Top Scoops

Book Reviews | Gordon Campbell | Scoop News | Wellington Scoop | Community Scoop | Search


Michael Hill looks for lower taxes – moves to AUS

Michael Hill looks for lower taxes – moves to Australia

By Paul McBeth

Dec. 16 – Michael Hill International Ltd., New Zealand’s largest jewellery chain, will shift its operation to Australia, gaining tax benefits as tight retail margins put its profits under pressure.

The jeweller has been moving more of its business to Australia, including its head office, over the last five years having negotiated a pricing arrangement with the Australian Taxation Office and Inland Revenue Department in 2003. The company’s Australian subsidiary, Michael Hill Franchise Pty, will buy Michael Hill Jeweller System for NZ$293 million.

The restructuring “will materially and positively affect the after-tax profits and cash flow of the group,” chairman Michael Hill said in a statement. “This fundamental shift in functions has also required the Group to review its existing international transfer pricing arrangements which are in place for taxation purposes.”

The company said retail conditions have been “very challenging” in the second quarter, with same-store sales growth stalled in Australia and weaker in New Zealand and Canada.

For the five months to Nov. 30, the company record a 7.9% increase in sales to NZ$147.7 million, driven by an 8.6% increase for its Australian stores, which account for more than two-thirds of the company’s revenue. New Zealand sales dropped 7.1% to NZ$32.5 million.

The strength of the U.S. dollar versus the Australian dollar was blamed for putting margins under pressure, and the company expects its new American business to operate at a loss in the current year.

The company expects the restructure to see an increase in net profit for the 2008/09 year by NZ$57 million, “due primarily to the recognition of future Australian taxation deductions.” It expects the tax deductions to boost profit by NZ$7.4 million every year until at least 2012/13. The restructure aims to improve efficiencies and governance structures, and it’s forecasting an increase in cash flow of NZ$4.5 million this year, with a NZ$9.5 million rise per annum over the next four years.

The jeweller’s stock rose 1.67% to 61 N.Z. cents, having dropped over 30% in the last 12 months.



© Scoop Media

Top Scoops Headlines


Any Questions: Scoop Launches New Q&A Website

It’s an easy way to find out party positions and allows you to view candidates’ answers side by side. It’s also a way for you to make your voice heard this election, and get the parties talking about the things that are important to you. More>>


Scoop HiveMind Project: Universal Basic Income - Are We Up For It?

This is an opportunity for you as one of the 4 million potential funders and recipients of a Universal Basic Income to collectively consider the issue:
1. Is UBI is a desirable policy for New Zealand; and
2. How should a UBI system work in practice. More>>


Lyndon Hood: National Announces Plan To Hit Youth With Big Mallets

The National party has announced its youth justice policy, which includes a controversial plan for recidivist serious youth offenders to be hit over the head with a comically large rubber mallet. More>>


Lyndon Hood: This ->

It's been brought to my attention that Labour's new campaign slogan is "Let's do this". A collective call to action. A mission. I myself was halfway out of the couch before I realised I wasn't sure what it was I was supposed to do. More>>


Scoop Hivemind Report: What New Zealanders Think About Affordable Housing

Ordinary citizens have had very few venues where they can debate and discuss as to what they believe has led to the crisis in affordable housing and how we might begin to address this. The HiveMind on affordable housing was about redressing the balance. More>>


New Hivemind Exploration: Opening The Election - Freshwater Quality

This is an opportunity for you as one of the 4 million guardians of our common water resources to help us find mutually agreeable solutions to the critical task of collectively managing these resources for health and sustainability. More>>