With net profit up more than 28%.
Harvey Norman has reported a record-breaking full year result with net profit after tax (NPAT) for the year ended 30 June, 2017 reaching $448.98 million, up $100.37 million from the previous year, representing a 28.8% increase. Profit before tax was $639.81 million, an increase of 29.6% from $493.76 million in the previous year.
In a statement to the ASX, Harvey Norman said, “There are a number of standouts in this net profit before tax result. A $17.74 million, or 24.3% increase in the company-operated retail segment shows strong improvements in the results of retail operations in New Zealand, Singapore, Malaysia, Ireland, Northern Ireland, Slovenia and Croatia. Likewise, a $36.38 million or 13.6% increase in the profitability of the franchising operations segment has led to a result of $304.53 million.”
Harvey Norman chairman, Gerry Harvey commented, “This is a record-breaking result that once again demonstrates the strength of our integrated retail, franchise, property and digital business spanning eight countries. In an ever-changing retail environment, our model continues to adapt and be resilient.”
In Australia, franchisee headline aggregated sales revenue has increased by 5.4% to $5.62 billion compared to the 2016 financial year. “Housing and renovation activity continues to be robust, and the large-store formats of the franchised complexes and their tech-savvy staff have really been able to showcase the integration of the latest innovations in home lifestyle technology that is really capturing the imagination and excitement of consumers.”
The strong growth in franchisee sales contributed to a 13.6% increase in the result from the franchising operations segment to $304.53 million from $268.15 million in the previous year. Higher franchisee fee revenue has resulted in a franchising operations margin of 5.42% for the financial year 2017, up from 5.03% in the 2016 financial year.
“Franchisees continue to be the dominant players in the home and lifestyle market in Australia, delivering to consumers the range of products they are looking for, with quality customer service and a brand they can trust,” Harvey said. “Each franchisee owns and controls their own business, which gives them an uncapped potential to maximise their earnings. We continue to encourage the entrepreneurial spirit of each of our franchisees.”