COMPANY PROFILE


Michael Hill International operates Michael Hill Jeweller - an Australasian retail jewellery chain with 115 stores between Australia and New Zealand as at 31 June 2001. The Company began in 1979 when Michael Hill opened the first store in the New Zealand town of Whangarei, some 160 kilometres north of Auckland.

A unique retail jewellery formula that included dramatically different store designs, a product range devoted exclusively to jewellery and almost saturation levels of high impact advertising elevated the Company to national prominence and record sales.

The Company grew rapidly, expanding to 10 stores by 1987 - the same year it was listed on the New Zealand Stock Exchange. 1987 also saw expansion into Australia, opening the first store in August, in the Brisbane suburb of Indooroopilly.

Today the Group employs over 1200 full and part time employees in retailing, manufacturing and administration. It has approximately 2200 shareholders and is the most profitable publicly listed retail jeweller in Australia/New Zealand.

Our Corporate Objectives:

  • To provide a superior long term return for our shareholders.
  • To provide employees with secure rewarding long term employment in an environment where excellence is encouraged.

Our Vision:

  • To strive for perfection in jewellery retailing and manufacturing, and provide the highest quality, service and value to our customers.

RESULTS IN BRIEF


 

2001

2000

Trading Results

   

  • Group revenue ($000's)

181,168

181,983

  • Group surplus after tax ($000's)

10,03

9,939

    - First half

7,745

7,494

    - Second half

2,294

2,445

     

Financial Position

   

  • Total assets ($000's)

91,331

82,394

  • Total shareholders' funds ($000's)

49,568

42,587

     

Ratios

   

  • Group surplus after tax to average
   
    - Total assets

11.6%

12.7%

    - Shareholders' funds

21.8%

24.9%

  • Earnings per share

26.0¢

25.8¢

  • Shareholders' equity

54%

52%

  • Interest cover (times)

8.1

10.6

  • Current ratio

5.1:1

3.5:1

     

Number of stores 30 June

   

  • New Zealand

41

40

  • Australia

74

66

Total

115

106

     

Distribution to shareholders

   

  • Dividends - including final dividend
   
    - Per ordinary share

15.0¢

13.5¢

    - Times covered by surplus after tax

1.73

1.90

     

Issued and paid up capital

   

  • 38,558,600 Ordinary shares ($000's)

7,712

7,712

     

Share price - 30 June

$3.80

$2.85


HIGHLIGHTS OF THE YEAR

  • Group revenue up 4% to $189 million.


  • Group surplus after tax increased to $10,039,000.


  • Dividend up 11% for the year.


  • Nine new stores opened during the year.


  • An excellent 22% return on shareholders' funds.


  • Same store sales up 2.9% in New Zealand and 3.5% in Australia (GST adjusted) .


TREND STATEMENT
2001
2000
1999
1998
1997
1996
$000
$000
$000
$000
$000
$000
Group sales
$189,168
$181,983
$156,940
$141,254
$118,303
$110,060
 
Earnings
 
Surplus before taxation
15,130
15,517
13,549
11,059
8,037
8,181
Tax provision
5,091
5,578
4,775
3,867
2,883
2,865
Surplus after tax
10,039
9,939
8,774
7,192
5,154
5,316
Dividend distributions
2,518*
5,216
4,444
3,669
2,695
2,513
Retained surplus for year
7,521
4,723
4,330
3,523
2,459
2,803
Funds employed
 
Paid-up ordinary capital
7,712
7,712
7,712
7,712
7,712
7,712
Reserves and retained earnings
41,856
34,875
29,339
24,605
20,310
18,396
Shareholders’ funds
49,568
42,587
37,051
32,317
28,022
26,108
Long term debt / deferred tax
28,503
22,670
21,849
18,302
18,904
18,001
$ 78,071
$ 65,257
$ 58,900
$ 50,619
$ 46,926
$ 44,109
Utilisation of funds
 
Non current assets
22,652
19,635
14,583
13,169
13,106
13,621
Expenditure carried forward / goodwill
505
625
756
892
974
1,146
Net working capital
54,914
44,997
43,561
36,558
32,846
29,342
$ 78,071
$ 65,257
$ 58,900
$ 50,619
$ 46,926
$ 44,109
 
*Note change in accounting policy detailed in the notes to the Financial Statements.
 
CASH FLOW STATEMENT
2001
2000
1999
1998
1997
1996
$000
$000
$000
$000
$000
$000
Net profit before tax
15,130
15,517
13,549
11,059
8,037
8,181
Depreciation
4,280
4,264
2,903
2,783
2,398
2,003
Other non-cash adjustments
147
1,545
1,002
1,901
(183)
1,372
Tax paid
(7,911)
(5,718)
(4,567)
(3,786)
(3,179)
(2,303)
Dividends
(5,410)
(4,638)
(4,059)
(3,091)
(2,695)
(2,012)
Working capital increase
(3,759)
(1,394)
(10,106)
(3,455)
(4,028)
(2,175)
Capital expenditure
(8,028)
(9,161)
(4,502)
(2,652)
(2,751)
(3,750)
Other
0
0
(30)
(82)
(20)
(21)
Surplus cash pre external funds
($ 5,551)
$ 415
($ 5,810)
$ 2,677
($ 2,421)
$ 1,295
External source of funds
 
Net borrowings/(repayments)
6,250
0
3,455
(1,750)
1,152
(1,631)
Asset sales
178
146
222
238
101
241
Surplus cashflow
$ 877
$ 561
($ 2,133)
$ 1,165
($ 1,168)
($ 95)
 
STATISTICS
 
2001
2000
1999
1998
1997
1996
Earnings per share
26.03¢
25.8¢
22.8¢
18.7¢
13.4¢
13.8¢
Net tangible asset backing
$1.27
$1.09
94.6¢
82.1¢
71¢
66¢
Interest cover (times)
8.1
10.6
9.9
8.0
6.1
6.0
Net debt $000’s
$27,113
$22,051
$21,234
$16,023
$17,710
$15,890
Dividend per ordinary share
15.0¢
13.5¢
11.5¢
9.5¢
7.0¢
6.5¢
% of tax paid profit paid as dividend
25.0%†
52.3%
50.5%
51.0%
52.3%
47.1%
Working capital ratio
5.1:1
3.6:1
3.8:1
3.9:1
4.3:1
3.8:1
EBIT/Sales %
9.1%
9.4%
9.6%
8.9%
8.1%
8.9%
Return on average capital funds
21.8%
24.9%
25.3%
24%
19%
22%
Jewellery stores at year end
115
106
102
94
88
82
Exchange rate for translating Australian results
.79
.80
.84
.83
.91
.87
 
†Note change in accounting policy relating to providing for final dividend.
 
 

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