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BREAKING NEWS: Harvey Norman Profit Up 36%

BREAKING NEWS: Harvey Norman Profit Up 36%

Net profit after tax was $111.42 million, up 36.0% from
$81.92 million in the previous corresponding period. Excluding the effects of
the net property revaluation adjustments, the net profit after tax for the half
year was $117.45 million, an increase of 3.6% over the previous period.

Global sales for the half year increased to $2.99 billion, a
3.6% increase from the previous corresponding period and a 4.9% increase on a
like-for-like basis.

Harvey Norman Chairman Gerry Harvey said: “We achieved a strong
increase in profit in an environment where consumer spending growth was modest.
This improved performance reflects sound strategic decision-making across our
business and growing traction from our Omni-channel strategy”.

He added “Our franchising operations segment recorded
improved profitability while Australian franchise sales showed strong momentum
improving on gains recorded in the September quarter to increase 1.7% on a
headline basis and 3.6% on a like for like basis in the December quarter.
That’s a pleasing set of numbers for the important Christmas trading period.”

He said that Company owned stores continue to outperform a
number of their competitors in the New Zealand market while their business in
Ireland benefitted from loss reduction measures and growing brand recognition.

Harvey said that a new IT system Asia had had an impact on
the business also contributing was a “softer consumer environment in
Singapore.”

Harvey Norman maintains a strong balance sheet, with net
assets of $2.45 billion at December 2013.

Net debt to equity improved to 24.95% at December 2013 from
27.69% at the end of FY13 to reflect strong cash generation by the business.
Real property assets totalled $2.27 billion, an increase from

$2.21 billion in June 2013 and $2.14 billion at the end of
December 2012.

Mr Harvey said: “Our property portfolio continues to
underpin the Harvey Norman business through the strength and stability it
provides. We have more than doubled our net asset base in the last nine years
and our property assets have provided a solid foundation to our integrated
retail, franchising and property system for more than three decades. To my
mind, our ownership of real property is an absolute competitive strength when
compared with the intangibles and goodwill that figure prominently on the
balance sheets of many of our competitors.”

The Board has recommended payment of a [fully franked]
interim dividend of 6.0? per share, to be paid on 5 May 2014 to shareholders
registered on 11 April 2014.