Harvey Norman’s profits have soared by 15.8 per cent from $250.42 million in 2009 to $290.04 million for the year ended 30 June 2010.

Harvey Norman’s franchising operations continued to underpin the overall performance of the group, with an operating margin maintained at 6.1 per cent producing net operating cash flow from franchising activities of $286.9 million.

Meanwhile, strong growth was also maintained in key categories of bedding, furniture, technology, cooking, refrigeration, laundry and seasonal products. It was also the first to market with a range of 3D products.

“Our strategy of operating in high-growth homemaker centres, where we cater for every demographic, combined with our diversity of product range, has contributed to the solid result,” Gerry Harvey, Harvey Norman chairman, says.

“This year was really a tale of two halves, with the stimulus package still providing momentum in the first half, but then we saw a considerable drop-off in retail spending, particularly in the last two months of this financial year.”

According to Harvey, the outlook for 2010/11 looks promising with the company’s recent acquisition in July of Clive Peeters and Rick Hart.

“The purchase of the Clive Peeters and Rick Hart complexes is a strong strategic fit, adding to our existing brands of Harvey Norman, Domayne and Joyce Mayne, and gives us a complementary two brand strategy in almost every state in Australia,” he says.

“We believe we can significantly grow revenue from these complexes, by utilising the skill sets of each of Harvey Norman and Clive Peeters. Clive Peeters and Rick Hart are extremely strong in whitegoods and cooking, but weaker in the Audio Visual and IT categories, while
Harvey Norman specialises in AVIT and is a leader in bringing new technologies such as 3D to market.”

Six new Harvey Norman complexes are also expected to open during 2011 – two in NSW and Victoria, one in Queensland and one in Slovenia.