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Diamond in the rough: Michael Hill's $45m boom comes with a warning

Business

Jewellery retailer Michael Hill has been one of the big winners from the pandemic with its profits growing a staggering 1380 per cent.

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But the company, which has sites in Canada, New Zealand and Australia has raised red flags about the on-going lockdowns with “significant lost sales” in the first weeks of the 2022 financial year.

The company has been hit by the loss of 10,447 days in store closures for the year and total sales were down 2 per cent for the period with an estimated $5 million impact on earnings compared with management’s expectations.

Its digital sales channel has been its bright spot with an increase of 53 per cent, but the company said its bricks and mortar stores were fundamental. That allowed the company to return a profit of $45 million, a massive lift on its $3 million profit the previous year.

It trialed virtual selling, click and reserve and ship-from-store initiatives throughout the year and will now roll those out across the network. It will also have a click and collect service ready for Christmas.

Chief executive Daniel Bracken said the result was due to strategy execution and team resilience.

“The transformation agenda touches every single part of our business,” he said.

“The results speak for themselves and I couldn’t be happier.

“Throughout the year we have successfully navigated the complexity of the global pandemic with half of 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.”

The company said it would pay a final unfranked dividend of 3 cents a share.

In Australia, store revenue increased by 17 per cent and same-store sales were up 13 per cent despite 3458 lost store trading days. New Zealand revenue was up 19 per cent and Canada was up 7 per cent.

 

 

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