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Flat nine months for Michael Hill on sluggish Aussie market

BUSINESSDESK: Michael Hill International Ltd, the listed jewellery chain, posted flat same-store sales as New Zealand, Canada and the US markets made up for shrinking sales in Australia, its largest market.

Total sales rose 5.1% to $391 million for the nine months ended March 31.

Same store sales - the best measure of how the firm is tracking - increased 10.2% to $8.8m in the US, followed by New Zealand, up 8.9% to $81.8m.

Sales in Canada gained 0.8% to about $34m, while same store sales in Australia decreased 2.7% to $239m.

“Third-quarter sales were satisfactory in New Zealand, Canada and the US,” chairman Michael Hill said.

“The sluggishness in the Australian market has resulted in our group 'same-store' sales being flat for the nine months.

"However, the directors are pleased with the solid growth achieved in the three other markets.”

The company’s professional care plan, offering maintenance and repairs on jewellery, recorded a 208% rise in sales to about $20m for the nine months.

This follows record first-half sales of $14.4m in February.

“Cashflow continues to grow for the group due primarily to the ongoing success of the Professional Care Plan product launched in October 2010,” Mr Hill said.

In February, the retailer’s first half profit rose to $26.3m for the six months ended December 31, up from $25.6m in the same period a year earlier. Sales rose 7.3% to $289m.

Shares in the company have gained 19.5% this year, trading at $1.02.