Michael Hill International Limited/Announcement

FY19H1 Financial Results

Earnings Results26 February 2019MHJConsumer Discretionary

Michael Hill International Limited
Appendix 4D
31 December 2018
Michael Hill International Limited
ABN 25 610 937 598
Appendix 4D
Results for announcement to the market
Half-year report 31 December 2018
Reporting period
Reporting period:1 July 2018 to 31 December 2018
Previous reporting period:1 July 2017 to 31 December 2017
Results for announcement to the market
$'000
Revenue from ordinary activitiesDown2.7% to315,445
Earnings before interest and taxation (EBIT)*Up88.5% to28,542
Underlying EBIT before one-off items*Down16.0% to29,576
Net profit after tax (from ordinary activities) for the period
attributable to membersUp124.6% to19,531
* EBIT and Underlying EBIT are Non-IFRS Information and are unaudited. Please refer to Non-IFRS Information
on page 6 of the Directors Report for an explanation of Non-IFRS information and a reconciliation of EBIT from
continuing operations and Underlying EBIT.
Dividends
Amount per
security
Franked
amount per
security
31 December 2018
Interim dividend (cents per share)
1
2.50-
Amount per
security
Franked
amount per
security
31 December 2017
Interim dividend (cents per share)2.50-
Final dividend (cents per share)
2
2.50-
1. The record date for determining entitlements to the interim dividend of AU 2.5 cents per share is 13 March
2019. The payment date for the interim dividend is 27 March 2019. The dividend will be unfranked and fully
imputed. In addition, the dividend will be declared as conduit foreign income, therefore no Australian withholding
tax will be deducted from the dividend payment to Michael Hill International Limited's foreign shareholders.
2. Final dividend of AU 2.5 cents per share for the year ended 30 June 2018 was declared on 24 August 2018.
There is no dividend reinvestment plan in operation for Michael Hill International Limited.
For commentary on the above figures, please refer to the Directors' Report.

Michael Hill International Limited
Appendix 4D
31 December 2018
(continued)
Net tangible assets
31 Dec
2018
31 Dec
2017
Net tangible asset backing per ordinary security
$0.49
$0.49
This report should be read in conjunction with the annual report for the year ended 30 June 2018 and any public
announcements made by Michael Hill International Limited in accordance with the continuous disclosure
requirements arising under theCorporations Act 2001 (Cth), ASX Listing RulesandNZX Listing Rules.
E J Hill
Chair
26 February 2019
Brisbane

Michael Hill International Limited
ABN 25 610 937 598
Interim financial report - 31 December 2018
Contents
Page
Directors' report2
Auditor's Independence Declaration8
Financial statements
Consolidated statement of comprehensive income9
Consolidated statement of financial position10
Consolidated statement of changes in equity11
Consolidated statement of cash flows13
Notes to the consolidated financial statements14
Directors' declaration28
Independent auditor's review report to the shareholders29
Corporate directory31
This interim financial report does not include all the notesof the type normally included in an annual financial
report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2018
and any public announcements made by Michael Hill International Limited during the interim reporting period in
accordance with the continuous disclosure requirements oftheCorporations Act 2001 (Cth), ASX Listing Rules
andNZX Listing Rules.

