Harvey Norman suffers fall in profits

 

17 percent down.

Retailer Harvey Norman has suffered a 16.5 percent drop in first half profits over the previous corresponding period, the company reported today.

Net profit after tax was $131.67 million compared with $158.86 million the year prior, a decrease of 17.1 percent.

Chairman Gerry Harvey blamed the profit slump on price deflation in key categories driven by the high Australian dollar, bad weather and costs incurred from buying Clive Peeters.

Earlier this month, the company said a 30 percent price deflation had "compromised revenue growth", and described the situation for electrical franchisees as “extremely difficult”. 

Global sales increased 1.3 percent, but like-for-like sales decreased 3.1 percent. 

“Our furniture and bedding categories continue to outperform the market and we also achieved strong market share growth across other product categories," Harvey said in today's financial statement. 

“Our integrated retail franchise and property system in robust and growing market share and is well placed to capitalise on any resurgence in the discrentionary retail sector."

The acquisition of 28 Clive Peeters shops in July 2010 generated a combined revenue of $124.77 million but “significant” investment costs were incurred rebuilding and restructuring the business, it said.

The consolidated result  for the half year was a loss of $20.67 million before tax.

A reduction in the profitability from franchising operations segment due to lower franchise fees collected during the period was also blamed. 

Retail operations in Singapore, Malaysia,  and Slovenia increased profit by $4.75 million before tax.

Copyright © CRN Australia. All rights reserved.

Promo


Harvey Norman suffers fall in profits
 
 
 
Top Stories
First look: Microsoft Outlook for iOS
[Update] Office productivity suite for iOS completed with Outlook.
 
NewSat defaults on $26m in overdue Lockheed payments
Jabiru-1 satellite build hits further hurdles.
 
IBM denies plans to cut 112k jobs
But admits to further restructuring.
 
 
Sign up to receive iTnews email bulletins
   FOLLOW US...
Latest Comments
Polls
Who do you trust most to protect your private data?







   |   View results
Your bank
  36%
 
Your insurance company
  5%
 
A technology company (Google, Facebook et al)
  9%
 
Your telco, ISP or utility
  8%
 
A retailer (Coles, Woolworths et al)
  4%
 
A Federal Government agency (ATO, Centrelink etc)
  18%
 
An Australian law enforcement agency (AFP, ASIO et al)
  14%
 
A State Government agency (Health dept, etc)
  7%
TOTAL VOTES: 3119

Vote
Do you support the abolition of the Office of the Information Commissioner?

   |   View results
I support shutting down the OAIC.
  27%
 
I DON'T support shutting the OAIC.
  73%
TOTAL VOTES: 999

Vote