Harvey Norman succumbs to pressure, repays JobKeeper after electrified profit

Harvey Norman succumbs to pressure, repays JobKeeper after electrified profit

Australian electronics, homewares and whitegoods retailer Harvey Norman (ASX: HVN) has repaid more than $6 million in JobKeeper wage subsidies it received after posting a net profit before tax (NPBT) of $1.18 billion in FY21.

The record NPBT was up 78.8 per cent on the prior year, an increase of $521.24 million, bolstered by a boom in demand for its variety of goods which include furniture, bedding, computers, and consumer electrical products.

The company today announced it repaid all of the wages support and assistance received in Australia of $6.02 million following public pressure to do so, after chairman Gerry Harvey refused to repay JobKeeper benefits following its 1H21 profit earlier this year.

In addition to the bumper NPBT, earnings before interest, tax, depreciation and amortisation (EBITDA) was up 54.2 per cent to $1.46 billion, and net profit after tax was up 75.1 per cent to $841.41 million.

“The solid results delivered in the 2021 financial year is a testament to the strength and resilience of the integrated retail, franchise, property and digital strategy, and its ability to adapt and transition to the challenging retail landscape and continue to navigate the uncertainties presented by COVID-19,” chairman Harvey said.

“The results achieved this year demonstrates that customers continue to engage strongly with our brands and feel comfortable and safe shopping in our expansive, spacious overseas company-owned and Australian franchised complexes, with easy direct access to large showrooms and warehouses, or the various flexible ‘Contactless Click & Collect’ and ‘Contactless Delivery’ options on offer.

“We have continued to invest in technology, digital transformation and infrastructure to enable our overseas company-owned stores and Australian franchisees to enhance their ‘Shop Safe’ capabilities and bolster their customer-centric strategies.”

Harvey Norman’s balance sheet remains robust, anchored by real property assets and a strong working capital position. The value of net assets increased by $415.69 million or 12.0 per cent to $3.89 billion as at 30 June 2021, from $3.48 billion as at 30 June 2020.

“The solid cash flows generated from operating activities has enabled us to build our brand overseas and grow our businesses, refurbish our existing stores and invest in new property acquisitions and paydown external debt,” Harvey said.

Rolling lockdowns in most Australian states and territories have affected sales in July and August 2021, but the company expects spending to recover quickly once restrictions are lifted.

A fully-franked dividend of 15 cents per share has been recommended by the company’s board, to be paid on 15 November 2021.

Shares in Harvey Norman are down 1.98 per cent to $5.45 per share at 11.57am AEST.

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