Business Description:
Harvey Norman Holdings Limited (HVN) engages in franchising operation, integrated retail business, and property development. Harvey Norman operates predominantly under a franchise system in Australia and operates wholly-owned or controlled stores in overseas markets. The property operation is a complement to the retail and franchising business and has a purpose of facilitating the expansion and operation of the franchising operations and resale.

Strategy Analysis:
HVN's strategy aims to leverage its scale to buy in bulk and derive higher margins. Scale also enables HVN to offer unique promotional activities for its customers. The stronger A$ and GST exemptions on imports is encouraging more consumers to shop on the internet. HVN is developing a centralised online website to act as a referral system and re-direct online sales to local stores to deliver product. International expansion remains the wild card which could deliver significant returns or absorb large amounts of management time and capital. So far the evidence suggests the latter is emerging with no near term sign that Ireland will move to profits. Harvey Norman Holdings reported NPAT up 9% to $252.26m for the year ended 30 June 2011. This result has been achieved by focusing on the Company's core competencies and by the prudent allocation of resources to those activities and assets that are capable of generating long term sustainable growth. Revenues from ordinary activities were $1.56bn up from $1.34bn last year. Diluted EPS was 23.75 cents compared to 21.78 cents last year. Net operating cash flow was $357.39m compared to $383.87m last year. The final dividend declared was 6 cents, taking the full year dividend to 12 cents compared with 14 cents last year. In the midst of challenging macroeconomic conditions, the outlook for the integrated retail, franchise and property system of the company remains positive. There is a clear strategy that is supported by a strong asset base.