Harvey Norman 1H24 Financial Results Overview

Harvey Norman Holdings Limited (ASX: $HVN) has reported its December 2023 (1H24) financial results, showcasing strong operating cashflows of $497.31 million with a cash conversion ratio of 135%. The company's net assets stand at $4.51 billion, reflecting a substantial increase of $1.23 billion since the start of the pandemic, with a 4-year CAGR of 8.3%. Despite challenging retail conditions, Harvey Norman has maintained a low net debt to equity ratio of 10.75%.

Executive Commentary on 1H24 Performance

Amid the challenging retail conditions in 1H24, we have continued to deliver sustainable growth in net assets, rising to $4.51 billion as at 31 December 2023, a substantial increase of $1.23 billion since the start of the pandemic, with a 4-year CAGR of 8.3%. Our balance sheet remains strong with total assets of $7.86 billion, anchored by a $4.14 billion property portfolio. Through efficient working capital management across key segments, we have further improved our liquidity position, with 1H24 delivering strong operating cash flows of $497.31 million at a cash conversion ratio of 135%. Our low net debt to equity ratio has continued to improve to 10.75% as at 31 December 2023. PBT was $283.58 million for 1H24, a decrease of $239.09 million or -45.7% from $522.67 million in 1H23. PBT excluding the net effects of AASB 16 and property revaluations was $303.82 million for 1H24, a reduction of $126.88 million or -29.5% from 1H23, but increased by 6.3% compared to pre-pandemic levels in 1H20.

Summary of 1H24 Results and Outlook

Harvey Norman's 1H24 financial results demonstrate the company's resilience in the face of challenging retail conditions, with a focus on sustainable growth in net assets and efficient working capital management. The company's strategic highlights during the period include building on its digital and online offerings as well as expanding its overseas footprint. Despite a decrease in PBT, Harvey Norman remains confident in the quality of its brands and market position, with a commitment to its Malaysian expansion plan and intention to grow to 80 stores by the end of 2028. The company also aims to strengthen its global footprint and is excited about the expansion of the brand in the United Kingdom. Harvey Norman has recommended the payment of a fully-franked interim dividend of 10.0 cents per share, reflecting its commitment to delivering value to shareholders.