Australian sales fall but profit up for retailer Harvey Norman
* Sales fall, margins tighten as consumer spending slows
* Company posts profit rise on overseas performance,
* Shares briefly hit six-month high
(Adds segment detail and analyst quote)
SYDNEY, Feb 28 (Reuters) - Australia's biggest electronics
retailer Harvey Norman Holdings Ltd posted a rise in
half-year profit on Thursday, as a fall in domestic sales was
offset by increases offshore and property value gains.
Australia's retailers had their worst quarter in a year in
the three months to December as a downturn in property prices
left consumers saving more and spending less at shops, hurting
stores from furniture-sellers to grocers.
Harvey Norman, said sales at its Australian franchise stores
fell 1.7 percent over the six months to Dec. 31 and were weaker
still in the early part of the current half, suggesting there is
more pain to come for customer-facing businesses.
Spending indicators are being closely watched by the
country's central bank, which is on the lookout for any signs of
a broader economic slowdown triggered by the property rout and
has signalled it is open to cutting interest rates.
Still, half-year profit at Harvey Norman rose 7.3 percent to
A$222.8 million ($159 million), helped higher by sharply rising
contributions from stores in Singapore, Malaysia and Ireland,
and a A$25.61 million boost from property revaluations.
"The headline result was up, but net of all the property
gains ... it was actually flat and the trend is getting worse in
Australia," said Alan Kwan, senior portfolio manager at fund
manager Alleron Investment Management.
Shares in the company rose as much as 3.4 percent to a
six-month high in early trade, before falling to trade flat. The
broader market fell 0.2 percent.
The company also reported margins tightening as it
discounted to boost sales. It declared a A$0.12 per share
interim dividend, the same as last year.
The result contrasts with the company's biggest rival, JB
Hi-Fi Ltd which defied the downturn to lift sales,
beating market expectations.
($1 = 1.3992 Australian dollars)
(Reporting by Tom Westbrook; Editing by Stephen Coates and
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