annual report - Harvey Norman Company Reports & Announcements

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CHAIRMAN‟S REPORT (CONTINUED) Ireland reported a loss of €22.30 million for the year ended 30 June 2012 compared to a loss of €24.54 million in the previous year, a reduced loss of 9.1% in local currency. The Irish loss in Australian dollars improved on the previous year by 14.6%. Northern Ireland reported a loss of £3.32 million for the year ended 30 June 2012 compared to a loss of £2.93 million in the previous year, a deterioration of 13.3% in local currency. In Australian dollars, there was an 8.0% deterioration in the Northern Ireland segment result. In early July 2012, the Company announced the restructure of the Irish and Northern Irish businesses with the aim of reducing future losses and increasing growth. The main features of the restructure include: The launch of a large new furniture and bedding store in West Dublin; The launch of Harvey Norman Online, a new e-commerce initiative in Ireland and Northern Ireland; The closure of the store located at Mullingar, Ireland which has underperformed; The reformatting of the Dundalk Outlet store in Ireland to focus on the furniture and bedding categories; The reformatting of the two stores in Northern Ireland located at Newtownabbey and Holywood to focus on the furniture and bedding categories. We have not recognised the costs of the above restructure in the financial statements and notes disclosed in this report as the announcement to affected parties in Ireland and Northern Ireland and the general public was made subsequent to 30 June 2012. The Board remains committed to the operations in Ireland and Northern Ireland for the long-term. Asia Sales revenue from controlled entity Pertama Holdings Limited, Singapore and trading as “Harvey Norman”, increased by $S5.41million (increase of 1.2%). Upon translation into Australian dollars, sales actually decreased by $1.69 million (decrease of 0.5%). There was a devaluation of 1.7% in the Singapore dollar relative to the Australian dollar. The Harvey Norman branded stores in Singapore and Malaysia continue to grow market share. The segment result in Asia was $9.44 million in the year ended 30 June 2012 compared to $13.05 million in the previous year, a decrease of 27.7%. The decrease in local currency was 26.4%. The profitability of the Asian segment reduced on prior year due to price deflation, particularly in the AV/IT categories, disruption of trade to the Millenia Walk flagship store in Singapore attributed to resumption of floorspace by the landlord and the operation of two warehouses in lieu of purchasing a large warehouse to service all stores in Singapore. We are pleased with the performance of the Harvey Norman branded stores in Singapore and Malaysia, and the plan is to increase the Harvey Norman brand in the Malaysian market. The investment in the 100% company-owned Space brand in Singapore and its relocation to the recently redeveloped world-class showroom in Bencoolen Street, Singapore will position it to take advantage of growth in demand for premium furniture within this key global market. 11
CHAIRMAN‟S REPORT (CONTINUED) Slovenia and Croatia Sales revenue from the company-operated stores in Slovenia and Croatia increased by €16.90 million (increase of 35.1%) relative to the previous year. This increase is mainly attributable to the sales revenue recorded by the two new stores at Maribor in Slovenia and Zagreb in Croatia that commenced trading in October 2011 and a full year‟s trading of the Novo Mesto store that opened in October 2010. Upon translation into Australian dollars, the increase in sales was $17.74 million (increase of 26.7%). The retail segment result in Slovenia and Croatia was $2.43 million for the year ended 30 June 2012 compared to $5.37 million for the previous year, a decrease of 54.8%. Slovenia reported a profit of €3.21 million for the year ended 30 June 2012 compared to a profit of €3.89 million in the previous year, a reduction in local currency of 17.6%. Croatia reported a loss of €1.34 million or a loss of $1.73 million in Australian dollars primarily due to the start-up investment costs of opening the Zagreb store. Despite the challenging economic conditions in Europe, the retail business in Slovenia continues to be robust and growing market share. With the opening of the store in Maribor, Slovenia‟s second largest city and located in the country‟s north east region, the existing 5 stores cover a wide geographic area of Slovenia. Other Non-Franchised Retail The non-franchised retail segment consists of the retail trading operations in Australia which are controlled by the consolidated entity and does not include any operations of Harvey Norman franchisees. Sales revenue for the other non-franchised retail segment was $106.26 million for the year ended 30 June 2012 compared to $112.58 million for the previous year, a decrease of 5.6%. The segment result for the non-franchised retail segment was a profit of $7.53 million for the current year compared to a profit of $7.87 million in the prior year, a decrease of $0.34 million or 4.4%. Outlook and Other Equity Consolidated equity as at 30 June 2012 was $2.27 billion compared to $2.23 billion at 30 June 2011 – an increase of $38.42 million or 1.7%. Included within consolidated equity is an amount of $30.93 million (June 2011: $34.88 million) attributable to non-controlling interests, of which $28.21 million relates to non-controlling interests in Pertama Holdings Limited, Singapore. Consolidated equity was diluted by $14.74 million as a result of the payment of consideration for the on-market acquisition of a further 12,592,150 shares in Pertama Holdings Limited, Singapore and the acquisition of a further 24.9% shareholding in a retail controlled entity in Australia which was in excess of the carrying value of the non-controlling interest. Dividend The recommended final dividend is 4.0 cents per share fully franked (June 2011: 6.0 cents per share fully franked). This final dividend will be paid on 3 December 2012 to shareholders registered at 5:00 pm on 2 November 2012. No provision has been made in the Statement of Financial Position for this recommended final dividend. 12
Page 1 and 2: 2012 ANNUAL REPORT HOLDINGS LIMITED
Page 3 and 4: 2 Contents Company Information 1 Co
Page 5 and 6: CHAIRMAN‟S REPORT Business Perfor
Page 7 and 8: CHAIRMAN‟S REPORT (CONTINUED) Our
Page 9 and 10: CHAIRMAN‟S REPORT (CONTINUED) Bre
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Page 15 and 16: DIRECTOR‟S REPORT Your directors
Page 17 and 18: DIRECTOR‟S REPORT (CONTINUED) Com
Page 19 and 20: DIRECTOR‟S REPORT (CONTINUED) Div
Page 21 and 22: DIRECTOR‟S REPORT (CONTINUED) Rem
Page 29 and 30: DIRECTORS‟ REPORT (CONTINUED) Rem
Page 31 and 32: DIRECTORS‟ REPORT (CONTINUED) Rem
Page 33 and 34: DIRECTORS‟ REPORT (CONTINUED) Aud
Page 35 and 36: CORPORATE GOVERNANCE STATEMENT (CON
Page 43 and 44: STATEMENT OF FINANCIAL POSITION AS
Page 45 and 46: STATEMENT OF COMPREHENSIVE INCOME F
Page 47 and 48: STATEMENT OF CHANGES IN EQUITY FOR
Page 49 and 50: STATEMENT OF CASH FLOWS FOR THE YEA
Page 51 and 52: OPERATING SEGMENTS (CONTINUED) Oper
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STATEMENT OF SIGNIFICANT ACCOUNTING
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Reference Title Summary Application
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NOTES TO THE FINANCIAL STATEMENTS (
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Independent auditor’s report to t
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SHAREHOLDER INFORMATION Distributio
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DIRECTORY OF HARVEY NORMAN, DOMAYNE
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