Shine returns to sales at Michael Hill International

Profits at Michael Hill International rose 32.6% as the shine has started to return to jewellery sales.

The company has revealed a net profit of $34.5 million for the year to June 30, on revenue of $489.3 million – up 10% on last year.

Company founder and chairman Sir Michael Hill said the top line recovery in its jewellery sales followed difficult years of trading since the global financial crisis in 2008.

But retailing was still difficult across the four countries it operates in, requiring more money to be spent on marketing, consumer payment plans and stock levels to boost sales across its 240 international jewellery stores.

New Zealand and Australia remain the strongest markets for the jeweller, reflecting strength of the brand and maturity of the sales teams and business strategies.

New Zealand sales rose 6.2% to $101.7 million for year, lifting net profits 16% $18.6 million.

Eleven new stores opened during the year – six of which were in Australia where revenue rose 6.2 % to $A251 million.

In Canada, despite a 22.7% to $CA36.82 million rise in revenue, the company still made a loss of $CA174 thousand - but this was better than the loss of $CA1.2 million last year.

"The company is still confident of success in the Canadian market and intends to push on with steady growth in the years to come," Sir Michael said in a statement.

There is still a long way to go before the jewellery brand proves itself in the US where the company lost $US3.4 million (compared to $US6.3 million last year) on revenue of $US8.1 million for the year.

A decision to downsize the US operation from 17 to nine stores last year had been vindicated - as sales had grown 20% on a same-store basis.

"However, further improvement is necessary in this new market before the company can be confident the business has reached a level of performance that would justify further store growth."

Michael Hill International will pay a 3c dividend will be paid on October 10 – bringing the full-year dividend to 4.5c.

Imputation credits do not apply to New Zealand shareholders and the company said this was unlikely to be reinstituted in the foreseeable future due to internal restructuring.

Shares in Michael Hill were flat at 88c this morning.

This year the Hill family succeeded in its bid to wrest back control of the company through investment vehicle Durante Holdings, lifting its stake to 50.2% in March after buying 10.03 million shares at 90c.

Sir Michael Hill was valued at $245 million on the NBR Rich List this year.
 

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