Michael Hill earnings roar back after Covid-19 hit – NZ Herald

Business

Michael Hill International chief executive Daniel Bracken. Photo / Supplied

Michael Hill International’s first-half earnings roared back into life over the first half to December 27, driven by solid growth in same-store sales.

The jewellery retail chain – which has stores in New Zealand, Australia and Canada – said it had brought forward payment of a previously deferred A1.5c interim dividend to January 29 from September 30.

The dual-listed company’s full-year profit to June last year plunged more than 80 per cent due to Covid-19 driven temporary store closures.

In today’s update, Michael Hill said it expects to report EBIT of A$56m to A$60m for the first half.

Excluding wage subsidies received in New Zealand, Australia and Canada, first-half earnings were expected to come to A$41m to A$45m – representing 30 to 40 per cent EBIT growth compared with the previous corresponding period.

Chief executive Daniel Bracken said the company had positive same-store sales growth for the all-important Christmas trading period.

Same-store sales were up 6.3 per cent for the half and up 5.6 per cent for the quarter against prior year, with an outstanding performance in Australia.

There had been margin growth in all markets and channels of 150 to 250 basis points for the half against prior year.

Online sales were up 102 per cent, with digital initiatives continuing to deliver increased sales and margins across all markets.

Digital channels now represent 5.8 per cent of the company’s total sales, up from 2.8 per cent.

Branded collections represented 38.4 per cent of total product sales for the half, up from 34.4 per cent.

During the temporary store closures, a number of initiatives were successfully deployed, incuding contactless pick-up and ship from store.

Given the strength of trade through the critical Christmas period and the Company’s strong balance sheet, a program of word remediation had resumed.

Michael Hill said employees will be contacted over the coming weeks with payments to follow.

Payment of the 2020 interim dividend was originally payable in March 2020 but was deferred to preserve cash when the pandemic broke out.

Shares in Micheal Hill rallied by 6c, or 8.2 per cent, to 79c on the back of the news.