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Harvey Norman handles shake-up after shares fall 8.2 percent

  • News
  • March 24, 2017
  • Courtney Devereux
Harvey Norman handles shake-up after shares fall 8.2 percent

The Australian-based homewares and electronic retailer, Harvey Norman, has received a ‘please explain’ letter from the Australian Stock Exchange (ASX) after shares fell 8.2 percent.

Facing the biggest drop in shares in five years the company is complying with market rules after an unexpected loss of hundreds of millions of its market capitalisation.

In response to the ASX notice issued last week, Harvey Norman said them in response it was "not aware of any information concerning it that has not been announced to the market which, if known by some in the market, could explain recent trading in its securities".

The fall comes after two of its directors sold off more than A$2.5 million ($2.74m) of shares in consecutive days.

Chris Wilkinson, First Retail managing director, says that although this can influence the company we shouldn’t expect to see it change things for New Zealand operations.

“The drop seems to centre alleged questions from financial regulators as to how the company reports losses made by franchisees. Anytime these types of events happen, share prices can go into a tail-spin.”

“To compound the issue, share sales from senior executives (which may have just been coincidental) also caused understandable jitters,” Says Wilkinson. “Lastly, research insight that showed vulnerability for Australia's retail giants from Amazon's expected market entry hit the news, which would have further impacted share prices.”

Stock and share prices are known to continuously fluctuate but falls such as 8 percent are not often seen without reason.

Shares have fallen back down to AU$4.30. since the recorded day of 24 March, but have been declining in a steady way like most share prices do. Unlike the sudden drop of 8 percent this is not unusual.

Ric Spooner, chief market analyst at CMC Markets says that shareholder concern stems from Harvey Norman’s accounting treatment of failed franchisees.

“This has created uncertainty over whether Harvey Norman’s losses may be larger than so far revealed. Investor uncertainty on this issue has been heightened by the company’s response to these reports and confusion about whether the issue is being investigated by ASIC.”

Although since the recent drop Gerry Harvey, chairman for Harvey Norman, has acquired two million shares in the company, bringing its share price back up to trading at AU$4.51

It is expected that Amazon’s possibility to enter Australia could affect stock prices of larger retailers as profits become harder to predict, although, Amazon hasn’t officially announced a move in Australia or New Zealand despite speculation.

Spooner agrees with Wilkinson regarding Amazons trading affecting share prices, saying that the concerns lay mostly in the Australian market, especially those in the electronics and small appliance sector.

“However, the accounting issue has been the major driver of the big sell off in Harvey Norman’s share price this week,” Says Spooner. “Other electronics retailers like JB Hi Fi, that is also vulnerable to Amazon, have held up much better than Harvey Norman this week.”

In New Zealand, sales revenue from company-operated stores rose 10 percent to $883.8 million in 2016.  The company has a small stake in listed retailer Briscoe, which it valued at $5.25 million in the 2016 accounts.
 

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Kiwi Property makes $138m net profit for the year

  • News
  • May 21, 2019
  • Radio New Zealand
Kiwi Property makes $138m net profit for the year

Kiwi Property has reported a strong full year underlying profit, as it continues to reinvest in its Auckland retail and office properties.

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Thankyou’s latest campaign combines scent and charity work

  • News
  • May 21, 2019
  • StopPress Team
Thankyou’s latest campaign combines scent and charity work

Australian charity product organisation Thankyou has launched its latest Kiwi campaign, combining that fact that 100 percent of its profit goes towards helping end global poverty with its use of perfume-grade botanical oils in its products.

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From edible insects to beautiful homeware: Made of Tomorrow’s co-founder talks its new venture

  • Design
  • May 21, 2019
  • Idealog
From edible insects to beautiful homeware: Made of Tomorrow’s co-founder talks its new venture

Most people would be in agreement that bugs, planters and room dividers don’t have much in common, but Matt Genefaas and Dan Craig would beg to differ. The two juggle running an edible insect company, Crawlers, as well as a homeware company, Made of Tomorrow. Genefaas has a chat about what the new furniture range, Space Between, was inspired by, as well as how him and Craig spend their days in slashie roles moving between pushing dried insects to the world, as well as polished mirrors and space dividers.

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Why is the next generation so anxious? Here's how young founders can avoid burn-out

  • Opinion
  • May 21, 2019
  • Jennifer Young
Why is the next generation so anxious? Here's how young founders can avoid burn-out

There may be good reason to be concerned about our young entrepreneurs. Millennials and Generation Z have been labelled generation burn-out, generation snowflake and described as narcissistic, entitled, tech-dependent and fragile. They’re also oversaturated with headlines about the raft of issues like climate change they have to tackle, plus concerns about the impact of technology and social media on their mental health. Jennifer Young explores possible reasons why the younger generation is so anxious, as well as what young founders can do to avoid burn-out.

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Vodafone NZ sold to private investors for $3.4b

  • News
  • May 21, 2019
  • Radio New Zealand
Vodafone NZ sold to private investors for $3.4b

Infrastructure investor Infratil is teaming up with a Canadian investment firm to buy the local operations of Vodafone for $3.4 billion.

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Readings present revised plan for Courtenay Central

  • Property
  • May 16, 2019
  • Radio New Zealand
Readings present revised plan for Courtenay Central

The company that owns Courtenay Central in Wellington says it has big plans for redeveloping the complex - which is closed due to earthquake risks.

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