Michael Hill Jeweller, headquartered in Brisbane, Australia, has experienced an 86 percent drop in its annual profit for the financial year ending June 30, after exiting the US market and shutting 24 of its 30 Emma & Roe brand outlets. The market exit and Emma & Roe closures cost it A$34 million (US$24.85 million) during the past year.
The group’s revenue for the fiscal year rose 4.4 percent to A$575.5 million (US$420.63 million), earnings before interest and tax were down 19.5 percent at A$50.1 million (US$36.62 million), while profit plunged 85.9 percent from A$32.6 million (US$23.83 million) a year ago to A$4.6 million (US$3.36 million).
The company however, reported a 28.9 percent reduction in net debt to A$28 million (US$20.46 million) from the A$39.4 million (US$28.79 million) in fiscal 2017. The equity ratio was also reduced to 50.4 percent from 52 percent the previous year.
Chief Executive Officer, Phil Taylor commented, “The period was one of recalibration and repositioning for the Group, which included the exit of the US and Emma & Roe businesses. While the cost of exiting these businesses had a material one-off impact on the financial result, Michael Hill is a stronger and more resilient business today with a clear strategy for long-term growth.”
He added, “The Company also made significant progress on its strategy to reposition Michael Hill from a traditional retailer to a differentiated omni-channel brand. This approach is planned to differentiate the Michael Hill brand, products and experiences to create a true point of difference and to provide a platform that is designed to support growth across new channels and markets.”