By Aimee Chanthadavong
Harvey Norman has reported a 17.5 per cent decline in its net profit for the full year ending 30 June 2013.
The electronic retailer posted a net profit of $142.2 million, down from $172.47 million that was recorded during the same period last year.
The company has attributed the profit decline to the revaluation of its properties. The recorded net property revaluation decrement was $59.12 million before tax for the current year compared to a decrement of $24.99 million before tax for the preceeding year, indicating there was a $34.13 million deterioration before tax.
Commenting on the results, Harvey Norman chairman Gerry Harvey said: “We have a property portfolio valued at $2.21 billion which provides strength and stability to our balance sheet.
“The property portfolio is a critical element in the Harvey Norman integrated retail, franchising and property system and a source of competitive advantage.”
Global sales for the year totalled $5.57 billion, which is a 3 per cent decline from last year. On a like-for-like basis, global sales decreased by 1.5 per cent. This was negatively affected by the 3 per cent deterioration in the Euro and the 0.5 per cent deterioration in the UK Pound. But this was partially offset by the 2.7 per cent appreciation in the NZ$.
However, Harvey Norman remains optimistic off the back of improved trading conditions in the second half of FY13.
“With interest rates at historical lows, Australia is seeing housing clearance rates improve and the homemaker categories Harvey Norman franchisees are operating in are benefiting from the more positive market and we would hope to see this continue into Christmas,” the company said in a statement.
The company also said deflationary pressures that previously affected its AV/IT categories have stabilised due to the devluation of the Australian dollar against most major currencies and the launch of many big screen televisions. Its home appliances, bedding and furniture categories also continued to grow solidly.
At the same time, the company believes its omni-channel strategy continues to provide its stores with a competitive advantage in the market.
“The value of Harvey Norman brand is underpinned by the integration of stores, online, mobile and local distribution centres,” Harvey said.
“This strategy will continue to deliver improved results and a sustainable and growing future.”