This article is from the Australian Property Journal archive
Harvey Norman says mainstream adoption of next-generation AI PCs and devices will drive further sales growth across multiple retail categories, as the strong performance in large format retail drove an increase in value of its $4.39 billion property portfolio.
Harvey Norman posted a 41.2% increase in profit before tax to $400.29 million in the first half.
“We have made significant strides in enhancing our digital, online and in-store experiences, alongside the strategic expansion of our global store network and targeted investments in key segments,” said chairman Gerry Harvey.
“Consumers continue to embrace the growing AI-PC market, with Harvey Norman proudly enhancing its AI foothold in the delivery of the next-gen AI technology range. The continuing innovation and mainstream adoption of next-gen AI PCs and devices are expected to drive further sales growth in the home appliances, television, audio, mobile and computer technology categories throughout FY25 and beyond.”
In Australia, the franchising operations segment profit before tax result was 26% higher, at $180.28 million, and margins lifted to 5.40%. The improvement in profitability for the segment was driven by higher revenue from franchise fees on the back of a 5.5% rise in aggregated franchisee sale revenue to $3.34 billion in the half.
Harvey Norman’s property portfolio, which it deems a “core pillar of our integrated model” delivered a property segment profit before tax of $165.81 million, an increase from $70.43 million in the prior corresponding period. This was driven by a net revaluation increment of $84.71 million in the period “due to growing investor confidence in the large format retail market, sustained rental growth and record-low vacancy rates”.
The company operated overseas retail segment saw profitability decline by 10.9% to $67.89 million, impacted by “persistent macroeconomic headwinds in New Zealand that continue to dampen consumer and business confidence”. Strategic expansion into England came with “significant country establishment costs this period, which places us in good stead for our plans to expand our retail footprint in the UK in the coming years”, it said.