Harvey Norman (ASX: HVN) is in the spotlight this morning after declaring a special dividend and giving an update.
What is Harvey Norman?
Harvey Norman 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.
A special dividend
The retailer announced that the directors of the company have determined to pay a fully franked special dividend of 6 cents per share. That equates to a 1.7% fully franked dividend at the current Harvey Norman share price.
The company has given an update for its overseas wholly-owned company-operated stores, its overseas majority-owned company-operated stores and the independent branded stores.
Harvey Norman’s update includes the effects of store closures relating to COVID-19.
The retailer announced that in the second half of FY20 to 31 May 2020, Australian franchisee total sales are up 17.5%.
For its overseas company-operated stores, in the second half of FY20 to 31 May 2020, in Australian dollar terms, New Zealand sales were down 7.3%, Slovenia & Croatia sales were down 5.5%, Ireland sales were up 25.4%, Northern Ireland sales were down 38.2%, Singapore sales were down 21.7% and Malaysia sales were up 1.3%.
The Harvey Norman share price is up more than 3.3% in reaction to today’s two announcements, so clearly investors like the news considering the ASX is wobbly today. I’m not a buyer of Harvey Norman though. I’d prefer to go for smaller shares with more growth potential like Bubs (ASX: BUB).
Disclosure: At the time of writing, Jaz doesn’t own shares in any of the businesses mentioned.