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 electronics retailer posted a net profit of $142.2 million for the 2013 financial year, down from the $172.47 million figure posted for FY12. The company has attributed the decline to "competitive" trading conditions and a revaluation of the company's properties.
"This result is inclusive of a net property revaluation decrement of $59.12 million before tax for the current year compared to a decrement of $24.99 million before tax for the preceding year, a deterioriation of $34.13 million before tax," the results statement read.
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.”
Click here to sign up for our FREE daily newsletter
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 New Zealand dollar.
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 deflationary pressures that have affected AV/IT categories over the last few years appear to have stabilised. The devaluation of the Australian dollar against most major currencies and the launch of many big screen televisions has been a benefit to the AV/IT franchisees.
"The homemaker retail categories of home appliances, furniture and bedding remain stable. Our franchisees continue to perform well in these categories."
At the same time, the company believes its omni-channel strategy continues to provide its stores 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.”