Here’s why Harvey Norman (ASX:HVN) closed in red today

Highlights

• Harvey Norman shares declined as the firm had gone ex-dividend today.
• On 2 May, eligible shareholders will receive a 20 cents dividend payout.
• Harvey Norman is a multi-national retailer that sells consumer electrical products, furniture, computers and bedding.

Retail firm, Harvey Norman Holdings Limited (ASX:HVN), bled in the red today as the company’s shares went ex-dividend. HVN slipped over 6% to close the day’s trade at AU$5.350 a share on 31 March 2022.

Harvey Norman is a multi-national retailer that sells consumer electrical products, furniture, computers and bedding.

Harvey Norman has been on a negative streak for a year with a 5% drop. On the strength of favourable investor sentiment, Harvey shares have risen almost 6% on year to date (YTD) and 9% in the last six months. In recent times, the firm has maintained its steady expansion, gaining 2% in one month.

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In addition, HVN closed in line with S&P Retail Select Industry Index. On Thursday, the index closed 4.39% down at 8,171.20 on ASX.   

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What is the meaning of ex-dividend?

The shares have gone ex-dividend, which means that any ASX investor who purchases them today or in the future will be ineligible for the upcoming interim dividend.

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When a firm’s shares approach their ex-dividend date, they tend to decrease in proportion to the dividend paid out. This is because some investors sell off their shares after obtaining the dividend.

On 2 May 2022, shareholders who are qualified for Harvey Norman’s interim dividend would be paid 20 cents per share.

Focus on interim dividend 

Harvey’s interim dividend was the focus of shareholders’ attention before the firm had gone ex-dividend. 

On 25 February 2022, Harvey reported its half-year results, with mixed performance across key financial metrics. Nonetheless, the board chose to keep the interim dividend unchanged as last year.

Here are the key highlights of Harvey’s half-year results (in comparison to its prior corresponding period of 1H21):

• Interim dividend of 20 cents per share (fully franked) declared.  
• EBITDA (Earnings before interest, taxes, depreciation, and amortisation) was AU$754.41 million, down 3.3%. 
• EPS (Earnings per share) was reported at 34.58 cents.
• Revenue dropped 6.2% to AU$4.91 billion.
• The reported profit (after tax and non-controlling interest) dropped 6.7% to AU$430.91 million.
• Net debt to equity ratio of 1.46%.

Gerry Harvey, Chairman of Harvey Norman, commented on the results

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