Harvey Norman Oz Tepid But Profits Up
But Harvey Norman Australian stores were tepid with sales growth of just 1% for fy14 to $4.77 billion.
Company net profit (NAPT) was up 48.9% to $211.70 million.
However, NPAT rose 20% to $220.10 million when the effects of net property revaluation adjustments were taken into account.
The retailer reported improved profitability of all operating segments, attributed to increased focus on ‘homemaker’ categories which includes appliances, omni-channel and a “moderate” improvement in consumer sentiment, said Chairman Gerry Harvey.
Harvey’s Australia fy14 sales rose just 1.1% to $4.77 bn to year end June 30 – the lowest increase of all retail franchise operations globally. On a comparable basis sales rose 3%.
“This is a solid financial result underpinned by sound strategic decision-making and the strength of our integrated retail, franchising, property and digital system,” he said.
“Continued development of our Omni Channel strategy together with a moderate improvement in consumer sentiment fuelled consecutive quarterly growth in Australian franchisee like for like sales, despite some short term weakness associated with the Federal Budget and a generally challenging retail environment.”
Global sales were A$5.77 bn for fy14 to June 30 – up 3.5%.
Sales across all global operations rose significantly including New Zealand, Singapore, Northern Ireland and Slovenia, on a like-for-like basis.
NZ sales rose 10%, and Ireland sales lifted 23%, on a comparable store basis.
The retailer attributed the lift in profitability to increased focus on homemaker categories which resulted in higher profitability across its 198 franchising operations in Australia. Tactical support to franchisees was cut by 19.7%.
The boisterous Chairman said it was ” was particularly pleasing to see improved performances from each of our business segment.”
Mr Harvey also has a positive outlook for FY15, on the back of a robust housing market.
“With a robust outlook for the housing market in Australia, we are well-placed to harness our market-leading position in the homemaker categories to build market share and deliver improved performance.
“Market conditions, together with our consistent strategy and operational focus, gives me confidence in the outlook for Harvey Norman.”
Sales for July and August were also ‘stable’.
Company shares rose 6% to $3.49 today.