The retailer made A$1.03b in revenue from New Zealand in the latest year. Photo / Getty Images
The retailer made A$1.03b in revenue from New Zealand in the latest year. Photo / Getty Images
Australasian retailer Harvey Norman made A$1.03 billion revenue from its New Zealand operations in the last year, down on the A$1.14b previously but it still plans a new store.
The company’s annual accounts for the year to June 30, 2023, were last month posted on the New Zealand Companies Office.
Those showed revenue and profit down.
New Zealand profit was $88.18 million, down $49.49m, or 36 per cent from $137.67m in the year to June 30, 2022, the company said.
“Macroeconomic headwinds and inflationary pressures have persisted for over 18 months and the economy is navigating a deliberate, policy-induced deceleration following strong post-pandemic recovery,” the retailer said of its operations here.
“Throughout FY23, the decline in business and consumer confidence intensified as household budgets were squeezed further due to mounting costs of living, mortgagees rolling onto higher interest rates and a tight rental market, adversely affecting discretionary spending across most business sectors,” the annual report’s commentary said.
The rapid fall in property prices has continued to reduce household equity, resulting in consumers being more cautious about investing in their homes.
On the upside, the New Zealand labour market remains strong, with low unemployment and stable wage growth, and household savings are still at high levels.
All key categories were affected, from the decline in consumer discretionary spend and reduced store foot traffic.
Full year results from Harvey Norman's activities in New Zealand. Image / Harvey Norman annual report
In local currency, sales for the 45 New Zealand company-operated stores and outlets were $1.10b for FY23, a decrease of $95.24m or 8 per cent from $1.19b in FY22.
Sales in the first half of the June 30, 2023 financial year sales declined A$57.57m or 9.8 per cent relative to 1H22.
But the previous period benefitted from elevated sales during the lockdowns as consumers worked and studied from home, and the surge post-lockdown due to pent-up demand, the retailer said.
The retailer said its New Zealand balance sheet was strong, supported by a substantial property portfolio valued at A$427.80m.
“With sufficient cash reserves and no debt, our New Zealand operations are strategically poised to capitalise on potential opportunities and leverage any improvements in the trading landscape in New Zealand,” Harvey Norman said.
The report also noted the sale of a joint venture retail operation at Westgate, Auckland.
“In May 2023, a joint venture was established for the purchase of the Westgate Lifestyle Centre for NZ$43m and we opened our 45th store in Masterton on 20th June 2023.
“We intend to open one new company-operated store in New Zealand in FY24,” Harvey Norman said.
Note: A Herald article published yesterday reported on Harvey Norman accounts which were not reflective of the retailer’s full New Zealand operations. The error is regretted.
