Michael Hill halfyear net profit rises 82%

MICHAEL Hill International posted a net profit after tax of $A38.9 million ($NZ41.9 million) in the six months to December 27, 82% higher than the $A21.4 million it posted a year earlier.

Operating revenue in the 26week period fell almost 3% to $A319 million, compared with $A329 million in FY19.

This could be attributed to 3709 lost storetrading days across its three operating markets, and the closure of 15 underperforming stores, equating to $23 million in lost sales, the company said.

Its earnings before interest and tax (ebit) increased by 66.9% to $A58.9 million.

Michael Hill will pay out a dividend of 1.5c per share for the period, in line with the payout in the corresponding period last year. The decision to hold the dividend flat reflected ‘‘the risks of ongoing trading disruption’’.

Group digital sales increased by 102% to $18.5 million in the sixmonth period, now representing almost 6% of total sales, while samestore sales increased 6.3% to $312 million compared with $293.6 million a year earlier.

Daniel Bracken, chief executive of Michael Hill, said the group was pleased with the results, given the challenging operating environment due to the coronavirus pandemic.

‘‘I’m particularly pleased with our results given the challenging environment for our business — continuous store closures throughout the half, significant decline in foot traffic in all markets, the material impact of 3709 lost trading days, and not a single day of all stores open. Despite all these obstacles, to deliver this significant performance improvement is truly outstanding,’’ Mr Bracken said in the market announcement.

Company samestore sales in New Zealand increased by 2.8% to $A68.4 million in the period, while samestore sales increased by 12% to $A174 million in Australia and 3.6% to $A70.3 million in Canada.

The outlook for the second half of the financial year was positive and the company was wellplaced to continue to drive growth, as its navigated ‘‘an unpredictable retail landscape’’, Mr Bracken said. — The New Zealand Herald