Harvey Norman Holdings Limited (ASX: HVN) shares slumped nearly 15% on Wednesday, according to Google Finance, following the release of its half year report.
Harvey Norman Holdings is the corporate name behind the popular electrical, white goods and home furnishings retailer. Harvey Norman also has a large property business.
Harvey Norman Shares Over 3 Years
Here are the key headlines from Harvey Norman’s half year report:
- Revenue of $1.02 billion, up 4.7%
- Profit of $210 million, down 19%
- Fully franked dividends of 12 cents per share, down from 14 cents per share (what are franking credits?)
- Profit excluding significant items was up 0.8%
“The strength, stability and flexibility of our expansive, high-quality retail developments continue to be an integral point of difference, and this allows us to maximise the ability of our physical retail offerings to provide a complete interactive customer experience,” Harvey Norman Chairman Gerry Harvey said.
“We’re very much focused on raising the bar of our retail experience, and this period has seen a concerted focus towards completing our Flagship store strategy by the end of the 2018 financial year.” – Harvey
Harvey Norman’s property portfolio is valued at $2.81 billion, or 62% of the company’s total asset base, it said. The company said its balance sheet remains strong, with a robust working capital position, allowing the board to announce a fully franked dividend of 12 cents per share.
Harvey Norman’s share price fall follows the selloff of shares in rival JB Hi-Fi Limited (ASX: JBH) on the day of its results announcement. Indeed, despite reporting a 21% increase in profit the retailer’s share price was sold down by the market.
Some pundits and commentators expect the arrival of online e-commerce giant Amazon.com Inc (NASDAQ: AMZN) will begin to put pressure on incumbents such as Harvey Norman and JB HiFi.
However, late in 2017, Gerry Harvey dismissed some concerns over Amazon’s arrival. “It’s not a simple case of Amazon coming in and eating our lunch – we’ll be the most formidable competitor they’ve ever seen,” Fairfax quoted Harvey as saying. “If it gets rough we have a war chest much greater than any of our competitors in this space and we will be the last man standing.”
Harvey Norman shares were trading 14.6% lower at $3.91 on Wednesday.
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