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.

(Businesswire)

ENDS

© Scoop Media

 
 
 
Top Scoops Headlines

 


Cheap Grace And Climate Change: Australia And COP26

It was not for everybody, but the shock advertising tactics of the Australian comedian Dan Ilic made an appropriate point. Australia’s Prime Minister Scott Morrison, a famed coal hugger, has vacillated about whether to even go to the climate conference in Glasgow. Having himself turned the country’s prime ministerial office into an extended advertising agency, Ilic was speaking his language... More>>


Binoy Kampmark: Funeral Rites For COVID Zero
It was such a noble public health dream, even if rather hazy to begin with. Run down SARS-CoV-2. Suppress it. Crush it. Or just “flatten the curve”, which could have meant versions of all the above. This created a climate of numerical sensitivity: a few case infections here, a few cases there, would warrant immediate, sharp lockdowns, stay-at-home orders, the closure of all non-vital service outlets... More>>

Dunne Speaks: 25 Years Of MMP - And The Government Wants To Make It Harder For Small Parties
This week marks the 25th anniversary of the New Zealand’s first MMP election. Over the last quarter century, the MMP electoral system has led to our Parliament becoming more socially and ethnically diverse, more gender balanced, and to a wider spread of political opinion gaining representation. Or, as one of my former colleagues observed somewhat ruefully at the time, Parliament starting to look a little more like the rest of New Zealand... More>>


Dunne Speaks: Labour's High Water Mark
If I were still a member of the Labour Party I would be feeling a little concerned after this week’s Colmar Brunton public opinion poll. Not because the poll suggested Labour is going to lose office any time soon – it did not – nor because it showed other parties doing better – they are not... More>>



Our Man In Washington: Morrison’s Tour Of Deception

It was startling and even shocking. Away from the thrust and cut of domestic politics, not to mention noisy discord within his government’s ranks, Australian Prime Minister Scott Morrison could breathe a sign of relief. Perhaps no one would notice in Washington that Australia remains prehistoric in approaching climate change relative to its counterparts... More>>



Binoy Kampmark: Melbourne Quake: Shaken, Not Stirred

It began just after a news interview. Time: a quarter past nine. Morning of September 22, and yet to take a sip from the brewed Turkish coffee, its light thin surface foam inviting. The Australian city of Melbourne in its sixth lockdown, its residents fatigued and ravaged by regulations. Rising COVID-19 numbers, seemingly inexorable... More>>