Harvey Norman Intangible Assets Essay Example

align="justify">By analysing and looking into these intangible resources, shareholders are in the hope to look for signals beyond the financial annual report and are to be given true indicators on the company and its staffs production capability, stability, know-how capital and profit potential, on which their decision to sell or keep their shares are based on. Business description and main activities Harvey Norman Holdings Limited is a franchisor and an Australian public company, which has expanded internationally, including New Zealand, Ireland, Singapore, Malaysia and Slovenia (Annual Reports 2009).

According to 2009 Insider Retailing article, the company is now ranked third on the Australia's top 10 retailers and is the leading non-food retail chain in Australia. Within its franchising system, the company offers extensive products range, cutting edge technology, and market leadership in most product categories. Harvey Norman Holdings Limited grants franchises to ndependent business operators under three leading brand names, i. e. Harvey Norman, Domayne and Joyce Mayne.

As at December 2009, there are 635 Harvey Norman, Domayne and Joyce Mayne franchisees in Australia (Company Profile 2009) As stated in the company profile, the principal activities of the company are embedded in its integrated retail, franchise and property system. The company's retailing system include sale of furniture, bedding, computers, communications and consumer electrical products online as well as in-store. Within its franchising system, the company provides retailing strategy and marketing techniques in turn for eceiving the franchisees fees that are based on sales.

Harvey Norman is said to be 'part retailer, part property-trust' as the company property holdings account for nearly 50 percent of its total assets (Money manager, 2008). These assets also produce main

source of income for the company including regular rental income from the franchisees, and also acting as an investment income where it can successfully develop properties from vacant land to retail complexes. The major benefits of this integrated model enable Harvey Norman to lower the cost of debt financing by securitizing a portion of income-producing property portfolio. This ould free up capital and helps to boost returns.

In terms of the history development of Harvey Norman, appendix 1 illustrates the important evolvements It . nas been one ot the dominant leaders ot Australian re industry since 1970s.

Based on the business performance of last few decades, Harvey Norman has shown a rapid growth compare to its competitors. Harvey Norman Resources Tangible Resources According to the company's profile, Harvey Norman Holdings Ltd is one of leading retail chains in Australia, which has franchisors, company-owned stores and properties across the world (Australia, New Zealand, Slovenia, Ireland, Singapore,

Malaysia). The franchisees retail products are Electrical, Computers & Communications, Small Appliance, Furniture, Bedding & Manchester, Home Improvements, Lighting and Carpet & Flooring. The company generates its profit both from continuing and discontinued operations, and its main continuing operation comes from the franchises sales in Australia, New Zealand, Slovenia, Ireland, Singapore and Malaysia. The profit also comes from the revaluation increments of properties owned by company in Australia and overseas.

According to the 2009 Annual Report, the Harvey Norman's net profit for year omprised of profit from continuing operation and discontinued operation.

In 2007, the net profit for year was $407. 25 million, and $324. 10 million of it comes from continuing operation, the other $83. 15 million was from discontinued operation.

However,

the net profit for financial year 2009 significantly dropped to $214. 35 million compared with $358. 45 million in year 2008. One reason of this decline is the absence of profit from discontinued operation.

In 2007, company got discontinued profit $83. 15 million after tax on sale of its controlling interest in Robel Sport Limited, owever, there was no profit gain from discontinued operations in 2008 and 2009. The other reasons of decline in profit in 2009 are property revaluation increments and retail operation from New Zealand decreased, expansion in Northern Ireland, and start-up investment cost and trading losses in OF'S in Australia. Profit from property The property owned by company also contributes to profit.