Shareholders in retailer, Harvey Norman have delivered a first strike against the company’s board during a tense annual general meeting at which chair Gerry Harvey claimed critics of the retailer “totally friggen mad”.
FY19 results missed forecasts. The company has announced an equity raising of $173m. Credit Suisse suspects this will exacerbate investor debates regarding gearing. The franchisee segment was affected by weaker profitability and also increased expenditure on compliance.
After a tour of the Malaysian and Singaporean operations, UBS is more positive, increasingly confident in both store targets and margin upside. The broker lifts estimates for earnings per share by 1-2% for the group and Asian operating earnings forecasts (EBITDA) by 1-9%.
UBS found little to like in the first half result, which was softer than expected. Net debt was higher and the dividend disappointed. Comments regarding capital management suggest this is less likely in the near term.
Comparables sales growth of Australian franchisees for the four months to April was up 4.8%, which implies comparables sales growth of around 2.3% over March and April. Macquarie compares this with the 7.4% recorded over January and February.