18 Feb 2010

Australia puts sparkle in Michael Hill's half-year profit

11:34 am on 18 February 2010

Michael Hill International says its underlying half year profits rose due to better trading in Australia.

Headline profit at the listed jewellery retailer fell by two thirds to $22.3 million in the six months to December, due to a one-off tax credit of $53 million in the previous period.

Excluding that tax gain, profit rose 54% to $27.5 million.

Sales rose 8% to $245 million: Australian operations, which make up two-thirds of income, performed strongly.

Michael Hill says trading In New Zealand is tough and margins remain under pressure. Costs rose from introducing finance plans to help boost sales.

In North America, it opened another three new stores in Canada to take its total to 29, but consumer spending there remains weak and its operating surplus fell.

Losses in the United States, which it entered late in 2008, rose to $2.9 million.

Looking ahead, Michael Hill says demand remains uncertain and it's concentrating on improving the performance at its 242 stories and containing costs.