Michael Hill boosts 1H sales 8.7% on 'steady' margins; mulls ASX listing

Michael Hill International, the listed jewellery retailer, increased first-half sales 8.7 percent and maintained its gross margin even as the US dollar strengthened.

Sales rose to A$306.3 million in the six months ended Dec. 31, from A$281.7 million in the year earlier period, the Brisbane-based company said in a statement. Same-store sales gained 4.8 percent to A$289.8 million.

The retailer, which had previously flagged that gross margins were under pressure from a strong US dollar, said today that the margin "held steady" in the latest six month period compared with the year earlier despite the strengthening US dollar, which impacts the price the manufacturing jeweller pays for its supplies. In Australia, its largest market where it reported weaker earnings last year, sales rose 3.5 percent to A$174.4 million and the stores "traded solidly through the crucial month of December," the company said. On a same-store basis, Australian sales rose 2.6 percent.

Michael Hill opened six new stores during the first half, taking the total to 293.

The company, founded by its namesake in Whangarei in 1979, said it's considering listing on the ASX, given most of its operations are now based in its dominant market of Australia, and its financial reports are now in Australian dollars.

Michael Hill stock rose 1 percent to 99 cents on the NZX main board, valuing the company at $379.3 million. Much of the stock is held by members of the Hill family, giving it a free float of $160.7 million, according to Reuters data.

In New Zealand, sales rose 6.1 percent to $67.1 million with no changes to store numbers. In Canada, sales jumped 18 percent to C$53.1 million, an uplift of 5.2 percent on a same-store sales basis. In the US, sales increased 25 percent to US$7.4 million, while same-store sales edged up 1 percent.

Its Emma & Roe chain selling charm bracelets and accessories boosted sales 96 percent to A$4.96 million. The company said the chain's same-store sales growth of 49 percent was in line with its targets.

The business, which is in a trial phase, added three new stores during the first half, taking the total to 11, and it plans to open a further five stores before the end of the financial year. All of the stores are in Australia, except for one in New Zealand.

(BusinessDesk)