Harvey Norman Holdings Limited (HVN) posted an underlying profit from operations of $295.14 million for FY 2008, up 13.4%. The company said it increased market share across its core divisions.
Net profit from continuing and discontinued operations after tax was $358.5 million, a decrease of 12%. The retailer said the previous result was boosted by the divestment of Rebel Sports for $83.15 million, not including this significant item overall profit increased 10.2%.
A survey of eight investment banks saw a pre-items net profit of $311.6 million.
Chairman Gerry Harvey said current economic turbulence and changes reinforced the importance of continued investment in its brands, experience of its management and sound fiscal management.
He said the retailer was in an extremely strong position and had the ability to take advantage of further opportunities using its low gearing levels.
"Our current debt to equity ratio of 26.6% has placed us in an excellent position to continue to grow our core businesses and invest in value based opportunities, should they arise."
"Our integrated retail, franchise and property system has proven to be robust and resilient, despite the current economic volatility," the company said.
Mr Harvey said within the 2009 financial year a minimum of 15 new complexes for our brands, would open.
"The investment in and development of retail complexes is an essential component of our business strategy with current developments in the Queensland, Victoria, South Australia, Western Australia and New Zealand," he said.
Mr Harvey said the retailer's objective was sustainable long term growth across the Harvey Norman Domayne, Joyce Mayne, Norman Ross and OFIS brands and property portfolio.
Mr Havey said the company was still around because it does the basics right and gives the customer a good shopping experience.
"We've increased our market share in the key areas, flat panel TV, technology products, bedding and remain strong in the rest," he said.
Franchisee sales revenue was $4.86 billion, an increase of 8% and the franchising operations margin was 6%, a gain of 11.3%.
"Effective management of the franchising system in Australia has delivered solid growth in the franchising segment evidenced by an increase in the franchising operations segment result and higher franchising operations margins," Mr Harvey said.
"While sales growth softened in the second half of the financial year following the slowdown in the Australian economy, Harvey Norman franchisees continued to maintain or grow market share."
During the year the company opened a total of seven new franchised complexes in Australia, while it closed five small franchised stores in regional locations.
The total number of franchised complexes in Australia as at 30 June 2008 was 194 compared with 192 franchised complexes at the end of June 2007.
Eight new Harvey Norman company-owned stores were opened in offshore markets, including two stores in New Zealand, three stores in Ireland and three stores in Malaysia.
Consolidated sales revenue for the year was $1.43 billion an increase of 7.5%.
The recommended final dividend is 7c per share fully franked, up 16%
At 1308 AEST shares in Harvey Norman are down 4c to $3.61.