Michael Hill proves a gem at exporting

Friday 4th June 2004

Where so many have been mired down with expensive, messy acquisitions, Michael Hill International has cracked Australia with its recipe of disciplined, profitable organic growth and has set its sights on Canada and further afield.

Latest sales figures showed the tills were ringing a little weakly back home, where sales rose 1.5% for the nine months to March. But the 93 Australian stores turned in sales of $124 million, up 20.7% and the Canadian operations increased sales substantially to $4 million.

As the interim results proved, group return on shareholders' funds of 22.7% and a healthy equity ratio of 45.2% show patient expansion doesn't have to come at a financial cost.

Ironically, the cost of expansion comes in the form of 28 redundancies as the company moves its head office to Brisbane.

The diamond ring manufacturing operation will remain in Whangarei, however, and there are no immediate plans to downsize further.

And as Hill and family still have their feet on a controlling shareholding Michael Hill International isn't likely to join the ranks of successful New Zealand companies snapped up by multinationals any time soon.

The transtasman leap, which was flagged for some time, is not expected to affect the group's profit for the current and next financial year.

The company has plans to operate over 200 stores in Australia and New Zealand and another two sites are under investigation for Canada at this stage.

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