Harvey Norman plays down NZ listing idea

By NZPA

Monday 17th February 2003

Homewares chain Harvey Norman is playing down a media that report that it is considering spinning off its New Zealand operations into a separately listed company.

In the Australian Financial Review today, company chairman Gerry Harvey was quoted as saying capital raised from such a spin-off would fund offshore expansion.

"If it does happen, Harvey Norman would be a majority shareholder in it but it would operate as a separately listed company."

John Skippen, Harvey Norman's Sydney-based finance director, said Mr Harvey had been talking about listing fees and raised the spin-off idea as a point of discussion only.

"It's something that right from the beginning when we went to New Zealand, one of the things that we thought about and spoke about to people, well, some day maybe the New Zealand operations may be floated off as a separate public company.

"It's been taken no further than that."

Harvey Norman pays a fee for being listed in New Zealand but notes most institutional investors buy in Australia to avoid currency fluctuations.

If the company delisted in New Zealand and publicly floated its stores here, the fees would be paid by the listed entity.

Harvey Norman is expanding quickly in New Zealand and its home country, and has long-term aims to expand farther afield.

It has 12 stores in New Zealand and plans to open eight more in response to the strong domestic economy.

Harvey Norman is expected to post a strong interim profit result on March 17. Sales in the six months to December 31 from Harvey Norman franchised stores were up 13.8 percent compared with the previous six months in Australia and New Zealand (excluding Singapore and Rebel Sport Ltd), totalling $A1.59 billion ($NZ1.72 billion).

However, Harvey Norman's share price has been struggling at four-year lows on broker concern about its exposure to Australia's peaked housing cycle, its rapid expansion programme and a potential selldown from a large institutional shareholder.

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