Earnings before interest and tax were $72.4 million, compared with $14.1 million the previous year.
The company’s revenue from Australian stores was $312.3 million, a 17 per cent increase compared to FY20, while revenue from New Zealand stores exceeded $121 million – 19 per cent increase over the previous year.
Commenting on the result in a media release, Daniel Bracken, CEO MHI, said, “I am particularly proud of our results, underpinned by strategy execution and the resilience of our team.
“The transformation agenda touches every single part of our business, working together to deliver common goals – the results speak for themselves, and I couldn’t be happier.”
Bracken added, “Setting aside the global store network closure in 2020, the company has now delivered eight consecutive quarters of positive same-store sales growth together with sustained margin expansion.”
As at 30 June 2021, there were 150 Michael Hill stores in Australia – a loss of five stores on the previous year and representing more than 52 per cent of its 285 total store count.
Currently, 46 NSW, 34 Victorian and 4 ACT stores are temporarily closed due to government-mandated lockdowns.
The company had 49 stores in New Zealand – no change from the previous year – and at the time of publication, all were temporarily closed due to lockdowns.
Bracken explained: “Throughout the year, we successfully navigated the complexity of the global pandemic, with half our Canadian stores closed for many months, and sporadic temporary closures across our global network.
“While it was an incredibly challenging year, the strength of our brand and the determination of our team delivered record results and further validates the transformation is on track.”
MHI also experienced encouraging results in Canada, where all-store revenue increased by 6.9 per cent to $CA118.4 million, up from $CA110.8 million the previous year.
This included a same-store sales increase of 6.8 per cent.
The company noted: “This segment was heavily impacted by temporary store closures in Eastern Canada, with 6,525 lost store trading days for the year. By early July, all 86 stores were open and have remained trading, with our strategic focus now returning to the productivity opportunity in the market.
“Gross margin for the year was 61.3 per cent (FY20: 57.8 per cent), a significant improvement on both FY19 and FY20.”
The road ahead
The financial announcement noted that MHI had experienced “significant lost sales in the first seven weeks of FY22 due to lockdowns in Australia, strong early performance in Canada and New Zealand contributed to +17 per cent group same store sales for the period.
“These early results further demonstrate the progress and traction of the brand, however the increased disruptions in Australia and now New Zealand, are significant.”
Management estimated that the 2,755 lost trading days – a figure calculated by adding the opening hours of all temporarily closed stores – would lower revenue expectations by $5 million, with sales down 2 per cent.
In an effort to improve and expand its e-commerce business, Keith Louie was appointed to the newly-created role of chief digital officer.
Bracken said, “With our strategic agenda progressing, we are placing a greater emphasis on digital, with the appointment of Keith Louie, as our first chief digital officer. His appointment, alongside the recent arrivals of Amy Sznicer, chief retail officer, and Jo Feeney, chief marketing officer, adds significant expertise to our already high-calibre leadership team.”
He added, “Our strong financial position provides us with a stable platform to continue our transformation journey, elevate the brand and further explore new opportunities across all channels and markets.”
MHI’s digital sales increased by 53.4 per cent in FY21 to a record $34.8 million, representing 6.3 per cent of total sales – and increase from 5 per cent the previous year.
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