DISCLAIMER
Certain statements in this announcement constitute forward-looking statements. Forward-looking statements are
statements (other than statements of historical fact) relating to future events and the anticipated or planned
financial and operational performance of Michael Hill International Limited and its related bodies corporate (the
Company). The words “targets,” “believes,” “expects,” “aims,” “intends,” “plans,” “seeks,” “will,” “may,” “might,”
“anticipates,” “would,” “could,” “should,” “continues,”“estimates” or similar expressions or the negatives thereof,
identify certain of these forward-looking statements. Other forward-looking statements can be identified in the
context in which the statements are made. Forward-looking statements include, among other things, statements
addressing matters such as the Company’s future results of operations; financial condition; working capital, cash
flows and capital expenditures; and business strategy, plans and objectives for future operations and events,
including those relating to ongoing operational and strategic reviews, expansion into new markets, future product
launches, points of sale and production facilities.
Although the Company believes that the expectations reflected in these forward-looking statements are
reasonable, such forward-looking statements involve known and unknown risks, uncertainties and other
important factors that could cause the Company’s actual results, performance, operations or achievements or
industry results, to differ materially from any future results, performance, operations or achievements expressed
or implied by such forward-looking statements.
Such risks, uncertainties and other important factors include, among others: global and local economic
conditions; changes in market trends and end-consumer preferences; fluctuations in the prices of raw materials,
currency exchange rates, and interest rates; the Company’splans or objectives for future operations or products,
including the ability to introduce new jewellery and non-jewellery products; the ability to expand in existing and
new markets and risks associated with doing business globally and, in particular, in emerging markets;
competition from local, national and international companies in the markets in which the Company operates; the
protection and strengthening of the Company’s intellectual property rights, including patents and trademarks; the
future adequacy of the Company’s current warehousing, logistics and information technology operations;
changes in laws and regulations or any interpretation thereof, applicable to the Company’s business; increases to
the Company’s effective tax rate or other harm to the Company’s business as a result of governmental review of
the Company’s transfer pricing policies, conflicting taxation claims or changes in tax laws; and other factors
referenced to in this presentation.
Should one or more of these risks or uncertainties materialise, or should any underlying assumptions prove to be
incorrect, the Company’s actual financial condition, cashflows or results of operations could differ materially from
that described herein as anticipated, believed, estimatedor expected.
The Company does not intend, and do not assume any obligation, to update any forward-looking statements
contained herein, except as may be required by law. All subsequent written and oral forward-looking statements
attributable to us or to persons acting on the Company’s behalf are expressly qualified in their entirety by the
cautionary statements referred to above and contained elsewhere in this announcement.

Michael Hill International Limited
Directors' report
31 December 2018
The Directors present their report on the consolidated entity (referred to hereafter as the 'Group') consisting of
Michael Hill International Limited ACN 610 937 598 (‘Michael Hill International’ or the ‘Company’) and all
controlled subsidiaries for the half-year ended 31 December 2018.
Directors
The following persons were Directors of Michael Hill International Limited during the whole of the financial period
and up to the date of this report:
E J Hill
Sir R M Hill
G W Smith
R I Fyfe
J S Allis
Principal activities
The Group operates predominately in the retail sale of jewellery and related services in Australia, New Zealand
and Canada.
Significant changes in the nature of the Group's activitiesduring the half-year to 31 December 2018 have been
noted below.
Significant changes in the state of affairs
During the previous financial year the Group exited its lossmaking retail operations in the US and significantly
completed the exit of the Emma & Roe brand. Assets in both segments were impaired as appropriate during the
prior reporting period. All US stores were closed in the prior financial year. Of the six remaining Emma & Roe
stores at 30 June 2018, four stores were closed during the half-year to 31 December 2018. The closure
programme for the final two Emma & Roe stores is still in progress. Impaired assets on hand relating to the
Emma & Roe closures will be disposed of when it is determined they will not be redeployed.
There have been no other significant changes in the nature ofthe Group's activities during the half-year to 31
December 2018.
Review of operations
Key financial results
• Statutory net profit after tax increased by 125% to $19.5m (FY18H1: $8.7m)
• Statutory earnings before interest and tax increased by 88% to $28.5m (FY18H1: $15.1m)
• Underlying earnings before interest and tax declined by 16% to $29.6m (FY18H1: $35.2m)
• Group operating revenue declined by 2.7% for the half
• Gross margin stable at 62.6% (FY18H1: 62.7%), despite FX headwinds impacting cost of goods
• Same store sales declined by 6.1% for the half reflecting animprovement in Q2 (down 3.0% to LY) compared to
Q1 (down 11.0% to LY)
• Net debt reduction of 9.7% to $20.7m (FY18H1: $23.0m)
• Interim dividend maintained at AU 2.5 cents per share, unfranked and fully imputed with conduit foreign income
Operational performance
• e-commerce sales increased by 68.3% to $9.5m (FY18H1: $5.6m)
• Branded Collection sales increased by 11% to 20% of total sales (up from 18% of total sales for FY18)
• Implementation of cost reduction programme, delivering $5 million in annualised savings and targeting a further
$5 million in annual savings
• Six Michael Hill stores opened and three under-performingstores were closed during the period, giving a total of
311 stores trading at 31 December 2018
2

