The New Zealand Stock Exchange-listed retailer increased revenue 8.3 per cent on the same period the previous year to $256.6 million. Earnings before interest and tax weighed in just under $30 million – up 3.4 per cent.
In a company statement, chairman Sir Michael Hill said the additional resources placed in Australia in mid-2012 had started to have a positive impact on sales.
The company’s Australian retail segment increased its revenue by 10.6 per cent to $162.7 million for the six months with an operating surplus of almost $28 million, compared to $24.3 million for the previous corresponding period.
Seven new stores across New South Wales, Victoria, South Australia and Queensland were opened during the period.
Meanwhile, revenue in New Zealand reached $51.8 million, an increase of 3.6 per cent. The company reported an operating surplus of $10.6 million, up 6.2 per cent on the corresponding period last year.
The announcement follows disappointing results during the Christmas period for the fine jewellery chain. As Jeweller reported last month, Michael Hill International said it failed to meet its Christmas trading expectations, with all four of its markets struggling to gain traction.
In light of this, Sir Michael described the six months trading period as a “story of two quarters” – a strong first quarter followed by a slowdown in the second.
“All countries struggled to make gains on the previous year’s sales numbers during the key December quarter however “same store” growth was achieved in all markets during the six months which is pleasing,” the chairman said.
Sales in Canada jumped 21.5 per cent to $28.42 million ($CA29.46 million) for a 31.7 per cent gain in earnings to $1.5 million. Revenue at the US chain increased 4.2 per cent to $5.3 million ($US5.49 million), narrowing its loss to $1.2 million.
The company reported it still had two unresolved tax matters with New Zealand’s Inland Revenue (IR) and the Australian Taxation Office (ATO). The issue concerns the way it financed a 2008 restructure involving the sale of intellectual property from one of its New Zealand companies to an Australian subsidiary.
The IR is disputing $20.2 million in deductions claimed by the New Zealand company and the ATO is at odds with the $34.1 million deferred tax asset resulting from the depreciation of the intellectual property.
Sir Michael claimed both matters: “are capable of being resolved by agreement, but if the group is unable to find common ground with either the IR or ATO then further formal legal processes may be needed to achieve resolution”.
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