Furniture and electronics retailer Harvey Norman’s half-year net profit has slumped with franchisees’ earnings falling and as the group’s dairy investments has soured.

Harvey Norman shares have plunged, falling 14 per cent to $3.94, their lowest level since November, by 1120 AEDT.

The retailer’s net profit of $207.7 million for the six months to December 31 is down 19.3 per cent on the same period a year ago, with a $20.7 million before-tax impairment hit from its dairy investment, the Coomboona Holdings joint venture, weighing on the group’s bottom line.

Harvey Norman’s result also included a $4.57 million before-tax trading loss by the Coomboona JV.

Excluding these hits and net property revaluations, underlying profit is down 1.4 per cent at $209.4 million.

The group’s Australian franchisee stores profit has fallen 2.9 per cent to $167.2 million amid stiff competition and higher staff wages due to an additional weekend trading day compared to a year ago, the company says.

Company-operated store sales revenue is up 4.7 per cent at $1.02 billion while franchise sales have lifted 4.8 per cent to $3 billion.

The company has cut its interim dividend by two cents to 12 cents a share, fully franked.

– AAP