13 Feb 2015

Michael Hill lifts first half net profit 46%

3:00 pm on 13 February 2015

Shares in Michael Hill International have risen as much as 7 percent after the company's first-half net profit jumped by nearly half, despite falling sales in its largest market, Australia.

The firm's stock hit $1.23 a share in Friday morning trading, from $1.15 on Thursday.

Its net profit rose to $A23.7 million for the six months to the end of December, an increase of 46 percent, compared with the same period a year earlier.

Sales rose 4.6 percent, but those in Australia, which account for nearly two-thirds of the total, fell nearly 2 percent.

The company said the Australian market is challenging due to lower consumer confidence, particularly in mining areas, but a focus on cutting costs helped lift operating earnings by 8.6 percent.

New Zealand, Michael Hill's second largest market, proved a much stronger performer, with sales up 4 percent and profit margins rising 2 percentage points to more than 22 percent, the highest the firm achieved in the four regions in which it operates.

Australian margins rose a similar amount to 18.7 percent of sales.

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