KEY POINTS:
Jewellery chain Michael Hill International has posted a 20 per cent rise in full-year profit, despite flat or declining same-store sales.
Net profit after tax for the year ended June 30 was $25.23 million, up from $21.02 million last year.
Chairman Michael Hill, who built the retailing group
up from one shop in Whangarei, said the result was achieved by managing margins and controlling costs.
The retailer is relatively upbeat - despite an economic slump in New Zealand and the effects of a credit crunch continuing to be felt around the world.
Hill expects growth to continue, with new stores being considered in all of its three markets of New Zealand, Australia and Canada.
The group opened 21 new stores in the past year, giving it a total of 210 stores in three countries - a rapid expansion since Hill opened his first store in Whangarei in 1979.
Operating revenue for the yearwas $376.7 million, up 8 per cent.
Net group operating cashflows were $7.76 million, compared with $41.11 million for the previous year.
The company said the reduced surplus was the result of increased investment in inventory for new stores, and funding for an extended diamond range.
In New Zealand, revenue decreased by 0.4 per cent to $97 million, as same-store sales decreased by 2.5 per cent. The company added two new stores, in Trentham and Christchurch, bringing total New Zealand stores to 52.
Australian revenue was up 9.4 per cent to $247.1 million, despite same-store sales growing just 0.1 per cent. The chain added 13 new stores across the ditch, but closed three, giving it a total of 136 stores.
In Canada, revenue was up 28.6 per cent, despite a decrease of 1.8 per cent in same-store sales. Operating deficit grew from $5000 to $44,000 due to costs incurred from the entry into the Ontario market in east Canada in July last year.
The move saw the establishment of a separate retail team to manage this market, with five stores opening in Ontario over the past 12 months.
The west Canada operation experienced solid growth, with operating profit swelling from C$19,000 ($25,530) to C$890,000. Another store was added in west Canada, which, including the Ontario stores, takes total Canadian store numbers to 22.
A final dividend of 2c a share was declared, taking the total dividend for the year to 3.2c. Michael Hill shares closed at 89c, up 2c.
