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Michael Hill International recorded its highest ever full-year sales result
Michael Hill International recorded its highest ever full-year sales result

Michael Hill jewellery achieves record result

Michael Hill International recorded its highest ever full-year sales result, according to the group's latest financial report.

The company finished the 12 months ended 30 June 2016 with a record total revenue of $551.1 million, an increase of 9.5 per cent compared with the previous year.

Same store sales increased 5.2 per cent year-on-year while revenue also rose across all operating markets.

Michael Hill International’s [MHI] earnings before interest and tax increased 11.9 per cent to $47.1 million.

Net profit after tax, however, fell 29.5 per cent to $19.6 million, owing partly to two tax issues.

The company settled a “long running” tax dispute with the Inland Revenue relating to the financing of the intellectual property transferred from its New Zealand subsidiary to its Australian subsidiary in 2008.

The other tax issue arose as a result of MHI’s transfer of its primary stock exchange listing from the New Zealand stock exchange to the Australian Securities Exchange on 7 July 2016.

Company expansion

A company statement noted: “2015-16 was a significant year for the group with a record EBIT result being achieved on the back of solid performances by our Australian, New Zealand and Canadian businesses.”

Michael Hill sales in Australia increased 4.4 per cent to $307.3 million; New Zealand recorded a 7.2 per cent revenue rise to $122.2 million; and Canada achieved an 18.9 per cent increase to $94.1 million.

The US market reported a 24.4 per cent rise in sales to $14 million; however, the result did not meet expectations.

A presentation to investors stated: “Same store sales [in the US] were up 3.5 per cent for the 12 months, which was short of our expectations and budgets.

“A renewed focus on growing top line sales is needed to bring this test group of stores to a level that would justify further store openings.”

There were currently 10 US Michael Hill stores and no openings in the region were planned for the current financial year.

Sales from the company’s Emma & Roe business – in its first full year of operation – rose 91.6 per cent to $9.3 million compared with the previous corresponding period.

This reflected the fact eight Emma & Roe stores opened in Australia in the past year, bringing the total as of June 30 to 15 in Australia and one in New Zealand – currently the only countries with Emma & Roe locations.

There were 11 Michael Hill store openings in the same period, bringing the total number of stores – including Emma & Roe businesses – to 313 across Australia, New Zealand, Canada and the US.

A total of 14 Michael Hill stores were scheduled to open in the current financial year across the group – three in Australia, one in New Zealand and 10 in Canada.

There were a further 10 Emma & Roe stores planned to open in Australia and two in New Zealand by June 2017.

More reading
Michael Hill CEO steps down
Michael Hill sales lift across all markets
Michael Hill restructures for ASX transfer
Michael Hill enters new market

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