Harvey Norman´s Shares Take a Hit

Shares of Harvey Norman [ASX:HVN] lost 4.04% today. Shares went from trading at $4.08 yesterday down to $3.91 at time of writing.

Why did the Harvey Norman Share Price Rise?

 Harvey Norman announced a ‘record breaking’ full-year profit report of $448.98 million, up by 29% from the previous year. Profit before tax was $639.81 million, an increase of 29.6% from the previous year

Yet investors aren´t buying it. Why?

Even with a record profit, the electronic giant slashed its final dividend to preserve cash. Dividend was cut by 5 cents, bringing it to 12 cents per share. This brings the full year dividend down to 26 cents, compared to 30 cents last year.

The New Zealand retail segment profit was up by 15.6% and the Singapore and Malaysia retail segment profit was also up by 69.9%.

Harvey Norman operates under a franchise system in Australia with 168 franchisees. They also have company operated stores in New Zealand, Ireland, Northern Ireland, Singapore, Malaysia, Slovenia and Croatia.

What now for Harvey Norman?

Harvey Norman´s furniture department has done well during Australia´s housing boom. The , company is expecting growth to continue as Australia´s population increases by 1 to 2 million over the next 3 years.

Yet with the housing boom slowing and with Amazon looking to set up shop in Australia, Harvey Norman could be readying for turbulence.

Selva Freigedo

Money Morning 

 

 


Selva Freigedo is an analyst at Money Morning. She has a background in financial economics, but what makes Selva´s experiences different to many are the places she has lived and worked. Born in Argentina, she has also lived in Brazil, the US, Spain, and now Australia. She has seen up close many of the economic phenomena that worry Fat Tail Investment Research readers, like hyperinflation, bank bail-ins and governments burdened with so much debt it cannot possibly be repaid.

Every week, she goes through each article, research note and recommendation produced by our experts around the world to give you information on how to build and protect your wealth. Selva packages the week’s best ideas into one easy to read report: Port Phillip Insider Extra.


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