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Michael Hill full year profit up 33 pct


Friday 19th August 2011

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Jeweller Michael Hill International reported a 32.6 percent rise in full year net profit to $34.4 million, with lower losses in the United States and Canada.

Revenue for the 12 months to June rose 10.3 percent to $489.3m, and same store sales rose 9.2 percent on the same period last year. A final dividend of 3c per share is to be paid, up from 2.5cps last year.

Chairman Sir Michael Hill said top line sales had recovered well after a difficult period since October 2008, but the retail sector remained difficult in all markets.

A continued focus on the company's diamond bridal business reaped benefits as average sale value continued to grow, while the expansion of the Michael Hill bead charm collection also resulted in strong growth.

The decision to reduce the US operation from 17 stores to nine in June 2010 had been vindicated with good same store sales growth, with all nine stores now refurbished to the latest design, Hill said.

Further improvement was needed in that market before the company could be confident the business had reached a level of performance that would justify further store growth.

Canadian operations had strong sales growth and had recovered much of the ground lost since 2008 when it had broken into profit. The company was confident of success in the Canadian market and intended to push on with steady growth, Hill said.

The New Zealand and Australian segments continued to perform well over the year with both businesses growing revenue and bottom lines, even though the retail environment in both countries had remained patchy.

Revenue from New Zealand retail operations rose 6.2 percent to $101.7m, with operating surplus up 15.7 percent to $18.6m, and same store sales up 5.4 percent.

In Australia, retail revenue rose 6.2 percent to $A251m ($NZ308.8m), while the operating surplus rose 2.2 percent to $A38.9m, and same store sales in local currency rose 4.7 percent.

Canadian retail revenue was up 22.7 percent to $C36.8m ($NZ45.2), with an operating loss of $C174,000 compared to a loss of $C1.2m a year earlier, while same store sales rose 12.1 percent in local currency.

US retail revenue was $US8.1m, with a loss of $US3.4m compared to a loss of $US6.3m the year before. Same store sales rose 20.3 percent in local currency terms.

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