Jewellery retailer, Michael Hill, has increased first-half profit 5.1 per cent, after improved Australian performance and boosted margins in its New Zealand and Canada segments.
The company posted an increase in profit of $24.9 million, or 6.48 cents per share, in the six months ending December 31, from $23.7 million, or 6.15 cents, in the same period the previous year.
The Brisbane-based company’s revenue increased 9.7 per cent to $310.8 million. Michael Hill grew revenue and earnings in Australia, which is its largest market, after posting weaker earnings last year.
The company also revealed its New Zealand and Canadian units boosted earnings and profit margins, while its US segment was impacted by store changes.
CEO Mike Parsell said they were pleased to “see both revenue and EBIT growth” in Australia, which they consider their largest market, “given the continuing lack in consumer confidence in many parts of the country.”
“We are also delighted to see strong performances from our Canadian and NZ segments with 46.7 per cent and 10.3 per cent increases in EBIT respectively,” Parsell said.
He said the company’s US segment faced a difficult half with their “triple A” stores in Chicago being closed for three months “for refurbishment as part of a broader centre redevelopment.” But, he said they are confident the second half “can lift back to previous levels of performance.”
The retailer’s 166 Australian stores increased EBIT 2.9 per cent to $32.4 million as revenue rose 4.2 per cent to $175.6 million. The profit margin has slipped to 18.5 per cent from 18.7 per cent in the year earlier period. Same store sales grew 3.4 per cent following a 1.9 per cent decline in the year earlier period.
Michael Hill’s 52 New Zealand stores grew EBIT 10 per cent as revenue rose 6.7 percent. This was also aided by a strong Auckland economy. The jewellery retailer’s profit margin improved to 22.7 per cent from 22 per cent.
The company’s Canadian unit improved EBIT 47 per cent as revenue jumped 19 per cent. Store numbers increased to 65 from 59 and the profit margin widened to 13.9 per cent from 11.3 per cent.
The retailer says the ‘Emma & Roe trial is performing well’ with three new store openings taking the total to 11 for the offshoot concept. “The Australian stores are concentrated in Queensland and five new sites have been identified for store openings in the next few months,” said Parsell.
