Harvey Norman (ASX: HVN) slashes dividend as 1HFY23 profit falls by 15%, stock nosedives

By - Neha Simpy


  • Harvey Norman Holdings Limited (ASX: HVN) released its 1HFY23 results ended 31 December 2022 on Tuesday.
  • In 1HFY23, the company’s profit after tax declined by 15.1% to AU$365.90 million.
  • HVN board declared a 100% franked interim dividend of 13 cps, down 35% from 20 cps in the previous fiscal.

Shares of retail giant Harvey Norman Holdings Limited (ASX: HVN), which released its 1HFY23 results ended 31 December 2022 on Tuesday, 28 February 2023, were hammered as the company reported a 15% decline in its consolidated net profit and slashed interim dividends per share by 35%. At around 1:38 pm AEDT, HVN shares were trading 11.538% lower at AU$3.68, underperforming the broader ASX200 index, which was up by 0.49%.

Let’s scan through Harvey Norman’s 1HFY23 results in detail.

During the 1HFY23 period, revenues from product sales to customers declined marginally to AU$1,470.4 million against AU$1,475.4 in pcp. EBITDA was at AU$694.01 million versus AU$754.41 million in 1HFY22, a decrease of 8%, while EBIT was AU$562.37 million, decreasing from AU$637.76 million in pcp, reflecting an 11.8% decline.

The reported profit after tax & NCI declined by 15.1% to AU$365.90 million from AU$430.91 million in 1HFY22, a 15.1%. Basic earnings a share for the reported period was 29.37 cents versus 34.58 in pcp.

Harvey Norman Holdings Limited (HNHL) consolidated revenues were noted at AU$2.34 billion during 1HFY23.

Harvey Norman’s segment performances

The company’s franchised operating model in Australia is based on 170 Harvey Norman franchised complexes, 19 Domayne franchised complexes 7 Joyce Mayne.

Further, it has 547 independent franchisees running their respective businesses under brands- Harvey Norman®, Domayne® and Joyce Mayne® and 196 franchised complexes on Australian shores trading under its brands.

The Australia franchising operating division’s profit before tax was AU$237.65 million in 1HFY23, decreasing 18.9% from AU$292.85 million in pcp.

The company operates 109 Harvey Norman® branded stores in NZ, Slovenia, Croatia, Ireland, Northern Ireland, Singapore and Malaysia.

The overseas company-operated retail division delivered profit before tax was AU$99.60 million in 1HFY23, down 22.5% from pcp because of sluggish sales and contraction in gross margins.  

In 1HFY23, the property division’s profit before tax was AU$186.29 million, declining 5.8% from AU$197.74 million in pcp. This decline was because of a fall in net property revaluation increment, which was lesser than 1HFY22.

Harvey Norman’s 1HFY23 dividend

For 1HFY23, the company’s board declared a 100% franked dividend of 13 cps. This dividend amount was 35% lower than the interim dividend of 20 cps given in the previous fiscal. The distribution payment will be made on 1 May this year to stakeholders on record on 3 April this year.

Harvey Norman’s FY23 outlook

The company will keep on making an investment in technological initiatives and digital infrastructure, which is needed to boost consumer loyalty to upgrade and protect its brands.

During 2HFY23, the company is planning to inaugurate a further franchised complex in Australia and move one franchised complex to a freehold property from a leased site. Harvey Norman will continue to increase its footprint offshore with the expected opening of an additional two company-run stores (1 in the NZ region and 1 in Malaysia) in the upcoming six-month period. Also, the company said it is on track to open its third store in Croatia by the close of CY 2023.  

In FY24, the company expects to open an additional two franchised complexes in the Australian region and also plans to move two franchised complexes to freehold properties from leased sites. Besides, in the NZ region, it plans to open three new Harvey Norman-run stores in FY24 as well. The company’s initial two Harvey Norman-run stores in Budapest are also expected to open in CY 2024.

The company has plans to increase its stores in Malaysia from the current 28 to reach 80 stores by the close of the year 2028. Out of these, ten stores are expected to open in FY24, with four sites already confirmed and six stores presently under progress.