Michael Hill flags increased 1H earnings as sales rise 10 percent

Sir Michael and Lady Christine Hill with store manager Althena Birch at the opening of their revamped Whangarei store. Photo / APN

Michael Hill International, the jewellery chain that bears the name of its founder, expects first-half earnings to rise after reporting a 10 per cent lift in sales over the period.

Earnings before interest and tax were between A$29 million and A$30 million in the six months ended Dec. 31 from A$28.6 million a year earlier, the Brisbane based jeweller said in a statement. That came from as sales rose to A$270.8 million across all its stores from A$246.3 million in 2013.

The revenue gains were led by a 38 per cent increase in Michael Hill's Canadian stores, which generated A$39.4 million, up from A$28.5 million.

New Zealand sales, when converted into local currency from the Australian dollar which the company reports earnings in, fell 4.1 per cent, to NZ$60.9 million.

"Our New Zealand stores continued to struggle," said the company in a statement. "This fall in revenue for the half was in part due to the settling in of a new retail management team mid-2013. The company is confident this decline will be reversed in the coming months."

In Australian dollar terms, New Zealand sales rose 8.2 per cent to A$49.7 million. A weaker Australian dollar supported the group's 10 per cent lift in revenue, which accelerated from an 8.7 per cent rise in the first quarter.

Michael Hill's Australian revenue rose 5.5 per cent to A$171.7 million, while US sales gained 3.8 per cent to A$5.5 million.

The company said sales in the US had been affected by the severe winter conditions over the Christmas period.

Shares in Michael Hill International were unchanged at $1.44, and have gained 18 per cent over the past 12 months.