Harvey Norman has announced that profit from underlying business operations for the year ended 30 June 2009 was $250.42 million, a decrease of 15.2 per cent. However, this is a substantial turnaround from the first half result which was down 29.1 per cent.
“The consolidated entity’s integrated retail, franchise and property system has proven to be resilient in achieving strong results, particularly in the second half of FY09, and our brands continue to grow market share in all key product categories,” said chairman Gerry Harvey.
“We are dominant in the technology, white goods, furniture and bedding space.”
In Australia, the franchising operations segment result and margin improved significantly during the second half of the financial year, leveraged by the positive impact of the government stimulus package.
Although trading conditions in Australia were, and remain, challenging and the product margins of Harvey Norman, Domayne and Joyce Mayne franchisees continued to be under pressure, the franchising operations segment result improved significantly during the last six months of the financial year.
The franchising operations segment result was $302.95 million for the current year compared to $291.41 million for the prior year, an increase of four per cent. The franchising operations margin was maintained at six per cent.
Written sales from the franchised Harvey Norman complexes, commercial divisions and other sales outlets in Australia for the period 1 July 2009 to 27 August 2009 have exceeded internal expectations. Gross written sales for this period increased by 7.3 per cent compared to sales for the corresponding period, and like for like sales increased by 5.7 per cent.
“We have a strong balance sheet and cash flow and are well placed to continue to grow our core business. Net cash flows from operating activities increased substantially to $442.50 million for the current financial year,” said Harvey.
During the year ended 30 June 2009, six new Harvey Norman and four new Joyce Mayne franchised complexes commenced trading, a total of 10 new franchised complexes in Australia. Three small Harvey Norman and five small Joyce Mayne leased stores in regional locations ceased trading during the year and the leased Domayne franchised store located at Campbelltown, NSW was closed. The total number of franchised complexes in Australia as at 30 June 2009 was 195 compared with 194 franchised complexes at the end of June 2008.
Harvey Norman has 264 retail complexes in Australia, New Zealand, Asia and Europe trading under the Harvey Norman, Domayne, Joyce Mayne and Norman Ross brands. Harvey Norman owns property valued at $1.82 billion.