Click Here to download the 30/06/02 Preliminary Full Year Report Announcement (112KB PDF File)

Click Here to download the 30/06/02 Preliminary Full Year Report Power Point Presentation

1. Profit Announcement
   Michael Hill International has today announced a sixth consecutive record annual tax paid profit of $12.706 million for the 12 months ended 30 June 2002. (2001 - $10.039 million).

   The tax paid profit included a gain of $408,000 on the sale of the New Zealand Head Office building in August 2001.

   Excluding the abnormal profit on the sale of the building, the tax paid profit was $12.298 million which represents a 22.5% increase over the previous year, and was achieved on a 13% increase in turnover of $214.105 million (2001 - $189.168 million).

   The results for the year represent another excellent 23.9% return on average shareholders funds (2001 - 22.6%), excluding the abnormal profit.

   New Zealand Operations
   The New Zealand operating Company had an exceptional year. Revenue improved 18.0% overall with earnings before interest and tax (EBIT) up 32.6% from $7.643 million to $10.134 million. EBIT as a percentage of revenue improved from 11.2% to 12.6%.

   Same store sales increased by 13% (last year - 2.9%).

   During the course of the year, the New Zealand Company opened two new stores, one at Bayfair (Mt Maunganui), and the other at Taupo. Both stores are exceeding initial expectations.

   Total stores operating in New Zealand at 30 June 2002 were 43, including four large format stores at Albany, Mt Wellington, Rotorua and Westgate Mall in Auckland. All four stores are contributing well to the group's profits.

   Australian Operations
   The Australian company improved its revenue by 10.4% for the 12 months (in N.Z. dollars) with EBIT up 24.4% from $10.354 million to $12.879 million. This is a pleasing result given the difficult trading conditions in the first 5 months and the margin erosion during that period. The Australian company bounced back well after this slow start to post a record result for the year.

   Same store sales improved by 6.4% for the 12 months.

   In Australian dollars, sales were up 14.5% to A$109.439 million and EBIT up 29% to A$10.560 million on the previous period.

   The exchange rate used for the translation of the Australian surplus was .82 (2001 - .79).

   During the course of the year, a further five stores were opened.

   Stores were opened at Carousel in Perth in July 2001, Tamworth in NSW in September 2001, Booragoon in Perth in November 2001, Townsville in Queensland in November 2001 and Cairns Central in May 2002. Two stores were closed.

   At 30 June 2002, there were 77 stores operating in Australia, including two large format stores at Dandenong and Albury. Both these stores are operating well with their sales steadily improving.

2. Final Dividend
   The Directors are pleased to announce a final dividend of 10 cents per share (2001 - 8.5 cents per share), with full imputation credits attached.

   The total ordinary dividend payout for the year will be 17 cents per share (2001 - 15 cents) representing a 13.3% increase on last year.

   The payout for the year is equivalent to 53.3% of the tax paid profit of the group (prior to abnormals).

   Overseas shareholders will receive a supplementary dividend. The dividend will be paid on the 14th of October 2002.

3. Cash Flows / Balance Sheets
   The Group has reported net operating cash flows of $8,871,000 which are up 12.5% up on the previous year of $7,887,000.

   The Group has a very healthy balance sheet at 30th June with an equity ratio of 55% (2001 - 54%), with its working capital ratio at 5.6:1 (2001 - 5.14:1).
   This strong balance sheet provides a great platform for future growth.

4. Australian Head Office Building
   The Company has a conditional contract for the sale of its Head Office building in Brisbane. The contract is conditional on a 14 day due diligence clause. The sale price is A$4.5 million and a deposit of A$225,000 has been paid with settlement expected on 9th September. An after tax profit of A$1,069,000 will be booked in the 2002/03 financial year.
   
   
5. Canada
   In our half-year report we signalled that a full feasibility study was to be undertaken into expansion of the Group to Canada.

   We are pleased to report that a full study and business plan has been completed and the Board has taken the decision to proceed to open up a new operation in Canada.

   It is intended to open four new stores in or around Vancouver in the next financial year. The goal is to have three of these stores operational by November this year. Leases for these stores are in final negotiation.

   A small, very experienced, team of Managers from Australia and New Zealand will lead the operation into Canada. Emma Hill has been appointed General Manager for the Canadian operations, reporting to Mike Parsell.

   A small Head Office operation for Canada will be established in Vancouver.

   The plan is to open four stores each year for the next four years, with an initial funding requirement of NZ$3.3 million for the first year and a total of $NZ6.632 million over the first four years.

   The plan envisages the Canadian subsidiary to break even in the second year of operation.

   The growth potential for stores in Canada is enormous and at this stage in excess of 100 stores is a possibility over the next 10-15 years.

