By Phil Boeyen, ShareChat Business News Editor
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Friday 22nd February 2002 |
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The half-year result is 12.5% higher than the previous interim surplus with a positive result from its New Zealand stores tempered by a drop in margins in Australia.
Sales revenue for the period climbed to $115.7 million from $104.7 million previously.
The local operations grew revenue by 14% and earnings before interest and tax by 22% to $6.546 million. Included in the result is a $340,000 pre-tax profit on the sale of the head office here. Same store sales for the 6 months increased by 9.7% compared to a drop of 1.9% previously.
The company says two new stores, one at Mt Maunganui and another at Taupo, are trading very well. There are now 43 stores operating in New Zealand and another two are likely to be added before the end of the year.
Across the Tasman the company grew revenue by 8.5% at its 78 stores but Ebit fell 10%.
"The main cause of this drop was an erosion of gross profit margin in the first 5 months of the financial year due to a combination of aggressive marketing and pricing in a tight economy, especially after September 11th when sales dropped off dramatically for some time," the company says.
"Margins have been back to normal since December. Same store sales were up 3.8% on last year."
For the future the company says its philosophy of controlled profitable growth will continue and, with this in mind, is investigating expanding the group to Canada.
"A full feasibility study and business plan is to be completed by the end of May at which stage the board will decide whether to proceed. This is a very exciting opportunity for the Group and would open up enormous growth potential for the Michael Hill Jeweller chain.
"The company continues to be in very sound shape and with the growth opportunities ahead of it, the future looks very exciting."
MHI has declared an interim dividend of 7 cents per share, up from 6.5 cents previously.
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