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Tough times in Australia for Michael Hill International

Australia is proving tricky for Michael Hill International, with the company warning that “difficult” trading across the Tasman will hit its interim profit.

In a trading update for the six months to December 31, the listed jewellery retailer reported solid same store sales growth in New Zealand, Canada and the United States.

However, it said retail was “challenging” in Australia, its largest market, resulting in a drop in same store sales for the period.

“The difficult market in Australia also put pressure on our margins during the second quarter which will adversely impact on profits for the half year,” MHI said, adding that Australia aside, the group’s cash flow remained strong for the half year.

MHI also noted the success of its PCP product since its launch in October 2010.

Revenue from sale of goods for the half year to 31 December 2011 (NZ dollars) (Table corrected from earlier version)
                                                       Last year              This year             Change
Australia same stores                178,209,185       177,400,018        (0.5%)
New Zealand same stores          54,409,635         59,814,848          9.9%
Canada same stores                    25,179,995         25,719,444          2.1%
United States same stores             5,694,527           6,629,475         16.4%
Total same stores                     $263,493,342     $269,563,785          2.3%

The figures represent five months accounting adjusted sales results plus December preliminary sales figures prior to final accounting adjustments and are unaudited.
Half year results for the six months months to December 31, 2011 will be released on February 16. 

Comments and questions

I guess there will be another round of compulsory re-reading of the BOOKS across the executive team !