Harvey Norman – Result 2016

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The bottom line result included property revaluations of $48.4 million. Excluding the property revaluations, net profit rose 20.2 per cent to $314.7 million, compared with consensus forecasts around $325 million.

Main factors impacting net profit before tax:
a $67.79m (+33.8%) increase in the profitability of the franchising operations segment to $268.15m due to a $63.18m (+8.9%) increase in franchise fees & a $12.19m decrease (-15.0%) in tactical support;
a $39.63m increase in the net property revaluation increment, from $8.73m in FY15 to $48.36m in FY16;
a $17.38m turnaround in the profitability of the company-operated stores in Singapore & Malaysia, from a loss of $6.03m in FY15 to a profit of $11.36m in FY16;
a $15.61m increase in profitability of the company-operated stores in New Zealand;
a $6.61m (49.9%) reduction in retail trading losses of the company-operated stores in Ireland and Northern Ireland; and
Offset by:
recognition of impairment losses of $32.56m: $19.12m from the write-down of equity-accounted investments & commercial advances to mining camp accommodation joint ventures, $11.56m from the write-down of other non-trade commercial advances & $1.88m from the impairment of noncurrent assets.
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