Spending on furniture and electrical goods amid a buoyant housing market has helped drive Harvey Norman's half year underlying profit to a record high.
Harvey Norman's underlying profit before tax, which excludes changes in the value of its property assets, jumped 21 per cent to $290.5 million in the six months to December 31, the best first-half trading result in the group's 34-year history.
Sales rose seven per cent to $976 million at company-operated stores, and improved by 5.2 per cent at franchisee stores to $2.86 billion.
Profit growth from franchise operations of 14 per cent was due primarily to a $17 million increase in franchise fees, to $430 million, linked to increased sales.
Co-founder and executive chairman Gerry Harvey said solid sales growth reflected a rise in retail spending, particularly in NSW and Victoria, to above decade averages.
"It is underpinned by housing sector activity, lower unemployment and the wealth effect from higher home prices," Mr Harvey said in a statement.
"Consumers remain enthusiastic about enhancing their home and participating in the exciting technology available for home security, entertainment, health and fitness and communications."
Harvey Norman joins JB Hi-Fi and Nick Scali in reporting strong sales growth in the six months to December, as they benefit from strong demand for furniture and electrical goods.
The demise of consumer electronics chain Dick Smith has also contributed.
Harvey Norman did not hold a briefing for analysts to discuss its financial results on Tuesday in a highly unusual move for a publicly listed company.
It recently sent an email to the analysts saying there would be no briefing because all the necessary information would be in the documents provided to the ASX, a retail analyst told AAP.
This follows Harvey Norman's annual general meeting in November where Mr Harvey accused short sellers for instigating questions about the accounts of the company's franchisees in a bid to drive down the value of the the group's shares.
Shares in Harvey Norman were up three cents at $5.15 at 1525 AEDT.
Harvey Norman, which owns the Domayne and Joyce Mayne retail chains, had 87 company-operated stores and 193 franchised complexes in Australia at the end of December.
HOUSING BOOM LIFTS HARVEY NORMAN'S SALES
- Half year net profit up 39 pct to $257.3m
- Sales revenue up 7pct to $976.3m
- Interim dividend up 1 cent to 14 cents, fully franked