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Harvey Norman Holdings Ltd says it’s facing a much tougher retail climate this year, but strong growth from top-selling items such as flat screen televisions is expected to continue.
Australia’s biggest furniture and electronics retailer on Wednesday posted a 19.8 per cent increase in net profit for 2005/06 to $229.6 million.
Total sales, including those from franchised stores, rose 12.7 per cent to $4.6 billion during the year as events like the soccer World Cup and the Melbourne Commonwealth Games helped spark demand for LCD and plasma TVs.
Harvey Norman general manager electrical David Ackery said the retail chain had increased its share of the aggressive and competitive audiovisual (AV) market and that its underlying business was strong and solid.
“We’ve had good strong revenue growth over the year in most categories,” Mr Ackery said.
“Obviously, the World Cup and the Commonwealth Games this year helped drive the AV business to a new level.”
He said flat panel TVs accounted for only 10 per cent of the Australian market but consumers were switching to the new technology at the same rate as had occurred during the move from video tape to DVDs.
“So we’ve got this strong growth in flat panel technology, which will continue to happen over the next short term, medium term and long term,” Mr Ackery said.
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