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| Weekly Commentary Archive | | For archival copies of the Weekly Commentary click here... | | | | 15th May 2010 | Retail giant Harvey Norman (Au: HVN)
reported sales from its complexes, commercial
divisions and other sales outlets in Australia, NZ, Slovenia and Ireland were up 2.2 percent at A$4.6 billion in the nine months to March 31. Like-for-like sales for the nine months ended March 31, compared to the same
period last year, increased by just 1.4 percent, which was about half market expectations. HVN noted that the sales data had been negatively affected by the strength of the Aussie dollar. Australian retailers are facing tough times, in a comparative sense, because the government’s fiscal packages introduced last year are now no longer part of the equation. In addition, interest rates are likely to keep rising on both sides of the Tasman, dampening consumer
demand. HVN has powerful brands and advertising and is an excellent retailing stock. It maintains a strong balance sheet and has good cash flows. The
current flat sales patch should prove temporary.
Tourism Holdings (THL) is the largest provider of holiday rental vehicles in Australia and New Zealand under the Maui, Britz, Backpacker and Explore More Brands. Most of its rental vehicles are provided by THL’s manufacturing company, Ci Munro, which is based in Hamilton. THL’s net trading loss from its continuing businesses was $1.4 million over 2008-9, reflecting the dire trading conditions prevalent within the industry at the time, plus restructuring costs. The company’s fortunes started to turn later in 2009 and for the six months to 31 December 2009 it reported a net profit of $1.4 million compared with a loss of $0.3 million in the previous corresponding period. The 2009-10 year net profit is forecast by the company to be $3- $4.5 million. The strong New Zealand dollar will make life difficult for THL, but the company can be expected to benefit from the 2011 Rugby World Cup.
(Disclosure Statement: A disclosure statement can be obtained free of charge by calling IRG 0800 474669, or by email info@irg.co.nz.) | |
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