Harvey Norman Holdings (HVN) H1 2025 earnings summary

Executive summary

• Profit before tax (PBT) rose 41.2% year-over-year to $400.29m, with profit after tax up 39.7% to $279.39m, driven by property revaluations, higher franchise fees, and new store openings.

• Net assets reached $4.72bn, up 4.6% from December 2023, with total assets surpassing $8bn for the first time.

• Interim fully-franked dividend increased to 12.0c per share, payable 1 May 2025.

• The integrated retail, franchise, property, and digital model delivered stable returns across eight countries despite challenging retail conditions.

Financial highlights

• EBITDA rose 22.9% to $581.42m; EBIT up 36.5% to $461.26m compared to 1H24.

• Excluding AASB16 and property revaluations, PBT was $310.46m, up 2.2% year-over-year.

• Total system sales revenue was $4.83bn, up $206.34m from 1H24, with a 5-year CAGR of 7.5%.

• Basic EPS increased to 22.42c from 16.05c in 1H24; net tangible assets per share rose to $4.14.

• Operating cash flows were $448.10m, down 9.9% from 1H24, with cash conversion at 118.8%.

Outlook and guidance

• Malaysia expansion plan extended to 2030, targeting 80 stores; 3 new stores opened in 1H25, 1 more planned for 2H25.

• Second UK store planned for 2026 after Merry Hill flagship launch; Croatia to open a major new complex in late 2026.

• New Zealand to close three small stores in 2H25 amid challenging conditions, but remains open to expansion.

• Australian franchisee sales showed strong growth in Nov-Dec 2024 and 2.4% growth in January 2025, driven by AI-PC and home appliances.

• Continued innovation and adoption of Next Gen-AI PCs and devices expected to drive sales growth in key categories throughout FY25 and beyond.