Michael Hill cuts earnings by 9.8pc on Aust storms, floods

Michael Hill. Photo / Herald on Sunday

Michael Hill International, the jewellery chain facing a partial takeover bid by the founding Hill family, expects earnings to fall by 9.8 per cent this year as natural disasters in Australia weigh on consumer demand.

The Brisbane-based company said the recent floods in Queensland and Victoria, along with the cyclone in North Queensland will damp demand for its products for the coming months.

It expects earnings before interest and tax to be $45 million in the year ending June 30, down from the January forecast of $49.9 million. Earnings were $36.24 million last year.

Michael Hill said earnings came in at $32.3 million in the six months ended December 31, the bottom end of its forecast $32 million and $34 million range given last month. The jeweller said net profit rose 7.2 per cent to $23.9 million in the period.

Last month's independent report on the Hill family's takeover bid said shareholders would be better served selling through the share market, with 90 cents a share offer below value. The Hill's Durante Holdings vehicle is looking to boost its stake to 50.2 per cent.

The shares were unchanged at 90 cents in trading yesterday, and have gained 2.3 per cent this year.