Harvey Norman has reported a 17.5 per cent fall in net profit to $142.2 million in its full-year results despite improvement to trading conditions in the second half of the financial year.
The result included a net property revaluation decrement of $41.19 million. If the effects of the net property revaluation adjustment were excluded from the result the company would have seen a slip of just 3.3 per cent in net profit.
However, with interest rates at historic lows, Australia is seeing housing clearance rates improve the home maker categories.
“The home maker categories franchisees are operating in are benefiting from the more positive market and we would hope to see this continue into Christmas,” the Harvey Norman full-year report said.
“Continuing on the positive trend for the last six months, sales from the franchised Harvey Norman complexes and commercial divisions and other sales outlets in Australia increased by 5.3 per cent in July 2013, compared to July 2012.”
Global sales for July also lifted 5.3 per cent from a year earlier.
Harvey Norman’s chairman and founder Gerry Harvey said the company retained a “robust” balance sheet with a low net debt-to-equity ratio of 27.69 per cent.
“We have a property portfolio valued at $2.21 billion which provides strength and stability to our balance sheet,” he said.
“The property portfolio is a critical element in the Harvey Norman integrated retail, franchising and property system and a source of competitive advantage.”
The board will pay a fully-franked final dividend of $0.045 per share on December 2. Registered shareholders will be paid at 5pm on November 1.