Harvey Norman Embarrassed By Missing Millions

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Hours after arch competitor, JB Hi Fi reported record profits and sales Harvey Norman has revealed an embarrassing $41.75 Million dollar mistake in their original profit forecasts, which now raises questions about the overall performance of the group.

In a note buried deep in a revised version of their final 2008/2009 financial report filed with the Australian Securities Exchange, Harvey Norman said it had been forced to make some changes on at least 14 pages of its accounts.

One mistake was what the Company called a “calculation error” that had boosted the profits of parent entity Harvey Norman Holdings Ltd by $41.74 million.

In their new filing Harvey Norman said that total revenues and other income items from continuing operations was $2.50 billion for FY2009 compared to $2.53 billion for FY2008, a decrease of $32.55 million or 1.3%.


Net profit from continuing operations attributable to members after tax was $214.35 million for FY2009 compared to $358.45 million for FY2008, a decrease of $144.10 million or 40.2%.

Net profit after tax and minority interests of the “underlying business operations” was $250.42 million for FY2009 compared to $295.14 million for FY2008, a decrease of $44.72 million or 15.2%.


In sharp contrast JB Hi Fi reported a 45% jump in profits and a 27% lift in sales. 

Speaking at the company’s annual meeting in Melbourne yesterday, chief executive Richard Uechtritz said the rate of sales growth for existing JB stores had increased over the past six weeks from 3.8 per cent in mid-August to average 8.4 per cent for the whole of the first quarter.

“While the economic outlook remains unclear, we are encouraged by recent signs the Australian economy and consumers are feeling more confident than this time last year,” he said.

Mr Uechtritz said the company was confident of meeting forecasts for sales to grow by 20 per cent this financial year to $2.8billion.

The company has also accelerated its expansion plans, with 22 new JB stores now scheduled to open this financial year, up from previous guidance for 18 new sites.

Harvey Norman Director David Ackery, who is also General Manager of Electrical at the Company was not available to comment on the changes. 

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