Gerry Harvey spends $10m to lift his stake in Harvey Norman

Gerry Harvey says he’s “put his money where his mouth is’’ by spending $10m to boost his stake in retailer Harvey Norman.

Gerry Harvey and his wife Katie Page are taking their stake in Harvey Norman to over 30 per cent. Pic: Jerad Williams

Billionaire retailer Gerry Harvey says he has “put his money where his mouth is’’ by spending $10 million to ratchet up his stake in his bedding, furniture and whitegoods company Harvey Norman.

Mr Harvey also declared he would sell every share he owned in any other company, Australian or overseas, to pick up cheap shares in Harvey Norman.

Shares in Harvey Norman (HVN) have weakened by nearly 10 per cent since the group released its full-year results last month, with the stock suffering from a 16 per cent profit slide and a steeply discounted rights issue to raise $163.85 million.

This has prompted company co-founder and chairman Mr Harvey to wade into the market and buy up more stock.

Mr Harvey told The Australian that while he already had enough skin in the game at Harvey Norman, with his family’s holding around 30 per cent, at these prices he couldn’t resist filling his pockets with more.

“I don’t want to buy more shares I have enough already, but at these prices I would be crazy not to,’’ he told The Australian.

Documents lodged with the ASX today show Mr Harvey purchased a total of 2.3 million shares in Harvey Norman, shelling out $8.03m for the share buys. It gives him an average purchase price of $3.49 per share.

He said he had spent more money on stock since the first release went to the ASX and that his total outlay on Harvey Norman shares was about $10m.

Mr Harvey said he believed Harvey Norman was worth well over its current trading price of $3.46.

“My belief is that Harvey Norman is a $5 or $6 share not a $3 to $4 share, and from my point of view I will sell shares I’ve got in every company in Australia and overseas for Harvey Norman at that price.

“So I am putting my money where my mouth is, people say that I’m a friggin’ idiot but that’s their opinion, I have my opinion.”

Last month Harvey Norman posted a 16 per cent dive in its full-year net profit to $380.05 million. The profit slump was driven by slowing values for its swollen property portfolio and more than $70m in losses and impairments linked to its failed dairy venture. Sales for fiscal 2018 were up 8.8 per cent at $1.993bn.

Net profit before tax was down 17.1 per cent to $530.17m and underlying net profit — excluding the losses and impairments for its Coomboona dairy joint venture — was down by 0.96 per cent to $532.5m.

Harvey Norman also unveiled a renounceable pro rata entitlement offer to raise $163.85m at an offer price of $2.50 per share — a steep discount to a closing price on the day before of $3.77.

Mr Harvey and his wife, Harvey Norman managing director Katie Page, will take up their full rights entitlements to take their stake in Harvey Norman to over 30 per cent. Harvey Norman is currently valued at $3.88bn.