Michael Hill buoyed by sales growth

 

michaelhill, jewellery,Jewellery chain, Michael Hill International, is reporting a 10.5 per cent gain in sales for the first nine months of the year, led by growth in Canada and Australia.

Sales rose to $A372 million ($NZ400.5 million) in the nine months ended March 31, from $A336.8m a year earlier, the Brisbane-based retailer said in a statement.

Same-store sales rose 5.4 per cent to $A338.6m.

The company relocated to Australia in 2008, transferring its intellectual property to an Australian subsidiary in a transaction that put its head office in its largest market and generated tax breaks.

Earlier this month Michael Hill announced an $A6m settlement with the Australian Tax Office, which had disputed the valuation of IP.

Same store sales in Australia rose 1.4 per cent to $A214m in the first nine months, while Canadian sales rose about 17 per cent to $A41m and US sales rose 17 per cent to $A7.8m.

Same-store sales in New Zealand gained 10 per cent to $A75.2m, although this largely reflected a strengthening kiwi dollar against the Australian dollar. In local currency terms, New Zealand sales fell 2.9 per cent to $83m.

Sales from the retailer’s professional care plan business rose about 23 per cent to $A24.5m and the company brought $A13m of PCP revenue to income, up 99 per cent from the same period a year earlier.

The shares last traded at $1.33 on the NZX and have slipped 0.8 per cent in the past 12 months. The stock is rated a ‘buy’ based on the consensus of three analysts polled by Reuters.

BusinessDesk

You have 7 articles remaining. Unlock 15 free articles a month, it’s free.