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Michael Hill profit rises 20%

Friday 15th August 2008

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Michael Hill International, the jewelry chain that bears its founder's name, said full-year profit rose 20% after it opened new stores and trimmed sales costs.

Profit rose to NZ$25.2 million, or 6.6 cents a share, from NZ$21 million, or 5.35 cents a year earlier, the company said in a statement. The cost of goods sold fell 1.2% to NZ$140 million.

The retailer opened 21 stores in the latest 12 months, bringing its total to 210 across Australia, New Zealand and Canada. EBIT in Australia gained 18%, while earnings in New Zealand rose 8.3% and its fledgling Canadian unit posted a C$44,000 loss.

Michael Hill shares rose 2.3% to 89 cents today and have declined 29% this year.

The impact of new store openings helped mask a decline in sales from outlets open at least 12 months. Same-store sales growth dwindled to just 0.1% in Australia and fell 2.5% in New Zealand.

Government figures in New Zealand today showed retail sales growth excluding auto-related items stalled in June while store owners built up inventory the past 12 months. That may lead to sales in the third quarter, economists said.

By Jonathan Underhill

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