Harvey Norman remains ‘committed’ to Ireland

THE Irish unit of Harvey Norman has said it is committed to Ireland for the long-term in spite of recording pre-tax losses of €31.3 million last year.

The losses sustained by the Australian-owned Harvey Norman Holdings (Ireland) Ltd follow the group recording pre-tax losses of €40 million in Ireland in 2009.

The company sells homeware, furniture, computers, consumer electronics and communications products and in their report, the directors state that the company employs 787 people “and is committed to Ireland for the long term”.

The figures show that the company reduced its losses after increasing revenues by 3% from €136.3m to €140.2m in the 12 months to the end of June 2010.

The accounts show that the loss last year includes an impairment charge of €5.8m and this followed an impairment charge of €15.7m in 2009.

According to the directors’ report, the loss for the year “was due to the continuing difficult trading environment caused by tough economic conditions, the ongoing crisis in the banking sector and the continued lack of consumer confidence”.

The directors state: “As a result, there was a significant reduction in consumer spending during the year and with budgetary measures being put in place by the government, this is likely to continue.”

The directors explain that the €5.8m impairment was recorded in the accounts to reduce the carrying value of plant and equipment.

The directors state that “retail rents across the sector are distorted and do not reflect market reality and welcome the Government’s renewed commitment to abolishing upward-only rent reviews for existing leases”.

They state: “Strong roots have been established in the Irish market. The Harvey Norman brand continues to strengthen in Ireland and is respected by both supplies and customers.”

The figures show that the company has accumulated loss of €78.4m last June.

The figures show that the staff costs last year amounted to €21m — an increase of €2m on the 2009 staff costs of €19m.

The figures show that the losses followed a depreciation charge of €3.2m, while remuneration to directors last year increased from €324,237 to €559,250.

The figures show that the company’s cost of sales increased during the year from €100.3m to €107.8m while administrative expenses decreased from €57.8m to €56.3m.

The decrease by €1.6m in administration expenses during the year was, according to the directors, due to a combination of cost-reduction programmes implemented across the group and to one-off costs incurred in the previous year on opening new stores and start-up costs of the company’s operations in the North.