Harvey Norman has posted a 36.5 per cent slump in profit, but its shares have risen as investors feared something worse.
The retailer's half-year profit to December 31 dropped 36.5 per cent to $81.9 million, after Harvey Norman devalued its extensive retail property holdings by $31.5 million, after having increased their value by around $8.1 million in the previous period.
If property revaluations were excluded, the furniture and electronics retailer would have posted a 6.2 per cent profit slide to $113.4 million.
However, Harvey Norman says it has started the new year well, with Australian sales up 4.1 per cent and global sales up 3.8 per cent.
The company's chairman and co-founder Gerry Harvey says retail conditions remain tough, but he is optimistic about an improvement over 2013.
"The aggressive discounting experienced in the second half of 2012 has stabilized and pleasingly we are seeing an uptick in sales," he noted in the report.
"Interest rates are at historical lows which should start moving the consumer back into the buying cycle from the savings cycle.
Harvey Norman will be a beneficiary of this, given the diverse homemaker categories Harvey Norman franchisees operate in." Investors took heart from that positive outlook, pushing the company's shares up 4.8 per cent to $2.39 by 12:57pm (AEDT).