Retailer Harvey Norman says its New Zealand company-owned stores increased market share in this country, but at the expense of product margins in the year to the end of June.

The retail segment result in New Zealand was $A44.4 million ($NZ54.8m), compared to $A52.7m for the previous financial year, Australian-based Harvey Norman said today.

Sales revenue from New Zealand company-owned stores rose by $NZ14.5m, or 1.9 percent, compared to the previous year. But when the sales were translated into Australian dollars for reporting purposes, New Zealand sales revenue fell by $A21.3m, or 3.2 percent, to $A646.7m.

That fall was due to a decline of 5 percent in the New Zealand dollar relative to the Australian dollar for translation purposes, the company said.

Sales were helped by the opening of three new stores during the year, and a full year's trading of four stores that started trading during the previous period.

There are 27 Harvey Norman and four Norman Ross stores in this country.

Chairman Gerry Harvey said the New Zealand operation had, and would continue, to outperform the market, despite the recession in this country.

"Increased share in key growth categories combined with the brand strength of the company in that market should ensure future growth," he said.

Overall, Harvey Norman Holdings reported a 40 percent drop in annual profit to $A214.35m. The company attributed the profit fall to property revaluation, trading losses of $A49.33m in Ireland and Northern Ireland, impairment expenses and a reduction in profitability in its retail operations in New Zealand due to the recession.

Profit from underlying business operations for the year ended June 30, 2009, was $A250.4m, compared to $295.1m in 2008, a decrease of 15.2 percent.

Total revenues and other income items from continuing operations was $A2.5 billion, compared to $A2.53b in the previous year, a decrease of 1.3 percent.