Electronics retailer, Harvey Norman posted a 31% increase in underlying profit on Friday, saying it is in a strong position to seize on emerging opportunities.
The retailer posted a $230.15 million net profit, compared with $180.50 million in the previous corresponding period.
Basic earnings per share from continuing and discontinued operations was 21.69% for the half year, up from 17.06 previously.
Harvey Norman said that excluding one-off items and property revaluations, net profit increased to $174.1 million from the previous corresponding period of $132.87 million.
“The result has been achieved by focusing on the group’s core competencies including market leadership achieved by sustained delivery of a dynamic retail offering in the Australian and overseas markets,” the company said.
While the result to 31 December was sound, investors see tougher conditions ahead.
Harvey Norman shares fell as much as 9.7% during intraday trade. Volatile market conditions and fears about consumer spending caused many to run for cover today.
Shares in HVN closed 39 cents lower at $4.55.
The S&P/ASX 200 Index slipped 79 points to 5,572.10 as Reserve Bank’s meeting looms closer, which is widely tipped to bring another interest rate rise.
It is clear that the November rate rise and higher petrol prices didn’t have an impact on consumer spending, but including the February rate rise and another one expected next week, consumer sentiment might be damaged even further.
First-half sales from the franchised Harvey Norman, Domayne and Joyce Mayne complexes, company-owned stores in New Zealand, Slovenia, Ireland and other trading operations totalled $3.04 billion compared to $2.70 billion for the prior year, an increase of 12.4%.
During the six months for December, Harvey Norman opened 13 new stores, 5 of which were in Australia, with rollout of new complexes to continue in the second half of FY2008.
Shareholders will be paid interim dividend of 7 cents per share fully franked, up from 5 cents the prior corresponding period.
