Shares up 10% after report

SHARES in Michael Hill International jumped 10% after the jeweller reported better than expected firsthalf earnings and maintained its dividend.

The company said its underlying earnings before interest and tax fell 16% to $A29.6 million ($NZ30.9 million) because of a weak trading performance in the July to October period, when it veered away from discounting

However, a ‘‘refined approach’’ to its strategy resulted in an improvement in November and December. Samestore sales fell 6.1% but the decline was less severe towards the end of the period.

The Brisbanebased retailer restructured its business last year, quitting the US and exiting its Emma & Roe subbrand to focus on highmargin sales and make better use of other sales channels, such as online. It also slashed the amount and level of discounting and the frequency of pricebased event days as people were deferring purchases to take advantage of those events. But it rejigged that strategy in the half after other promotions failed to bring enough customers through the door.

Net profit rose 125% to $A19.5 million but that comparison included $A22 million of losses a year earlier on the closure of Emma & Roe and the US businesses. Profit from continuing operations was $A30.7 million in the prior period.

The company, which has stores in New Zealand, Australia and Canada, would pay an interim dividend of A2.5c a share, unfranked and fully imputed, it said.

The duallisted stock lifted 10.5% to 63c on the NZX after the result. — BusinessDesk