6. Summary
   It has been a very exciting year for the Company. Profits up 22.5% before abnormals, a 23.9% return on shareholders funds, full year dividend up 13.3% and our decision to open up in Canada.

We see the Canadian expansion as the commencement of our expansion to other countries, in coming years. This global expansion will create enormous opportunities to increase shareholder value.

Underlying all our growth strategies however will be our fundamental philosophy of controlled profitable growth.

In the coming financial year, our goal is to open a further 3 stores in New Zealand, 6 in Australia and 4 in Canada.

Our concentration, as always, will be on improving the performance of existing stores where the greatest potential for growth exists.

The future of the Company has never looked more exciting, and our decision to expand globally has been the most significant step taken by the Company since expanding to Australia in 1987.

The Directors remain confident in the continued growth and profitability of the Group.

On behalf of the Directors

M. Hill 23/08/2002
Chairman

Internet Home Page - www.michaelhill.co.nz
Email -

Click Here to download the 31/12/01 Preliminary Half Year Report Announcement (57KB PDF File)

Click Here to download the 31/12/01 Preliminary Half Year Report Power Point Presentation

1. Profit Announcement
   
   Michael Hill International has today announced a record tax paid profit of $8.712 million for the six months ended 31December 2001 (2000 - $7.745 million).

   This 12.5% increase in profit was achieved on turnover of $115.680 million (2000-$104.727 million).

   The Board is very pleased with the overall result and particularly the results of the New Zealand Company.

   New Zealand Operations
   The New Zealand Company improved its revenue by 13.9% for the six months with earnings before interest and tax (EBIT) up 22.5% at the operational level from $5.342 million in 2000 period.

   Also included in the New Zealand results is the profit on the sale of the New Zealand Head Office building. This amounted to $358,000 prior to tax.

   EBIT as a percentage of revenue rose from 14.3% to 15.4% at the operational level.

   Same store sales for the six months increased by 9.7% (2000 -1.9%).

   Two new stores were opened during the period under review. Bayfair at Mt Maunganui was opened on the 17th September 2001 and a further new store was opened at Taupo on the 15th of December. Both new stores are trading very well.

   The New Zealand Company had 43 stores operating at 31 December 2001.

   Further opportunities for additional stores are currently being investigated with another two stores likely to be opened in the next 12 months.

   Australian Operations
   The Australian company improved its revenue by 8.5% for the six month period (in N.Z. dollars) with EBIT down 10.2% to $7.111 million. In Australian dollars, the EBIT was down 5.5%.

   The main cause of this drop was an erosion of gross profit margin in the first 5 months of the financial year due to a combination of aggressive marketing and pricing in a tight economy, especially after September 11th when sales dropped off dramatically for some time. Margins have been back to normal since December.

   Same store sales were up 3.8% on last year.

   Four new stores were opened during the period, as follows:-

   Carousel in Perth opened 1 July 2001
   Tamworth in NSW opened 15 September 2001
   Booragoon in Perth opened 15 November 2001
   Townsville in Queensland opened 29 November 2001

   In total, there were 78 stores operating in Australia as at 31 December 2001.

2. Interim Dividend
   
   The Directors are pleased to announce a 7.7% increase in the interim dividend to 7.0 cents per share (2000 - 6.5 cents), with full imputation credits attached. The dividend will be paid on Monday, 25th March 2002.
   
   
3. Cash Flows / Balance Sheets
   
   The Group has reported net operating cash flows of $13.073 million for the six months (2000 - $6.645 million).

   The Groups balance sheet continues to be strong with an equity ratio of 50% as at 31/12/01 (the interim dividend has not been provided for at 31/12/01 in accordance with FRS-5), and a working capital ratio of 2.8:1 (2000 - 2.6:1).

   The Australian Company has not yet sold its Head Office building. As reported in the 2001 Annual Report, the Brisbane building is being sold in two stages. Stage one of the building is expected to realise around AUD$4.6 million, with the sale of stage two of the building in three years time to be negotiated with the purchaser. A decision has not yet been made regarding the use of these funds but increasing shareholder value is paramount in the Board's thinking.

4. The Future
   
   Our philosophy of controlled profitable growth will continue.

   With this in mind, the Board is currently investigating the expansion of the Group to Canada. A full feasibility study and business plan is to be completed by the end of May at which stage the Board will decide whether to proceed. This is a very exciting opportunity for the Group and would open up enormous growth potential for the Michael Hill Jeweller chain.

   A further two stores are to be opened in Australia prior to 30 June 2002.

   The company continues to be in very sound shape and with the growth opportunities ahead of it, the future looks very exciting.

   The Directors remain confident in the continued growth and profitability of the Group.

   
   On behalf of the Directors

   
   
   R.M. Hill 21/02/2002
   Chairman Internet Home Page - www.michaelhill.co.nz
   Email -