Harvey Norman Holdings Limited (ASX: HVN) shares fell over 6% on Friday after it reported its FY19 result.
Harvey Norman Holdings is a major retailer that both operates company-run stores and also franchises Harvey Norman stores. There are Harvey Normans in Australia, New Zealand, Slovenia, Croatia, Ireland, Northern Ireland, Singapore and Malaysia. Gerry Harvey and Ian Norman opened the first store over 50 years ago in 1961.
Harvey Norman’s FY19 Report
The retailer reported that it achieved offshore retail revenue growth of 9.7% to $2.05 billion and it achieved an offshore retail profit of $129.7 million, an increase of 11.7%.
Total company-operated sales revenue grew by 12.1% to $2.23 billion and revenue received from franchisees fell by 2.3% to $943.65 million.
Harvey Norman’s EBITDA dropped by 1.5% to $697 million, but reported profit before tax (PBT) grew by 8.4% to $574.6 million and reported net profit after tax increased by 7.2% to $402.3 million.
Harvey Norman Dividend
The Board of Harvey Norman decided to declare full year dividends of 33 cents per share, meaning that the total dividend was grown by 10% from last year, representing a dividend payout ratio of 95%.
Harvey Norman Management Comments
Chairman Gerry Harvey and CEO Katie Page said: “For new stores and existing store refits going forward in the eight countries, we are taking the best elements and the Flagship fitout and design to integrate into these stores.
“We have seen good sales uplifts in our Malaysian, Singaporean, Slovenian and Irish stores, where this has been executed. We plan to start rolling this premium format out in Australia and New Zealand, as new franchised complex and store refits are due.”
Is The Harvey Norman Share Price A Buy?
It was a worrying sign to learn that Harvey Norman’s domestic stores were finding it tough in FY19, but Harvey Norman said that aggregated franchisee sales so far in FY20 had increased by 3.3% with comparable sales growth of 3%.
Harvey Norman continues to grow solidly overseas with just over 20 new stores within the next two years, with 17 of those in Singapore and Malaysia.
At under 13 times this year’s profit, it could prove to be cheap, but I am concerned about growing online retail competitors. That is one of the main reasons why I would prefer to buy shares of the free report below instead.
[ls_content_block id=”14945″ para=”paragraphs”]
[ls_content_block id=”18380″ para=”paragraphs”]
