Re­tailer’s an­nual profit up

Kalgoorlie Miner - - BUSINESS - Mel­bourne

Re­tailer Har­vey Nor­man ex­pects the con­tin­u­ing strength in Aus­tralia’s hous­ing mar­ket will sup­port its medium-term per­for­mance.

The home­wares re­tailer’s an­nual net profit for fis­cal 2015 has risen 26.6 per cent to $268.1 mil­lion, from $211.70 mil­lion last year.

Ex­clud­ing prop­erty re­val­u­a­tions, an­nual net profit was up 19 per cent to $261.84 mil­lion, from $220.1 mil­lion.

“The out­look for the prop­erty mar­ket in Aus­tralia re­mains pos­i­tive, par­tic­u­larly new starts, ren­o­va­tion ex­pen­di­ture, and sec­ondary mar­ket clear­ance rates,” Har­vey Nor­man chair­man Gerry Har­vey said yesterday.

He said the group’s fran­chisees were per­form­ing strongly and gain­ing mar­ket share.

“I re­main pos­i­tive about the out­look for Har­vey Nor­man,” Mr Har­vey said.

The com­pany said that from July 1, 2015, to Au­gust 27, 2015 sales from fran­chisee stores were up 5.5 per cent, with like-for-like sales up 6.6 per cent on the prior cor­re­spond­ing pe­riod.

Mr Har­vey said the 2015 re­sults were good and showed the strength of the group’s in­te­grated re­tail, fran­chis­ing, prop­erty and dig­i­tal sys­tem.

“In what is still a gen­er­ally chal­leng­ing re­tail en­vi­ron­ment, we have seen fur­ther im­prove­ment in the per­for­mance of each of our busi­ness seg­ments,” he said.

The group’s in­vest­ment in its phys­i­cal stores, online sales, and mo­bile and so­cial media plat­forms, was pay­ing div­i­dends, he said.

Sales from the com­pany’s Aus­tralian fran­chisee stores on a like­for-like ba­sis rose 4.5 per cent to $4.92 bil­lion.

Strong home­wares sales were bol­stered by a re­silient residential prop­erty mar­ket, es­pe­cially in NSW where more than 35 per cent of Har­vey Nor­man com­plexes are lo­cated.

The Fed­eral Gov­ern­ment’s small busi­ness tax ini­tia­tives, an­nounced in the May 2015 bud­get, had also helped to boost fran­chisee sales rev­enue in the last quar­ter.

Strong fran­chisee sales growth meant Har­vey Nor­man could re­duce tac­ti­cal sup­port to fran­chisees.

Har­vey Nor­man said that in the com­puter cat­e­gory, sales of com­puter hard­ware, ac­ces­sories and mo­bile de­vices were solid.

Sales of wearable fit­ness and health prod­ucts con­tin­ued to ex­pand.

Com­pany-owned stores lifted profit be­fore tax by 42.9 per cent to $41.03 mil­lion. And, oper­a­tions in New Zealand out­per­formed in a com­pet­i­tive mar­ket.

In­creased brand recog­ni­tion and im­proved eco­nomic con­di­tions re­sulted in a 40 per cent drop in trad­ing losses in Ire­land and North­ern Ire­land.

This was par­tially off­set by oper­a­tions in Asia, where an ero­sion of gross mar­gins and higher costs as­so­ci­ated with new store open­ings re­sulted in a fall in prof­itabil­ity. AAP

Pic­ture: Guy Magowan

Har­vey Nor­man chair­man Gerry Har­vey says the group’s fran­chisees are per­form­ing strongly.

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