Australian electronics, furniture and white goods retailer Harvey Norman Holdings Limited (ASX: HVN) managed to overcome global economic uncertainty to report a solid lift in first-half earnings today.
So What: For the six-month period ended 31 December 2014, Harvey Norman reported a 27.4% lift in net profit after tax (NPAT) to $141.98 million, buoyed by Australia's booming property market as well as global sales growth.
Sales grew 3.2% to $3.09 billion globally, or growth of 3.4% on a like-for-like same store basis. Due to the strong property market and low interest rates, sales in Australia were heavily weighted towards Homemaker goods. The boss, Gerry Harvey said, "The housing market in Australia is likely to remain strong, supported by record low interest rates and major infrastructure investment in NSW."
Harvey Norman also benefited from a net property increment of $3.9 million for the period, compared to an $8.6 million decrement in the prior corresponding period. Excluding the impact from this revaluation, NPAT was $139.1 million, representing an increase of 18.5%.
Having risen 1.2% today, the stock has now surged 37% since mid-December, heavily outpacing the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) and rival JB Hi-Fi Limited (ASX: JBH) in that time.
Now What: Pleasingly, the strong sales growth experienced during the half continued on into January 2015, with sales up 8% compared to the same month in 2014. Investors will be rewarded with a 9 cent, fully franked dividend which follows on from a special 14 cent fully franked dividend declared in December.
