Harvey Norman profits dive in tough market

Expects local and global market conditions to remain tough, but is seeing a slight uptick in January sales

Retailer, Harvey Norman has reported a 36.5 per cent profit after tax decrease to $81.92 million, for the first half FY13 to December 31.

Compared to the same time last year, the after tax figure was $128.95 million.

Global sales fell 7.3 per cent and like-for-like sales for the same period decreased 5.3 per cent.

Harvey Norman chairman, Gerry Harvey, said conditions in Australia and global market will remain tough.

“The aggressive discounting experienced in the second half of 2012 has stabilised and we are seeing an uptick in sales,” Harvey said. “Interest rates are at historical lows, which should start moving the consumer back into the buying cycle from the savings cycle.” In January, global sales were up 3.8 per cent, and Australian sales were up 4.1 per cent.

In a statement to the ASX, the retailer said the result was inclusive of a net property revaluation decrement of $31.48 million after tax. Excluding the effects of the net property decrement, NPAT would have been $113.4 million, a decrease of 6.2 per cent compared to $120.88 million at the same time last year.

This was the result of development losses for three recently completed developments and one property in Oxley, Queensland, which was impacted by flooding.

Harvey said its balance sheet remained robust with a low net debt and it had a property portfolio valued at $2.14 billion.

“The property portfolio is a critical element in the Harvey Norman integrated retail, franchising and property system, and a source of competitive advantage,” he stated.

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