Jewellery retailer Michael Hill is considering a move to list the company on the Australian Securities Exchange (ASX), as the business seeks to build on improved trading performance.
“Over the past decade we have progressively migrated the majority of our key functions to Australia including the global support centre, wholesale and manufacturing divisions and executive team,” said Michael Hill CEO, Mike Parsell.
“The intellectual property in our retail systems was transferred to Australia in 2008 and in the 2014 financial year the group moved to report in Australian currency as required by international financial reporting standards”.
The move will consolidate the company’s brand within Australia said the company’s chair, Emma Hill.
“The Michael Hill brand is well recognised and supported in the Australian market and an ASX listing could therefore build on our already strong Australian presence. Our 166 Michael Hill and 10 Emma & Roe stores in Australia represent about 60 per cent of our stores globally,” Hill said.
“Around 64 per cent of the group’s earnings before interest and tax were generated by these stores in the 2015 financial year and this is likely to climb as we build the Emma and Roe brand.”
The company says an ASX listing may be a logical strategic move as it aims to build on same store sales growth of 4.8 per cent for the six months to December 31, 2015 in AUD as reported in the company’s latest trading update.
Operations within the Australian market yielded 2.6 per cent growth for the half with solid trade reported in the month of December. In New Zealand, sales rose 6.1 per cent to $67.1 million, in Canada, they were up 18 per cent to $C53.1 million and sales in the US, increased 25 per cent to $US7.4 million.
Gross margin held steady for the six months compared to the corresponding period with the opening of six new Michael Hill stores seeing 293 stores trading at the end of December.
The Emma & Roe brand achieved same store sales growth of 49.1 per cent on the same period last year which the company says “was in line” with company targets for the new business. Three new stores opened during the half year, taking the total number of stores to 11 at the end of December. The brand plans to open a further five stores before the end of the financial year.
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