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Michael Hill lifts first quarter sales 6.5% as US sales surge

Tuesday 11th October 2011

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Jeweller Michael Hill International said first-quarter revenue rose 6.5% in New Zealand dollar terms, boosted by a surge in U.S. sales.

Revenue climbed to $101.4 million in the three months ended Sept. 30, up from $95.2 million in the same three months last year with same-store (stores open 12 months or more) sales up 1.4%.

U.S. sales jumped 21% to $2.3 million in New Zealand dollar terms and were up an even greater 37.4% in U.S. dollars, the difference reflecting the strong New Zealand dollar.

“The board is pleased with the sales results, especially given they were on the back of strong growth in the first quarter of last year,” chairman Michael Hill said in a statement.

Still, he warned trading in the current quarter is the most critical time of the year for the company “so the next three months trade will largely determine the result for the 2011 – 2012 year,” Hill said.

Sales in Michael Hill's biggest market, Australia, rose 7.2% to $64.6 million in the quarter with same-store sales up 1.6% while sales in New Zealand rose 1% to $20.9 million with same-store sales up 1.3%.

Sales in Canada rose 11.3% to $9.4 million but same-store sales were down 3.4%, reflecting the impact of the strong New Zealand dollar.

Hill said the sales figures don't include the $5.4 million in revenue collected in the quarter from the sale of professional care plans (PCPs) which were launched in October last year.

“The revenue from these plans is carried on the balance sheet as deferred revenue and will be brought to income over the life of the plans (three year and life time),” he said.

The PCP program “has the potential to contribute materially to income.”

Michael Hill shares are unchanged at 81 cents, up from 75 cents early this month but down from 94 cents in June.

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