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Michael Hill 9-month sales rise 8.8 percent , led by Australia, New Zealand

Tuesday 9th April 2013

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Michael Hill International, the jewellery chain that bears its founder's name, said sales in the first nine months of the year rose 8.8 percent on revenue gains in its biggest markets of Australia and New Zealand.

Sales climbed to $425 million in the nine months ended March 31, from $390.8 million a year earlier, the Brisbane-based retailer said in a statement. Same-store sales climbed 2.2 percent to $388 million.

Shares of Michael Hill have gained 26 percent in the past 12 months, a period when retailers battled to win consumers. The biggest lift in the first nine months came from Canada, where sales jumped 18 percent to $48.9 million, and the US, which lifted revenue 4.8 percent to $9.3 million.

The sales figures include revenue brought to income from its Professional Care Plan product, which offers maintenance and repairs on jewellery. Revenue from the plan jumped 25 percent to $25 million, while revenue brought to income soared 204 percent to $8.3 million.

The shares last traded at $1.34 and are rated 'outperform' based on two recommendations compiled by Reuters, with a price target of $1.315.

Sales in the first nine months were dented slightly by the effects of converting offshore sales into kiwi dollars. In local currency terms, Australian sales rose 11 percent, Canadian revenue was up 21 percent and US sales gained 7.7 percent.

The retailer said it is still at odds with New Zealand's Inland Revenue Department and the Australian Taxation Office over the way it financed a 2008 restructure where the group sold intellectual property from a New Zealand unit to an Australian subsidiary and relocated across the Tasman.

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