Harvey Norman hits half yearly profits of $381m

Franchisees in the Harvey Norman network have seen a rise in sales which have helped deliver a bumper half year for the international chain.

The latest results for the half year to December 2016 indicate that the growth in franchisee sales helped take the franchising operations result to $172.13 million, up from the previous corresponding period of $150.42 million.

As a result of the sales boost, franchisees are paying higher franchisee fees (up $17.09 million or 4.1 percent to $430.2 million) which have lifted the franchising operation’s margin to 6 per cent for this period, up from 5.53 per cent in the December 2015 half, and the strongest return since the GFC.

Aggregated franchisee sales across the Harvey Norman, Domayne and Joyce Mayne chains are up 5.2 per cent to $2.85 billion compared to the first half of the 2016 financial year.

Chairman Gerry Harvey said “Housing continues to be robust and franchisees’ large-store formats and tech-savvy staff have been able to showcase the integration of home lifestyle and technology that is really exciting consumers.

“Our franchisees’ dominance in the home and lifestyle categories and early recognition of the potential of the Internet of Things and connected devices has seen franchisees really capitalise on consumers’ passion and demand for technology,” he said.

The company’s corporate stores brought in a net profit before tax of $51.56 million, up 22.6 per cent on the previous corresponding period.

Harvey said “The Harvey Norman model, integrating retail, franchise operations, property and digital, is adapting to and managing the evolving retail environment.”

Overall the business has hit a profit level of $381.90 million before tax, a boost of 36.6 per cent on the 2015 figures.

Looking ahead, franchisees will be able to utilise a merchandise, inventory and supplier management system to replenish inventory for most of the larger categories of merchandise by the end of the financial year 2017.

A workforce management system including staff rostering and roster optimisation has been deployed for franchisees.