Harvey Norman reports NZ losses

Harvey Norman reported a downturn in sales in their annual finance report, with trading across New Zealand falling by 4%.

The electronics retailer reported a 7% decline in group sales at its franchise stores to $A5.74 billion in the year ended June 30.

Based in Sydney, Harvey Norman reported an 8.1% drop in Australian revenue while their Kiwi first-half operating profit fell 0.4% to $A20.6 million.

The company attributes this to a lack of spending during the Canterbury earthquakes, along with a weakened electronic goods market.

The 1.7% annual appreciation in the New Zealand dollar had a positive impact on global sales but deteriorations in the Euro and the pound offset those gains.

"Our retail franchisees will continue to innovate, invest and improve their product offering, online channel, staff training and strategic category enhancements," says Chris Mentis, chief financial officer.

"Trading conditions continue to be challenged coupled with deflationary headwinds particularly in the technology categories.

"Home appliances, furniture and bedding remain stable and the businesses are well placed for any upturn in housing starts.

"Unaudited preliminary accounts for the year ended 30 June 2012 indicate profit before tax and minority interests for the consolidated entity of $227.6 million compared to $373.9 million for the year ended 30 June 2011, a reduction of 39.1% ($146.3 million).

"The unaudited preliminary accounts for the year ending 30 June 2012 indicate profit before tax and minority interests of $227.6 million, and included a net property revaluation decrement of ($25.0 million).

"The profit before tax and minority interests of $373.9 million for year ending 30 June 2011 included a net property revaluation increment of $15.4 million.