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Dear Shareholders,
It has been a very satisfactory year with profit up 30.2% to $15,060,000 and if you adjust for last years one off sale of our Australian Head Office building, it would be 47%, giving our shareholders a 28% return on average shareholders funds for the year and an enviable 24.3% average return after tax for the last six years.
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Our main goals for the year were to achieve group revenue of $247 million, an after tax operating profit million, an after tax operating profitof $12.8 million and to continue the trialof $12.8 million and to continue the trialof the Michael Hill brand into Canada. We comfortably achieved both the revenue and profit targets,and our Canadian expansion looks very encouraging.
Our main goals for the year were to achieve group revenue of $247 million, an after tax operating profit of $12.8 million and to continue the trial of the Michael Hill brand into Canada. We comfortably achieved both the revenue and profit targets,and our Canadian expansion looks very encouraging.
his last year we have made major changes in our structure so that in the future we will support large numbers of stores without disruption.Many of the ways we did business needed to be strengthened and simplified. It was not efficient to have two support centres and we have therefore dramatically downsized the Whangarei office.Manufacturing in Whangarei will still continue.By pulling together teams that in the past have worked apart we have increased our efficiencies and communication.The economic improvement in these moves will become apparent in future results.
Canada was our other big focus as we needed the 4 stores initially opened to work. We have high expectations and were not prepared to open more stores until we were assured these stores would be profitable.With same store sales up 45%, we are confident now with the future and will open a further 4 stores in this current financial year. I get the same vibes as when we opened our first 4 stores in Australia where we now have 93 stores. Canada has as many opportunities for us as Australia.
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With endless opportunities ahead,the future and our vision is clear. We must keep the formula simple, stick with what we know and do best and not deviate from controlled profitable growth. THE FUTURE PROSPECTS FOR MHI LOOK VERY EXCITING INDEED.
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The value of our company continues to grow year upon year.The share price has increased 30% to $6.00 in the 12 months ended 30 June 2004 and our dividend payout of 21 cents per share is up 23.5% on the previous year.
I would like to thank my board for their valuable contributions. We all think as a team and draw off the diverse experiences we all have to guide us forward. CEO Mike Parsell has once again performed beyond expectations. As in all great companies, we are as good as our leaders. Congratulations Mike.
The groups balance sheet is strong with an equity ratio of 46.9% (2003- 45.8%), and this provides us with a very solid platform for our future growth plans.
This year we opened 9 new stores all in Australia, bringing our total number of stores operating to 143 at 30 June 2004. In the current financial year, a further 15 new stores are targeted across the group, including the four new stores in Canada.
In summary, it has been an excellent year. Our people have again performed exceptionally well and I congratulate all our staff in Australia, New Zealand and Canada. Our Canadian pioneers deserve special mention. They have done exceptionally well in taking the Michael Hill brand into a new market for a second year and I am delighted with their achievements. In time the Michael Hill brand will be as well known in Canada as it is in Australia and New Zealand.
With endless opportunities ahead, the future and our vision is clear. We must keep the formula simple, stick with what we know and do best and not deviate from controlled profitable growth.
The future prospects for MHI look very exciting indeed.
Michael Hill
Chairman
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