“A fantastic result – it’s off the map – but our share price just dropped. It was $6 now $5.38 as we speak,” Harvey Norman chairman Gerry Harvey told Appliance Retailer shortly after the release of the company’s financial results on Tuesday.
“Two things have happened; shareholders expected a higher dividend because we only paid out 50% of our profit in dividend and sales from the end of August compared to last year are not good because of closures in NSW, Victoria and New Zealand but basically, it’s Australia.”
However, he said the group is still writing good business in computers and electricals, half on the phone and half online.
Profit before tax was $1.18 billion, an increase of 78.8% on FY20, and global sales were $9.49 billion with $6 million being repaid from JobKeeper payment.
Australian franchisees delivered a record profit result of $628.19 million, up 80.2% on the previous year. Aggregated sales rose 12.8% year-on-year with strong growth for most of the period, although sales dipped into negative territory in Q4 down 9.7%.
For 1 July to 26 August 2021, total sales for Australian franchisees decreased 19.2% with comparable sales declining 19.1%.
“We are growing our overseas business all the time because all our stores apart from Australia and New Zealand are open. Malaysia is open but customers can only enter the store if they have a double vaccination certificate which eliminates 70% of their customers for a start.”
According to Harvey, the minute stores reopen sales will go through the roof because “it’s never ending when you are selling fridges, bedding and lounges, it might falter but never stops”.
He expects some Christmas stock issues to occur but said there is plenty of product available to meet demand. “The problem is you buy stock and the store closes so you cannot sell anything. That’s OK for Harvey Norman as we have a strong balance sheet but for a small retailer it’s a different story.
“The situation in Australia and New Zealand is unique with this vision you can eliminate the virus that puts us in a position at odds with the rest of the world where you have to live with it. There are no plans to make vaccinations compulsory for staff but that could be taken out of our hands.
“Retail in a place it has never been before. We have 20,000 people working for us across the globe and have still been able to pay everyone.”