Michael Hill boosts earnings outlook

Photo / Herald On Sunday

Michael Hill International, the jewellery chain facing a partial takeover bid by the Hill family, has lifted its earnings outlook after posting stronger first-half sales.

The jeweller expects to report first-half earnings before interest and tax of between $32 million and $34 million, compared to the $30.3 million posted last year.

That comes after it lifted sales 9.9 per cent to $268.7 million in the six months ended December 31, from the same period in 2009.

Most of the growth came in the company's Canadian stores, which lifted revenue 24 per cent to $26.1 million.

Australian sales were up 11 per cent to $180.6 million and New Zealand stores up 7 per cent to $56.1 million.

The US business, which closed eight stores last June, reported a 24 per cent fall in revenue to $5.7 million.

"Sales in the second quarter, including the key Christmas trading period held up well," chairman Michael Hill said in a statement.

"The directors are especially pleased to see sales in Canada and the United States bounce back after tough trading conditions since late 2007. However, retail conditions remain difficult in North America."

The first-half earnings follow on from a 13 per cent gain in sales to
$95.4 million in the three months through September.

The shares were unchanged at 87 cents in trading yesterday, and climbed 31 per cent last year.

The Hill family is offering 90 cents a share for 5 per cent of the company in a bid to take its holding up to 50.2 per cent.

The offer, which is the family's second in the past six months, is open until January 19, and has already won over the New Zealand Superannuation Fund and Accident Compensation's investment portfolio.