Pre-tax profits surge 170% to €31m at Harvey Norman during pandemic

Profits at the Irish arm of Harvey Norman increased sharply to €31 million last year, latest accounts show.

New figures show that the electrical and furniture retailer recorded a 170 per cent, or €19.59 million, jump in pre-tax profits as revenues rose by 51 per cent to €411.12 million in the 12 months to the end of June last.

The increase in revenues for Harvey Norman Holdings (Ireland) Ltd was only partly explained by the retailer opening new stores at Galway in July 2020 and Sligo in November 2020 to bring the number of stores to 15 in the Republic and two in Northern Ireland.

The accounts said the new store openings “strengthened our brand further in the west of Ireland”.

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However, it noted that the 15 stores in the Republic “outperformed the discretionary retail market, with market share gains across all key product categories”.

The accounts said that the business, including its flagship outlet at Tallaght, continued to benefit from customers investing in their homes.

“Double-digit sales increases and market share growth was experienced across all product categories.”

Lockdowns

The accounts noted that during the year, the business was subject to two Covid-19 Level 5 lockdowns. During those lockdowns, Harvey Norman’s electrical and computer categories were permitted to trade in-store while furniture and bedding categories were closed.

The directors said they were pleased with the performance of its two stores in Northern Ireland despite dual challenges posed by Covid-19 and Brexit.

The group recorded after-tax profits of €28.5 million after paying corporation tax of €2.57 million.

Harvey Norman is to open a new store at Fonthill business park in west Dublin this year.

Numbers employed by the group last year increased by 359 to 1,372 as staff costs rose from €36.16 million to €55.32 million. Directors’ remuneration increased from €817,016 to €872,520.

The profit last year takes account of non-cash depreciation costs of €4.32 million. The group’s lease costs last year increased from €12.93 million to €13.94 million.

At the end of June last, the group had shareholder funds of €61.67 million. Its cash funds totalled €20.91 million.