In its six months trading to December, operating revenue overall was up almost 10% at $269 million and same-store sales were up 9.7% compared to the same period last year, Sir Michael Hill said in a statement to the market yesterday.
Shares in Michael Hill International remained unchanged after the announcement, trading around 90c.
The Hill family's company Durante Holding is offering 90c a share to boost its stake in the listed company from 47.6% to take a controlling interest of 50.2%, at a cost of $8.85 million.
Durante requires 9.8 million shares to be successful and has so far gained 6.1 million, since announcing the partial takeover in late August, Craigs Investment Partners broker Chris Timms said.
The share price of the jewellery chain had steadily risen since October from 70c to 90c.
"That increase in the share price is attributable to the takeover offer, as opposed to the string of positive trading results which have been released during that [four-month] period," Mr Timms said.
Forsyth Barr broker Suzanne Kinnaird is recommending shareholders do not accept the offer, as Forsyth Barr's valuation is 98c per share, and the independent Grant Samuel valuation is in a range of 98c to $1.15, she said.
She said the New Zealand and Australian profits were "better than we thought, with margins up in New Zealand and down less than we expected in Australia".
"However, the Canadian and US results are disappointing.
"Canadian profit is about half what we expected and the loss in the US is much larger than we thought. We expected more improvement after closing the eight worst-performing stores," she said.
Despite strong sales growth, it appears the losses from the US operations would still be large for some time, Ms Kinnaird said.
Sir Michael said yesterday he was "satisfied" with the six-month trading result, especially improved sales in the United States, but said that the general retail climate remained "cautious".
"Recent adverse climatic events in Australia will make the third quarter difficult in this key market," he said.
However, Sir Michael forecast a full-year earnings before interest and tax would increase about 25%, or more than $8.7 million, from the previous year's $36.24 million, to $45 million.
MHI global trading
• New Zealand: 54 outlets. Revenue up 7% to $56.1 million, while sales increased from 5.5% to 6.2%
• Australia: 144 outlets. Revenue up 6.1% to $A140.9 million, while sales increased from 3.6% to 5.7%
• Canada: 30 outlets. Revenue up 23.5% to $C20 million, while sales increased from 5.1% to15.1%
• United States: 9 outlets. Revenue was $US4 million, while sales increased by 25.4% *US operations lost $US2.1 million, compared to a $US2.88 loss last year.
