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Michael Hill 9-month sales rose 10.5%, led by Canadian, Australian growth

Michael Hill International [NZX: MHI], the jewellery chain that bears the name of its founder, reported a 10.5 percent gain in sales for the first nine months of the year, led by growth in Canada and Australia.

Sales rose to A$372 million in the nine months ended March 31, from A$336.8 million a year earlier, the Brisbane-based retailer said in a statement. Same-store sales rose 5.4 percent to A$338.6 million.

The company relocated to Australia in 2008, transferring its intellectual property to an Australian subsidiary in a transaction that put its head office in its largest market and generated tax breaks. Early this month Michael Hill announced an A$6 million settlement with the Australian Tax Office, which had disputed the valuation of IP.

Same-store sales in Australia rose 1.4 percent to A$214 million in the first nine months, while Canadian sales rose about 17 percent to A$41 million and US sales rose 17 percent to A$7.8 million.

Same-store sales in New Zealand gained 10 percent to A$75.2 million, although this largely reflected a strengthening kiwi dollar against the Australian dollar. In local currency terms, New Zealand sales fell 2.9 percent to $83 million.

Sales from the retailer's professional care plan business rose about 23 percent to A$24.5 million and the company brought A$13 million of PCP revenue to income, up 99 percent from the same period a year earlier.

The shares last traded at $1.33 on the NZX and have slipped 0.8 percent in the past 12 months. The stock is rated a 'buy' based on the consensus of three analysts polled by Reuters.

(BusinessDesk)