Harvey Norman Shares Thumped, Directors Salaries Cut, Dividends Revoked
As JB Hi Fi shares climbed 2.3% Thursday, Harvey Norman shares were nosediving falling 7% after management revoked the $0.12 cent dividend promised to shareholders on the 28th of February.
The Company also announced a 20% pay cut for 3 months for Chairman, Gerry Harvey, CEO, Katie Page, CFO Chris Mentis, and the Executive Directors, David Ackery and John Slack-Smith this is despite Prime Minister Scott Morrison claiming that the market will be affected by COVID-19 “For at least six months”.
It was only a week ago that that Chairman Gerry Harvey was being described by the Australian Financial Review as a a selfish loudmouth whose constant acting out is likely a manifestation of dementia.
This description came as he bragged about the cold hard profits he was extracting from the panic buying due to the COVID-19 epidemic. “You know, this is an opportunity,” he gloated. “Our sales are up … by 9 per cent on last year. Our sales in freezers are up 300 per cent. And what about air purifiers? Up 100 per cent!”
The cuts will only apply between (April to June 2020), the expected remuneration package of CEO Katie Page was listed in the last Annual General Report at $3.53 Million.
In a statement to the ASX Harvey Norman said Given the uncertainty regarding the duration of the COVID-19 pandemic and its potential impact on trading, and for abundance of precaution, the Board of Harvey Norman Holdings Limited has decided to revoke the decision to pay, and cancel the FY20 interim dividend of 12 cents per share, which was announced to the market on 28 February 2020″.
They added “This will result in $149.5 million of cash being retained in the business”.
They claimed that “In the present environment the Board believes that preserving cash is the most prudent course of action to protect shareholder value.
While they claimed that all Australian franchisee stores continue to trade, and all franchisee online services in Australia (click & collect and deliveries) are available the Company failed to mention how many if any Harvey Norman or franchisee staff have been laid off.
As of 4.00pm last night JB Hi Fi shares were up 2.3% to $31.71 while Harvey Norman shares were wallowing at $2.76.
During the past 12 months JB Hi Fi shares have gone from $21 to as high as $46. During the same period Harvey Norman shares have gone from $4.87 to a low of $2.35.