28 Feb 2009

Harvey Norman reports 56% half-year profit fall

12:11 pm on 28 February 2009

Electronics and furniture retailer Harvey Norman Holdings Ltd has delivered a rare profit fall and warns trading conditions remain challenging, after consumer spending slumped in the back half of last year.

The company operates franchised and company-owned stores throughout Australia and New Zealand.

Chairman Gerry Harvey is hopeful that the federal government's recently announced second, $A42 billion fiscal stimulus package will give shoppers more confidence and help the company return to growth over the next year.

Harvey Norman reported a 56.8% fall in first-half net profit on Friday. Net profit for six months to December was $A99.33 million, down from $A230.15 million in the previous corresponding period.

Its underlying business operations profit was $A123.52 million, down 29.1%.

Mr Harvey told AAP that he was "not really" happy with the result.

"I've been in business for 50 years and if you said to me how many times in those 50 years has your profit gone backwards I'd say this would be the third or fourth time - so that's not good," Mr Harvey said.

"I would like to think next year that we start reversing it and it starts going up again, but it depends on what happens with this global financial crisis."

The company will pay an interim dividend of five cents, down from seven cents in the previous first half.

Harvey Norman has 271 retail complexes in Australia, New Zealand, Asia and Europe trading under the Harvey Norman, Domayne, Joyce Mayne and Norman Ross brands.