Harvey Norman (ASX:HVN) share price jumps following half-year results

The Harvey Norman Holdings Limited (ASX: HVN) share price is jumping today.

This morning, the retail giant released its half-year results (for the period ending 31 December 2021). In it, the company reported a drop in profit and an interim dividend of 20 cents per share.

At the time of writing, the Harvey Norman share price is up 2.91% at $5.14. To compare, the broader S&P/ASX All Ordinaries Index (ASX: XAO) is up 0.49%.

So what did the retailer announce?

Harvey Norman share price lifts on results

The retailer revealed the following financials (against its prior corresponding period of 1H21):

• Earnings before interest, taxes, depreciation and amortisation (EBITDA) down 3.3% to $754.41 million
• Revenue (total system sales) down 6.2% to $4.91 billion
• Reported profit (after tax and non-controlling interest) down 6.7% to $430.91 million
• Net assets up 7% to $4.16 billion
• Net debt to equity of 1.46%
• Earnings per share down to 34.58 cents
• Interim dividend announced (fully franked) of 20 cents per share.

While the retailer saw decreases against its 2021 first half (pcp), it fared better than the 2020 first half.

To compare, this half’s EBITDA was up 70.2% against 1H20, revenue was up 17.1%, and profit (after tax and non-controlling interest) was up 101.7%.

Similarly, its earnings per share at 34.58 cents this half is up against the 2020 period of 17.7 cents.

As such, the retailer is set to pay a fully franked interim dividend of 20 cents per share on 2 May. The company has a trailing price-to-earnings ratio (P/E) of 7.6.

Since 31 December 2021, the Harvey Norman share price has increased by 1.88%.

What else did Harvey Norman report?

Looking at its bricks and mortar, the retailer achieved a “strong” property segment during the half.

All in all, assets totalled $3.5 billion for the half — an increase of 81.3% to a profit of $197 million.

Looking at its local operations, Australian franchising was down 23.7% due to COVID-19 government-mandated closures trailing over almost four months.

The retailer saw close to 60% of its stores close due to lockdowns, including Australian Harvey Norman, Domayne and Joyce Mayne stores.

However, it saw a rebound of profitability in October last year “with the pent-up demand resulting in an acceleration in franchisee sales post lockdown”, the company said.

“This momentum continued into the Christmas trading period despite the looming threat of Omicron.”

What did management say?

Harvey Norman chair Gerry Harvey said:

This is a solid result given the unprecedented COVID-19 issues encountered by the consolidated entity during this half.

When you compare the period 1 January 2022 to 21 February 2022 to the previous corresponding period, there is sales growth in all countries, except for Ireland where sales are virtually flat against a strong prior comparable period.

We operate an integrated retail, franchise, property and digital business across eight countries — and our points of difference have proven to be our strengths validating the continued investment in our three main pillars: 108 company-operated retail stores overseas; 194 franchised complexes in Australia across all key product categories within the Home, Lifestyle and Tech markets; a resilient $3.54 billion freehold property portfolio and a $1.12 billion leasehold portfolio that anchors a strong balance sheet.

Harvey Norman share price snapshot

Since the beginning of the year, the Harvey Norman share price has increased by 1.8%. To compare, the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) has dropped by 15.7%.

The retailer has a market capitalisation of $6.21 billion.

The post Harvey Norman (ASX:HVN) share price jumps following half-year results appeared first on The Motley Fool Australia.

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Motley Fool contributor Alice de Bruin has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Harvey Norman Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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