Harvey Norman Holdings Limited reported strong FY25 financial results, driven by growth in franchisee sales, property portfolio appreciation, and digital investments. The company’s integrated retail, franchise, property, and digital system across multiple countries underpins its sustained shareholder returns.
- 25.3% increase in EBITDA to $1.13 billion
- 47.0% rise in net profit after tax to $518 million
- 6.1% growth in aggregated franchisee sales revenue to $6.43 billion
- Property portfolio valued at $4.53 billion with strong capital appreciation
- Robust balance sheet with net debt to equity ratio of 13.43%
Strong Financial Performance
Harvey Norman Holdings Limited (ASX – HVN) has delivered a robust set of financial results for the fiscal year ended June 30, 2025. The company reported a 25.3% increase in EBITDA to $1.13 billion, with EBIT rising 33.4% to $871 million. Profit before tax surged 39.0% to $753 million, while net profit after tax and non-controlling interests climbed 47.0% to $518 million. These gains reflect solid operational execution across Harvey Norman’s integrated retail, franchise, property, and digital system.
Franchise and Retail Growth
The franchising operations in Australia remain a key driver, with aggregated franchisee sales revenue increasing 6.1% to $6.43 billion. This growth was supported by a strengthening household goods cycle and rising consumer demand for AI-enabled PCs and smart devices. Overseas company-operated stores also expanded, with 121 stores across seven countries contributing $2.76 billion in sales revenue. Notably, the company launched its first flagship store in England at Merry Hill Shopping Centre, marking a significant milestone in its UK expansion strategy.
Property Portfolio Strength
Harvey Norman’s property segment continues to be a cornerstone of its business model, with a freehold investment property portfolio valued at $3.81 billion in Australia and a total property portfolio exceeding $4.53 billion globally. The portfolio benefited from a net revaluation increment of $154 million, driven by strong rental growth and low vacancy rates in the large-format retail market. The company’s strategic focus on high-quality, geographically diverse retail complexes supports stable income streams and capital appreciation.
Balance Sheet and Cash Flow
The company maintains a strong and resilient balance sheet, with total assets surpassing $8 billion for the first time. Net assets rose 6.8% year-on-year to $4.84 billion. Operating cash flows remained robust at $694 million, with a cash conversion ratio of 95.1%. The net debt to equity ratio improved to a conservative 13.43%, reflecting disciplined capital management and ample liquidity to fund future growth initiatives.
Remuneration and Governance
Harvey Norman’s remuneration framework continues to align executive incentives with company performance and shareholder interests. The short-term incentive (STI) plan rewarded executives based on a balanced scorecard of financial and non-financial KPIs, while the long-term incentive (LTI) plan is linked to return on net assets (RONA). The company’s governance practices emphasize risk management, compliance, and sustainability, underpinning its long-term strategic objectives.
Sustainability and Community Engagement
The company advanced its sustainability initiatives in FY25, focusing on diversity and inclusion, community partnerships, and environmental responsibility. Harvey Norman supports programs such as the Minerva Network for female athletes, Good360 for disadvantaged Australians, and various sports sponsorships. Environmental efforts include energy efficiency upgrades, solar installations, and waste diversion programs across its global operations.
Outlook
Early trading in FY26 shows continued momentum, with aggregated sales up 9.9% in July 2025 compared to the prior year. The company plans further expansion with new store openings and relocations in Australia, the UK, and Croatia. While macroeconomic and regulatory risks remain, Harvey Norman’s diversified model and strong capital position provide a solid foundation for sustained growth and shareholder value creation.
Bottom Line?
Harvey Norman’s FY25 results underscore its resilient integrated model, but investors will watch closely as it navigates evolving market and regulatory challenges in FY26.
Questions in the middle?
- How will Harvey Norman’s UK expansion impact profitability in the medium term?
- What are the implications of low vesting probabilities for recent LTI tranches on executive retention?
- How will macroeconomic headwinds and property market fluctuations affect future earnings and asset valuations?