Harvey Norman set to post its first Irish profits

Harvey Norman's Irish retail operation is likely to record its first profit in the current financial year, according to the head of the business here.

Aidan Brady, Harvey Norman's general manager of finance and operations, said the company was set to record a "small profit" in the year to the end of June.

Accounts just filed for the electrical, computer goods, furniture and bedding retailer, show that Harvey Norman made a loss of €3.3 million in the year to the end of June 2006 in spite of recording a 56 per cent jump in its sales.

Mr Brady said this was due to opening six new outlets and a large outlay on marketing and advertising costs.

"The new stores also made a virtually zero contribution to the results," he added.

Harvey Norman has since opened two more shops - in Naas and Drogheda - and currently operates 10 stores.

Mr Brady said its revenues at the half-year stage at the end of December 2006 were €44.6 million greater than the same period of the previous year.

"Trading has been excellent," he said. "You're comparing three stores [in 2005] to 10 stores last year."

The company now employs 460 staff in the Republic.

Harvey Norman (Holdings) Ireland had accumulated losses of €9.6 million at the end of June 2006. On the plus side, the group had tax losses of €7.9 million available to offset against future taxable profits.

Mr Brady said Harvey Norman plans further expansion in the Irish market. In Dublin, a replacement store is being planned for Rathfarnham while a new outlet will open in Carrickmines.

It is planning to open a computer goods and electrical shop in Castlebar, Co Mayo, before the end of 2007.

He said the company will also open its first stores in Northern Ireland. "We would hope to have two stores in Belfast by the end of this year," he explained. These are likely to be managed from its head office in Blanchardstown, in west Dublin.

Harvey Norman's latest accounts show that sales at the retailer rose to €56.2 million in the year to June 2006, from €35.9 million a year earlier.

The accounts state that the company's gross profit margin increased from 27.5 per cent at the end of June 2005 to 27.9 per cent last year.

Harvey Norman's overheads in Ireland rose by €5 million during the year but accounted for 31.7 per cent of sales compared with 35.7 per cent of turnover in 2005.

It expects its shop leases to cost €5.1 million this year.