Thursday 8th February 2018
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Michael Hill International expects first-half earnings will more than halve with A$20 million coming from the jewellery chain's exit from the US and scaling back its Emma & Roe branded store footprint.
The Brisbane-based company said earnings before interest and tax was about A$20 million in the six months ended Dec. 31, down from A$40 million a year earlier. Of that, about A$8.4 million arises from onerous lease provisions and another A$11.4 million from impairment charges on property, plant and equipment, it said in a statement.
"Despite the one-off accounting impacts from store closures, the decisive actions taken to reduce the Emma & Roe store footprint and exit the US are critical to strengthening the foundations of Michael Hill International as we focus on building significant long-term value in our core business across Australia, New Zealand and Canada," chief executive Phil Taylor said.
Last month the jewellery chain announced plans to quit its decade-long investment in the US and overhaul its Emma & Roe brand into demi-fine products with a smaller physical store footprint. At the time of the announcement, the company said it expected to write down the Emma & Roe assets by A$7 million, but wasn't sure of the financial impact from the US exit.
Michael Hill is still negotiating with landlords over the Emma & Roe stores and US exit and hasn't determined the final timing of cash cost of the closures, it said.
The dual-listed shares fell 2.1 percent to A$1.18 on the ASX.
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