Retailer’s annual profit up
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
Harvey Norman chairman Gerry Harvey says the group’s franchisees are performing strongly.