Sharechat Logo

Michael Hill warns of A$20 mln hit to first-half earnings on US exit, Emma & Roe closures

Thursday 8th February 2018

Text too small?

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. 

(BusinessDesk)

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

MARKET CLOSE: NZ shares fall as F&P Healthcare loses latest patent dispute
NZ dollar pares losses; political jitters return across Tasman
Seeka reaps $15.9M from Northland sales
Reserve Bank plans sharper focus on material bank rule breaches
Wrong plans costing power consumers $39 mln - report
Vector's HRV fined $440k over water softening claims
Fonterra says India a major ingredients opportunity
NZ Shareholders' Association to vote against Wrightson's seeds sale
Infratil considers sale of Perth Energy
Tourism Holdings in talks to sell units including Kiwi Experience

IRG See IRG research reports