Harvey Norman to open five "complexes"

Harvey Norman will open five shops in Australia by June next year as it resumes its store roll-out program.

The mass-merchant retailer told shareholders today that it would open five Harvey Norman "complexes" in Australia and one in Slovenia during the 2011 financial year, following a year of consolidation in 2010.

Two shops were planned for NSW in Ballina and Narrabri; one in Victoria's Benalla and another in Morwell; and one shop in Ipswich, Queensland.

The company said it "expected to generate free net cash flow from those operations".

Additionally, two Clive Peeters complexes in Maryborough and Mt Druitt will be converted to Harvey Norman and one Clive Peeters in Queenland's Bundaberg will be converted to Joyce Mayne. Harvey Norman acquired the defunct whitegoods retailer last month.

Results

Meanwhile, Harvey Norman reported that profits from underlying business operations for the year ended 30 June increased 15.8 percent from the previous corresponding period to $290.04 million.

The franchise operations segment supported the overall performance of the group with an operating margin of 6.1 percent, producing net operating cash flow from franchising activities of $286.9 million.

Profit from continuing operations before income tax was $386.46 million compared to $348.25 million in the previous year. Total revenues from continuing operations was $2.45 billion compared to $2.5 billion resulting in a net profit after tax of $231.41 million an 8 percent increase.

Executive chairman Gerry Harvey said he was "pleased" with the result and was "determinedly optimistic about 2011 financial year." 

"This year was really a tale of two halves, with the stimulus package still providing momentum in the first half, but then we saw a considerable drop off in retail spending particular in the last two months of the year.

"The outlook for 2010/11 looks promising. Once the outcome of the federal election is announced, the boxes are ticked for consumer spending to roar," Harvey said.

Consumer Electronics

Harvey Norman said strong growth was maintained in key categories including technology. The company said being the first to market with a range of 3D products produced excellent sales.

"We are anticipating that both the AFL and NRL Grand finals In September and October will be broadcasted in 3D," he said. 

Harvey Norman owns property valued at $1.88 billion and operates 293 shops in Australia and New Zealand and Europe.