19 August 2005

3 August 2005

9 Months Sales To 31 March 2005

Note that these figures represent 8 months accounting adjusted results and March preliminary figures excluding accounting adjustments.

	Last Year	This Year	% Var
NZ same stores	64,848,049	64,827,386	0.0%
Australia same stores	119,285,808	118,986,771	-0.3%
Canada same stores	4,352,577	4,387,727	0.8%
Total same stores	$188,486,434	$188,201,883	-0.2%
NZ all stores	64,848,049	65,431,692	0.9%
Australia all stores	123,645,935	133,403,400	7.9%
Canada all stores	4,352,577	6,441,401	48.0%
Total all stores	$192,846,562	$205,276,493	6.4%

The above figures are all in NZ Dollars.

Commentary

1. New Zealand sales suffered in March resulting in same store sales being flat for the 9 months. Part of this shortfall was caused by Easter falling in March this year and April last year.
2. Australian same store sales were 4.3% up in AUD for the 9 months but were down in NZD due to the NZD strengthening against the AUD since last year.
3. Canada experienced tough sales in January but otherwise has bounced back for solid results in February and March.
   
   

R.M. Hill 08/04/05
Chairman

Click Here to download the Notice To The NZSE Dated February 2005 (1KB PDF File)

Click Here to download the 31/12/04 Preliminary Half Year Report Announcement (39KB PDF File)

Click Here to download the Statements Of Segmented Results (9.7kb PDF File)

Michael Hill International - Half Year Profit Result To 31/12/04

Chairman's Statement

Michael Hill International has today announced a record tax paid profit of $12,182,000 for the 6 months ended 31 December 2004, an increase of 11.6% over the previous corresponding period.

The trading profit was achieved on trading revenue of $152,732,000 up 9.3% on the corresponding period last year of $139,773,000.

Segment Results
As a result of our recent corporate restructuring the company has redefined its geographical reporting segments to better reflect the financial performance of each segment. The segments now reported on reflect the performance of the company's retail operations in each segment and exclude non-core retail activities such as manufacturing, wholesale and distribution, and other general corporate expenses. The Directors believe this change will better inform the readers of the financial performance of our geographic segments.

New Zealand Retail Operations
The New Zealand retail segment increased its revenue by 4.5% to $48,351,000 for the six months with earnings before interest and tax (EBIT) up 2.7% to $6,919,000. EBIT as a percentage of revenue fell from 14.6% to 14.3%. This fall was as a result of store operating costs increasing as a result of a decision by the company to invest in higher staff structures which would accommodate additional Trainee Managers and Sales Professionals. This strategy is consistent with the company's growth plans.

Same store sales during the 6 months increased by 3.8% (last year 0.9% decrease). There was one new store opened during the period at Glenfield in Auckland.

Total stores operating in New Zealand at 31 December 2004 were 47.

Australian Retail Operations
The Australian Company improved its revenue by 10.8% to $99,582,000 for the 6 month period (in NZ dollars) with EBIT up 13.0% to $12,344,000.
In Australian dollars, total revenue improved 15.8% with same store sales up 6.6% for the six months.
EBIT as a percentage of revenue improved from 12.2% to 12.4%.

Seven new stores were opened in Australia during the period, as follows:
Bunbury in Western Australia
Grand Central in Toowoomba
Batemans Bay in New South Wales
Mirrabooka Square in Perth
Parkmore in Melbourne
Raymond Terrace in Newcastle
The Pines in Melbourne

In total there were 100 stores operating in Australia as at 31 December 2004.
The exchange rate used for the translation of the Australian surplus was 0.92 (2003 -0.88).

Canadian Retail Operations
The Canadian operation improved its revenue 40.8% for the 6 months from NZ$3,316,000 to NZ$4,668,000.
Same stores sales increase of 4.9% was achieved during the six months.
The loss of NZ$208,000 for the 6 months was a 47.7% improvement on the previous year.

Three new stores were opened during the period:
Coquitland in Vancouver
Guildford in Vancouver
Willowbrook in Vancouver
The total number of stores open at 31 December 2004 was 7.

The exchange rate used for the translation of the Canadian loss was 0.81 (2003 - 0.81).

2. Interim Dividend

The Directors are pleased to announce an interim dividend of 9 ¢ per share (2004 -8¢), with full imputation credits attached for New Zealand shareholders and full franking credits for Australian shareholders. The dividend will be paid on Tuesday, 29th March 2005 with the record date being Friday 18 March 2005.

3. Cash Flows / Balance Sheets

The Group has reported net operating cash flows of $7,597,000 for the 6 months, compared to $18,908,000 for the previous year. This reduction in net cash flow from last year is a result of 10 new store openings (7 in 2004) and also increased stock levels in the first half to facilitate the centralisation of the New Zealand warehouse facility to Brisbane. The Directors expect a reduction in these higher than normal stock levels by 30 June 2005.

The Group's balance sheet is very sound with an equity ratio of 45.5% (2003 - 45.2%) as at 31 December 2004 (the interim dividend has not been provided for at 31/12/04 in accordance with FRS-5) and a working capital ratio of 3.3:1 (2003 - 3.9:1).

4. Summary

The Directors are very pleased with the results for the six months and the direction in which the Company is headed. The Group's philosophy of controlled profitable growth will continue and further new stores are being evaluated for all three countries as opportunities arise. The Directors remain confident in the continued growth and profitability of the group.

R.M. Hill 16/02/2005 Chairman

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