Retail giant Harvey Norman has repaid millions of the JobKeeper cash it received after reporting record profits for its Australian stores.
Harvey Norman has repaid millions of the JobKeeper money it received after again reporting record earnings.
The retail giant reported full-year net profit of $841.4m, up 75 per cent, on the final official day of earnings season on Tuesday, with chairman Gerry Harvey saying “solid” cashflows had allowed the company to expand.
The Australian franchises were standout performers, achieving a record profit of $628.19m, up 80.2 per cent.
Its offshore business generated profits of $240.79m across seven countries, up 58.3 per cent, while property earnings jumped 68.3 per cent to $291.54m.
A dozen new company-operated stores opened during 2020-21 – all earlier than expected in the first half of the financial year – and one new premium-format franchised complex opened but three small-format franchised stores were closed.
Mr Harvey said the numbers were testament to the company’s strategy, including online sales, and its ability to adapt to the big challenges faced by the retail sector during the pandemic.
“Customers continue to engage strongly with our brands and feel comfortable and safe shopping in our expansive, spacious overseas company-owned and Australian franchised complexes, with easy direct access to large showrooms and warehouses, or the various flexible ‘contactless click and collect’ and ‘contactless delivery’ options,” Mr Harvey said.
Harvey Norman also reported that it this month repaid $6.02m in JobKeeper received by “controlled entities” in Australia – comprising $3.63m for 2020-21 and $2.39m for the previous financial year – to the federal government.
But the retailer made no mention of money handed to franchises.
Harvey Norman’s company-operated stores in Malaysia, Singapore, Northern Ireland and Slovenia also received $4.43m in wages support and assistance in 2020-21.
Retailers that have also returned JobKeeper include Nick Scali and Solomon Lew’s Premier Investments, which owns Just Jeans and Smiggle, both following public outcry after posting profits.
Mr Harvey said solid cash flows had enabled his company to build its brand overseas and grow the businesses, refurbish existing stores, invest in new property acquisitions and pay down debt.
About a year ago, as it became apparent Harvey Norman had not only withstood the impact of the pandemic but was on track to post record results, the billionaire businessman revealed the winning strategy had been to contact suppliers and buy orders cancelled by other retailers as they closed their doors, stockpiling a massive inventory in a move he described as “a calculated gamble”.
He also credited spaciousness in stores and easy parking.
In its latest results, the company said that with more than half of Australia’s population in lockdown in July and August, sales had been affected despite the contactless click and collect and home delivery options at 192 stores.
“However, we expect spending to recover quickly as we saw when lockdown restrictions were eased in our overseas markets due to pent-up demand,” the company said.
And there was still “elevated” customer demand compared to the same period in 2019, Mr Harvey said, excluding lockdown-hit Malaysia.
Harvey Norman declared a final dividend of 15 cents per share, bringing the full-year payout to shareholders to 35 cents per share, up from 24 cents for the previous financial year when the interim dividend was cancelled.
The company plans more store openings this financial year and next in Australia, Ireland, Croatia, Malaysia and New Zealand.
Originally published as Harvey Norman pays back JobKeeper cash after reporting record profits
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