Harvey Norman Holdings (ASX:HVN) announced a strong FY15 result to market, experiencing growth property valuations, franchisee sales and retail profits.
Global sales for FY15 increased by 4.3 per cent to $6.02 billion and increased 4.6 per cent on a like-for-like basis. As a result the company reported a Net Profit after Tax (NPAT) of $268.10 million, up 26.6 per cent on the pcp. Property revaluations resulted in a net increase of $20.38 million to $8.73 million, compared to a net decrease of $11.65 in the previous year. Excluding the increase from property revaluations, NPAT increased 19.0 per cent to $261.84 million.
Harvey Norman Chairman, Gerry Harvey commented, “This is a good result that once again demonstrates the strength of our integrated retail, franchising, property and digital system. In what is still a generally challeneging retail environment, we have seen further improvement in the performance of each of our business segments.”
The company reported headline Australian franchisee sales revenue came in at $4.95 million, up 3.7 per cent. Like-for-like franchisee sales revenue increased 4.5 per cent to $4.92 billion.
The company-operated retail segment net profit before tax came in at $41.03 million, up 42.9 per cent on the pcp. The best performance came from the New Zealand market, however was offset by trading losses in Ireland and Northern Ireland as well as losses in Asia.
The company improved its balance sheet, net assets increased by 2.6 per cent to $2.56 billion, and debt-to-equity decreased to 19.88 per cent from 22.40 in the pcp. Real property assets also increased to $2.32 million, compared to $2.29 million in the pcp.
The board has recommended a fully-franked final dividend of 11.0 cents per share, to be paid on 1 December 2015 to shareholders on the register by 2 November 2015.
Harvey Norman’s share price has performed well in the last 12 months despite the recent decline in the wider market. Consistently strong results has kept investor sentiment positive. Following today’s results, the company’s share price remained relatively flat. This is likely due to the results being in line with expectations. A strong performance in NZ and progress in Ireland, bids for a strong FY16 for Harvey Norman.
Author: Ben Visser
Aug 28, 2015
Ben is a Wise-owl equity analyst focusing on ASX blue-chips stocks. Ben has a Bachelor of Business in Finance majoring in property valuations and management. In his role at Wise-owl Ben conducts in-depth fundamental and technical analysis which helps him to find profitable investment opportunities on the ASX and abroad.