Harvey Norman optimistic despite trading loss

Gerry Harvey yesterday said retail giant Harvey Norman has suffered the worst of the financial crisis and the company is entering the recovery with a strong balance sheet, despite recording a trading loss for the 2009 financial year.

Harvey said he was “cautiously optimistic” about the company’s future, due to more franchising operations and confidence in the company’s relationships with suppliers.

Harvey Norman recorded a trading loss of $49.3 million, which the company said is mostly due to poor conditions in Ireland, while net profit from continuing operations “attributable to members” after tax declined 40.2% to $214.35 million.

Total net profit after tax and minority interests of the underlying business operations fell 15.2% from $295.14 million to $250.42 million.

Total revenue from continuing operations was $2.5 billion for the 2009 financial year, a decrease of 1.3% from last year’s $2.53 billion. But Harvey said in a statement the company is looking forward to stronger growth in the current financial year.

“We have a strong balance sheet and cash flow and we are well placed to continue to grow our core business,” he said in the company’s annual report, which was released yesterday.

“While we hold the [number one] position in the markets of white goods and technology products, our market data confirms that we are dominant in the key product areas of audio, computers and visual products such as notebooks and flat panel televisions,” he said.

“Strategies and directions are in place to maintain and grow this position in the 2010 financial year.”

Harvey’s comments come after new figures from the Australian Bureau of Statistics yesterday revealed that retail sales jumped 0.9% to $19.8 billion during August, after a decline in July as the effect of the Government’s stimulus programs declined.

Harvey’s own pay jumped 18% to $736,855, while his wife and chief executive Kay Page saw her base pay increase 36% to $947,375. But unlike last year, she did not receive a cash bonus of $500,000.