax during the six months to 31 December 2020.

Off the back of strong sales of $5.12 billion, including franchised Australian stores as well as company-operated international locations, net profit rose 116.3 per cent to $462 million during 1h21.

The result proves Harvey Norman’s strong strategy, chairman Gerry Harvey said, with its combination of retail, franchising, property and online coming together to help it manage costs and navigate the difficult economic scenario businesses worldwide have been faced with.

“Pleasingly, customers continued to engage strongly with our brands and importantly, as we are in the lifestyle/home retail space, the customer was appreciative of the shopping experience, spaciousness and easy parking at the physical franchises complexes and stores,” Harvey said.

“The results achieved in 1H21 confirm the strength of our model.”

During the six month period the business was brought to a positive cash position of $21.75 million, compared to a net debt position of $553 million a year prior, allowing it to invest into the business’ future and making it “well placed to respond to the challenges” moving forward.

Harvey Norman keeping JobKeeper cash

The business will pay a fully-franked interim dividend of 20 cents a share this May – a decision which has frustrated shadow assistant minister for Treasury Andrew Leigh.

“Australian taxpayers gave Harvey Norman and franchisees $22 million in JobKeeper. They don’t need a cent of it. Firms with far smaller profits have already paid back their JobKeeper funds,” Leigh said.

“At a time in which one million Aussies are out of work, taxpayers shouldn’t be supporting a billionaire. Time to pay it back, Gerry.”

Many retailers that have profited from the conditions caused by the Covid-19 pandemic have subsequently returned the money they received in government subsidies – as they needed it then, and have recovered now.

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