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Harvey Norman profit down 32pc to $176.3m
Harvey Norman profit down 32pc to $176.3m

Electrical and homewares retailer Harvey Norman’s full year profit has plunged 32 per cent due to tough trading conditions, especially for TV and electronics.

Harvey Norman made a net profit of $172.5 million in the year to June 30, down from $252.3 million in the previous year.

Chairman Gerry Harvey said 2012 was very disappointing as the closure and restructure of some of the company’s competitors led to big price falls.

"Retail categories, specifically the television and some technology categories, have been under enormous pressure with price and margin deflation,” he said.

"The liquidation of WOW Sight and Sound, the closure of numerous Retravision stores and the restructure of the Dick Smith brand created a glut of product being sold at never before seen prices."

Mr Harvey believes the retailer can increase its market share in the technology sector over the next 12 months as a result of the closure or restructure of some of its competitors.

"Within the Australian franchising operations segment, we anticipate that the home entertainment and technology category will continue to remain volatile and uncertain,” he said.

"However with further retailer and supplier rationalisation occurring, there is the opportunity for improvement.

"Whilst the predictions for market values remain flat at best, we are cautiously optimistic of consolidating and increasing our market shares in the technology categories and geographies in which we compete."

He also expected Harvey Norman’s online operations to grow over the next 12 months and deliver increased revenue.

"Continuing refinement of our digital platform will create new opportunities for growth in which we continue to invest,” he said.

"There will be an increase in the number of products that are available online in the coming year and we will continue to improve our online offer to consumers."

Harvey Norman’s earnings before interest and tax in the year to June were down 25 per cent from the previous year to $301.6 million.

The retailer will pay a fully franked dividend of four cents per share.

Harvey Norman closed down five cents, 1.7 per cent, at $2.05.