What does MM think of Harvey Normans (HVN) has significant property assets?

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Question asked 16/07/2022

What does MM think of Harvey Normans (HVN) has significant property assets?

Hi James, MM had a look at retail stocks recently. I am not sticking up for Harvey Norman shares but I think that subscribers should be made aware of the fact that apart from their attractive dividend, HVN is backed by Tangible assets (property) of some $ 3.5 B. This equates to around $ 2.83 per share. I think that fact is worth considering if we do head into a recession. Nothing worse that your share either going bust or close to it! ( I know this from past experience) George

Answer

Hi George,

A very valid point and one that shows the value of a long term mindset by Gerry Harvey i.e. the relative stability of rent combined with more lumpy retail sales. Of course, property is underpinned by some debt, if you want to view the latest figures for these jump on the Market Matters website on the the HVN company page: Here

You can plot the value of Long Term Investments on the chart and see the appreciation of these property assets over time – they are currently valued at ~$3bn with long term debt held against of ~$1.2bn

This is a solid company that made $743mn over the last year on revenue of $4,253mn. We have no concerns about the businesses long term viability through a recession but its share price in the short term could be a very different matter.

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Harvey Norman (HVN)

LAST UPDATED 15/07/2022 11:13

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