Michael Hill shares jump on rising Q1 revenue
(BusinessDesk) Michael Hill International, the listed jewellery chain, lifted first-quarter revenue rose 14% in New Zealand dollar terms, boosted by an improvement in its North American and Australian markets.
Michael Hill shares (NZX: MHI) jumped almost 8% by mid-afternoon to $1.22, reversing yesterday's 1.7% drop. The stock started the year at 87 cents.
The Brisbane-based company says total sales climbed to $116.4 million in the three months ended September 30, from $101.8 million a year earlier. Same-store sales rose 8.5% to $108 million.
Total Canadian sales jumped 29% to $12.3 million, followed by Australia, up 14% to $78.9 million.
"All markets traded well over the first quarter and it was pleasing to see our largest market Australia lift its performance after a slow down during 2011-12," chairman Sir Michael Hill says.
"The sales growth shown during the quarter was achieved without the need to reduce margins."
In August, the company posted a 5.8% increase in annual profit to $36.5 million as recovering sales in New Zealand, Canada and the US made up for shrinking revenue in Australia, which is the current financial year's focus.
US sales rose 10.6% to $2.5 million in the latest period, while New Zealand sales increased 8% to $22.7 million.
Sales for the company's professional care plan, which offers maintenance and repairs on jewellery, rose 20% to $6.5 million.
"The directors are satisfied with the performance over the first quarter however the key December quarter is now upon us and this will to a large extent determine the group's result for the year," Sir Michael says.
The stock is rated an average "outperform" based on the consensus of two analyst recommendations compiled by Reuters.