Gerry Harvey credits franchises for huge profit increase

By Patrick Avenell

SYDNEY, NSW: Harvey Norman Holdings Limited today announced a 46.8 per cent growth in profit before income tax for the six months to 31 December 2009, compared to the same period the year before.

In a notice to the Australian Securities Exchange today, Harvey Norman reported profit before tax of $237.77 million for the first half of FY2010. This is a sharp improvement on the 2009 figure: $161.96 million.

“I am pleased with our extremely solid result and we are determinedly optimistic about the remainder of the 2010 financial year,” said Harvey Norman chairman Gerry Harvey.

Harvey singled out the group’s franchising operations for particular success attribution.

“The franchising operations segment continued to be the main driver of performance as seen by our franchising operations margin increasing to 6.7 per cent from 5.8 per cent in [H1 FY2009],” he said.

For the future, Harvey said that once a period of consolidation is completed, expansion will continue afresh with more store rollouts.

“We plan on resuming our store roll-out program in 2011,” he said. “We have entered into a joint development with IKEA to build a 72,000-square metre, 2-level, large format homemaker shopping centre at Springvale, Melbourne – [it’s] expected to be the largest and the best of its kind in Australia.”

Harvey said this centre was scheduled to open in Q1 calendar 2012.
 

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