Harvey Norman announces 31% decline in profit: Midday roundup

Electronics retailer Harvey Norman has announced a 40% drop in annual pre-tax profit as the company continues to struggle against a downbeat economy and thinning margins.

Pre-tax profits fell 39.2% to $227.4 million, while after tax profit dropped 31% to $172 million.

Chairman Gerry Harvey said in a statement the result was “very disappointing”.

“Specifically the television and some technology categories have been under enormous pressure with price and margin deflation.”

“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.”

Online retail sales increase in July

Online sales increased in July, according to the latest results from NAB’s monthly measure.

Sales rose 5.8% to hit 200.1 points, with annual growth accelerating to 25.4% from 18.8% in June.

The index now values online sales at $11.7 billion for the year to July, which puts online sales at 5.3% of overall retail spending.

Domestic sales increased by 24% year on year.

Shares flat on weak offshore leads

The Australian sharemarket has opened flat this morning after weak leads from the United States and European sharemarkets.

The benchmark S&P/ASX200 index was down 2.3 points to 4313.4 at 12.10 AEST, while the Australian dollar remained at $US1.03.

In the United States the Dow Jones Industrial Average fell 106 points or 0.8% to 13,000.7.

Hastings records loss in first half

Hastings Diversified Utilities Fund has recorded a net loss of $134 million for the first half of the year compared to $27 million in the previous corresponding period.

Hastings announced it will pay an interim dividend of five cents.

US consumer spending increases in July

Consumer spending increased during July, according to the latest figures from the Commerce Department in the United States of America.

The latest figures give some hope the troubled economy is improving, although analysts remain sceptical.

“Consumer spending growth remains weak despite accelerating in July. This is probably not surprising in the face of slow job growth, weak wage income growth, and low saving,” Scott Hoyt at Moody’s Analytics told AAP.

Personal incomes rose 0.3% in July, matching the forecast.

However, the growth suggests third-quarter economic growth may be better than expected.

“Consumers will not lead the recovery on a consistent basis. They simply do not have the resources. They will contribute, however, maintaining spending growth near overall economic growth pace,” Hoyt said.