Harvey-Norman
Harvey Norman had a strong end to 2020. Photo – Creative Commons.
  • Profits and sales soared in the six months to December 2020
  • Profit after tax of $438 million (up 116%) and revenue of $2.34 billion (up 27%)
  • Some have called for the company to repay its JobKeeper payments

The pandemic has disseminated some businesses (hotels, pubs and clubs, airlines) while being a boon to others (eCommerce, local tourist spots and IT).

Major retail store Harvey Norman has had a great time, if its half-year results are any guide. Profits and sales soared in the six months to December 2020, with a reported profit after tax of $438 million (up 116%) and revenue of $2.34 billion (up 27%).

When sales rise by 27% and profits double, you know are on to a good thing. The company runs 194 franchised complexes in Australia and 107 overseas.

“The solid results delivered this half is a testament to the strength and resilience of the integrated retail, franchise, property and digital strategy and its ability to adapt and transform to the changing retail landscape and continue to navigate the uncertainties presented by COVID-19”.

Gerry Harvey, Chair, Harvey Norman

“Pleasingly, customers continued to engage strongly with our brands and importantly, 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, whilst embracing the ease of connection to our brands digitally and the important convenience of home delivery and contactless click and collect. The results achieved in 1H21 confirm the strength of our model”.

A strong model indeed, with net assets now up 14% to $3.7 billion and a net cash position of $21.7 million as at calendar year-end 2020.

JobKeeper Controversy

Some media have reported that Harvey Norman, having predicted a 30% potential fall in sales as the pandemic hit, qualified for JobKeeper payments. It is not clear how much the company received, but calculations are in the region of $6 million for the main company and even more for franchisees.

“Australian taxpayers gave Harvey Norman and franchisees $22m in JobKeeper,” Shadow Assistant Minister for Treasury Andrew Leigh said.

“They don’t need a cent of it. Firms with far smaller profits have already paid back their JobKeeper funds.

“At a time in which one million Aussies are out of work, taxpayers shouldn’t be supporting a billionaire. Time to pay it back, Gerry.”

Companies that have been known to have paid back their JobKeeper payments include Nine Entertainment, Toyota and Domino’s.

In subsequent interviews, Mr Harvey has suggested that the company would repay far more in corporate tax in any case, and that the JobKeeper amount was a “tiny amount.”

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