21 Aug 2017

Michael Hill makes strong full-year profit

3:26 pm on 21 August 2017

Michael Hill International's strong full-year profit was underpinned by growth in its three key markets - Australia, New Zealand and Canada.

Michael Hill Jeweller

Michael Hill Jeweller Photo: RNZ / Calvin Samuel

The Australia-based listed jewellery company's full-year net profit rose by 67 percent to $A32.6 million in the 12 months ended in June, impacted by tax costs over the past couple of years.

Sales rose nearly 6 percent to A$583m, with same store sales up nearly 1.6 percent.

Michael Hill chief executive Phil Taylor said New Zealand's sales fell just under 1 percent, although it was still able to increase the underlying profit by nearly 3 percent to a record $NZ28m.

He said Australia's trading conditions had been pleasing considering the challenging retail environment, with sales up 4 percent.

The Canadian business was a standout, with an 18 percent increase in sales, in contrast to the fledging United States operations that saw sales fall nearly 9 percent.

"Obviously our Canadian operation is performing exceptionally well and we appear to be taking market share in that competitive market. And we are pretty pleased with the Australasian business as well - holding up in the face of a lot of competition and a bit of negative consumer sentiment, so we're pleased with the core business," he said.

Michael Hill wrote down the value of two underperforming US stores and made provisions to exit the leases, costing it US$1.3m.

Mr Taylor said Michael Hill would continue to test the US market, as it tries to build a viable business there.

In the meantime, he said the Michael Hill brand would continue to expand in New Zealand, Australia and Canada, aiming to have up to 340 Michael Hill stores, from the current 303.

He said the company was also committed to the roll-out of the Emma & Roe brand in Australasia, adding 13 stores over the past year, for a total of 29 stores.

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