Michael Hill annual sales rise at fastest pace in 3 years

Mike Parsell, Michael Hill International Chief Executive
Michael Hill International 12-month price history (NZX.com)

Michael Hill International [NZX: MHI], the jewellery chain that bears the name of its founder, increased sales 9.7 percent last year, the fastest pace in three years.

Sales rose to A$482.8 million in the 12 months ended June 30, from A$440 million a year earlier, the Brisbane-based retailer said in a statement. Same-store sales rose 5 percent to A$433.9 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. Michael Hill didn't provide any indication of profitability in its latest statement, and said it expects to release its 2014 earnings on Aug. 15.

In the past year, Australian sales rose 4.4 percent to A$302.1 million, while Canadian sales rose 37 percent to A$70.4 million, US sales rose 8.7 percent to A$10.9 million and sales in New Zealand gained 12 percent to A$99.5 million. However some of the gains reflected an appreciation in local currencies against the Aussie dollar, with New Zealand sales declining 1.5 percent in local currency terms, US sales declining 2.8 percent and Canadian sales appreciating at a 30 percent rate.

Sales from the retailer's professional care plan business rose about 20 percent to A$31.7 million and the company brought A$20 million of the plan revenue to income, up 51 percent from the year earlier.

The shares advanced 0.8 percent to $1.24 on the NZX and have slipped 12 percent in the past year. The stock is rated a 'buy' based on the consensus of three analysts polled by Reuters, with a target price of $1.64.


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