Harvey Norman’s business model bears fruit
Harvey Norman has posted a profit increase of nearly 20 per cent as lockdown measures sparked by COVID-19 fuelled a sales rush for furniture and home goods.
For the 12 months ending June 30, the retailer booked a full-year net profit of $480.5 million, a rise of 19.4 per cent on the previous corresponding period.
Harvey Norman said its slew of franchises that operated in eight different countries had benefited from increased sales between March and June due to pandemic restrictions causing heightened demand for new furniture and home entertainment.
Sales revenue for the period rose 7.6 per cent to $8.23 billion, while the group's earnings jumped 20.1 per cent to $742.5 million
Harvey Norman chairman Gerry Harvey said the results were a "testament" to the company's business model, with customers engaging strongly in both physical and online shopping.
"As we are in the lifestyle/home retail space, the customer was appreciative of the shopping experience, spaciousness and easy parking at the physical franchised complexes and stores," he said.
Harvey Norman's net assets grew 8.7 per cent over the year to $3.48 billion, while cost-cutting measures to preserve capital during the pandemic enabled the group to pay down its debts.
"The robust cashflows generated from operating activities of over a billion dollars this year, coupled with the stringent measures implemented during financial year 2020 to preserve cash, were used to pay down external debt," Mr Harvey said.
At June 30, Harvey Norman had an available unused debt lending facility worth $685 million.
Several of its franchises were eligible for the Federal Government's JobKeeper program, with Harvey Norman employees receiving $7.6 million through the wage subsidy scheme.
Its overseas operations received $22.3 million in wage support and assistance subsidies.
Originally published as Harvey Norman's business model bears fruit