August 30, 2019 / 1:07 AM / 5 months ago

UPDATE 1-Australia's Harvey Norman annual profit rises on overseas sales

(Adds segment details, chairman comment)

Aug 30 (Reuters) - Australia’s biggest electronics retailer, Harvey Norman Holdings Ltd, posted an 7.2% rise in annual profit on Friday as rising overseas sales offset weaker domestic demand.

Net profit for the year ended June 30 came in at A$402.3 million ($271.7 million) compared to A$375.4 million a year ago, and above an average analyst estimate of A$385.1 million, according to Refinitiv data.

Annual pre-tax earnings from the company’s Australia franchise stores fell 12.1% as a steep property downturn in Australia hurt consumer confidence.

However, the retailer has found increased profitability in its overseas retail stores with pre-tax earnings for the segment up 11.7% in 2019. A weaker Australian dollar also helped boost offshore earnings.

“We intend to grow our international retail footprint and are on track with our expansion opportunities, particularly in Malaysia,” Chairman Gerry Harvey said.

The company said it expects to open up to 21 new stores overseas within the next two years, including 17 in Singapore and Malaysia.

Rival JB Hi-Fi Ltd earlier this month defied the bleak retail market to post a 7% rise in its annual underlying profit helped by its focus on popular internet-connected gadgets.

Harvey Norman also announced a A$173.5 million capital raise through an issue of new shares at A$2.50 per share.

Shares of the company reversed course to trade 1.7% lower at 0100 GMT after gaining up to 2.1% earlier in the session. ($1 = 1.4806 Australian dollars) (Reporting by Shreya Mariam Job in Bengaluru; Editing by Stephen Coates)

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