Harvey Norman Irish stores in profit after years of losses

Harvey Norman had losses of €5.7m in 2015, €6.9m in 2014, and €5.18m in 2013.

Revenues increased by 13%, from €158m to €178m, in the latest year.

However, following interest charges of €1.4m, the business still had a pre-tax loss of €1.2m.

Accumulated losses at the company at the end of its financial year in June stood at €120.15m.

According to the directors’ report, “The growth in sales and market share in 2016 has not come through discounting or at the expense of margins.”

They state that “gross profit is up year on year and we have continued to focus on internal factors to drive our growth”.

“We have focused on improving our product ranges, optimising our inventory and logistics processes, focusing on store and operational efficiencies, and refinement of our marketing and brand positioning,” said the directors.

Harvey Norman said it is committed to its chain of Irish stores.

Last year, the group acquired a site for a new store at Tallaght on the outskirts of Dublin.

Construction has been advanced for the 60,000 sq ft of retail space at the Airton Road Retail Park and is due to open later this summer.

This will the firm’s fifth store in Dublin. It has two stores in Belfast and Cork.

The directors state that the performance of the company’s new Boucher Rd store in Belfast, which opened in 2015, had “exceeded” its expectations.

They also said that, following a major refurbishment, its other furniture and bedding store in the North, at Holywood, it had upgraded its brand in the North.

It said that stores in the Republic had returned to profitability in 2016, and it expected the restructuring of the business in the North would cut losses.

“The directors are confident that the group will return to overall profitability in the near term,” said the company.

The group said its continuing store investment plans is delivering “a modern, fresh, and truly experiential shopping experience”.

The firm’s gross profit last year increased by 16.3% to €8.5m, while the gross profit margin rose from 32.5% to 33.7%. “This is a 1.2% increase year on year, in line with changes to the sales mix,” it said.

Last year’s pre-tax loss last took account of non-depreciation costs of €2.1m.

Lease costs came to €13.5m in the year. Staff numbers at Harvey Norman last year increased, rising from 757 people to 860, including 649 staff working in sales and 211 in administration. Total pay to directors came to €332,719. Shareholder funds totalled €102.5m at the end of last June.

The retailer said it is focused on returning to profitability by growing sales in its stores and online.