KEY POINTS:
Despite a drop in same-store sales, Michael Hill International has reported a 27.1 per cent rise in half-year net profit after tax to $19.5 million.
Operating revenue for the six months ending December 31 was $209.2 million, up 4.8 per cent, with earnings before interest and tax up 27.8 per cent to $30.8 million.
The jewellery retailer said the results were achieved by focusing on supply chain and margin management, which impacted on the second quarter.
It expected to continue its philosophy of controlled profitable growth, with more new stores being evaluated in its New Zealand, Australian and Canadian markets. During the six months, 19 new stores opened and one closed.
Chief executive Mike Parsell acknowledged some challenging retailing conditions ahead. "We've got potentially in Australia, maybe one to two more interest rates rises that have been flagged to happen. That could have an adverse effect on general consumer demand and we're sensing certainly a tightening of retail conditions in Canada and New Zealand as well. If you look at that, I guess that would be a concern to most retailers.
"From our own perspectives it's really business as usual."
An interim dividend of 1.2c a share, with full imputation credits, was announced, compared with 1c a year ago.
The results were in line with the company's profit guidance of between $19.25 and $20 million announced this month.
A $1.4 million foreign exchange gain, compared to a $446,000 forex loss from the previous corresponding half year, helped add sparkle to results.
New Zealand retail revenue fell 1.1 per cent to $53.7 million, with same- store sales dropping 3 per cent. But earnings before interest and tax (ebit) still rose 12 per cent to $9.1 million.
Same-store sales also fell in Australia by 1.6 per cent, although revenue increased 5.8 per cent to $137.5 million. Ebit rose 19.8 per cent to $18 million.
Canadian same-store sales fell 3.7 per cent, but revenue rose 22.9 per cent to $17.7 million.
MICHAEL HILL INTERNATIONAL
Six-months to December 31
2007 2006
Revenue $209.2m $199.6m
Ebit $30.8m $24.1m
Net profit $19.5m $15.3m
Interim dividend 1.2c 1.0c