Michael Hill International Limited
Directors' report
31 December 2018
(continued)
Review of operations (continued)
Key Facts
TRADING RESULTS
31 Dec
2018
$'000
31 Dec
2017
$'000
+/-%
SIX MONTHS ENDED (AU $000)
Revenue from continuing operations
315,445
324,107(2.7)%
Underlying EBIT*
29,576
35,223(16.0)%
Group profit after tax from continuing operations
19,531
30,698(36.4)%
Group gross profit
202,486
210,123(3.6)%
Group gross profit %
64.2%
64.8%(0.6)%
Dividends paid
9,679
9,686(0.1)%
* EBIT and Underlying EBIT are Non-IFRS Information and are unaudited. Please refer to Non-IFRS Information
in the Directors' Report on page 6 of this report for an explanation of Non-IFRS Information and a reconciliation of
EBIT from continuing operations and Underlying EBIT.
FINANCIAL POSITION
31 Dec
2018
$'000
31 Dec
2017
$'000
30 June
2018
$'000
Contributed equity
10,266
10,01510,266
Total equity
200,886
201,397189,221
Total assets
409,898
427,174375,348
Net debt
20,745
22,96427,993
NUMBER OF STORES
31 Dec
2018
31 Dec
2017
30 June
2018
Australia *
173
201177
New Zealand **
53
5452
Canada
85
8383
United States
-
9-
Total stores
311
347312
* Includes Emma & Roe stores: 31 Dec 2018 : 2 (31 Dec 2017 : 29)
** Includes Emma & Roe stores: 31 Dec 2018 : 0 (31 Dec 2017 : 1)
KEY MEASURES
31 Dec
2018
$'000
31 Dec
2017
$'000
30 June
2018
$'000
Share price (AU$)
0.62
1.230.97
Basic earnings per share (AUc)
5.04
2.241.19
Equity ratio (%)
49.0
47.150.4
Current ratio
2.3:1
2.3:12.6:1
3

Michael Hill International Limited
Directors' report
31 December 2018
(continued)
Review of operations (continued)
Review of operations and results
The Group reported a statutory half-year net profit after tax (NPAT) of $19.5m for the six months ending 31
December, a 125% increase from NPAT of $8.7m in FY18H1.
Statutory earnings before interest and tax increased by 88%to $28.5m, from $15.1m in the prior corresponding
period, which included prior one-off closure costs associated with the Emma & Roe and US businesses.
Underlying earnings before interest and tax (EBIT) for the period was $29.6m, with the decline of 16% largely
attributed to the trading performance during the July to October period. The Company shifted its strategy during
this four-month period to move away from discounting, whichhad a significant impact on revenue. A refined
approach to event and promotional campaigns in November andDecember saw a turnaround in performance,
with Group revenue for continued operations and same store sales increase by 2.9% and 1.1% respectively
across the two-month Christmas period.
Total Group revenue for the first-half was $315.4m (down 2.7% on prior year), as a result of weaker trade during
the first four months of the half. The Company’s e-commerce revenue increased by 68.3% to $9.5m, with online
sales now accounting for 3.0% of total Group revenue.
The Company strengthened its balance sheet by reducing net debt to $20.7m from $23.0m in the same period
last year. In line with the Company's policy to provide consistent dividends to shareholders whilst maintaining a
strong balance sheet, the Company will pay an interim dividend on 27 March 2019 of AU2.5¢ per share,
unfranked and fully imputed with conduit foreign income (maintained on FY18H1 interim: AU 2.5c per share;
FY18 final: AU 2.5c per share).
In addition to a new CEO, in January the Group also strengthened its Executive team with the appointment of a
new Chief Operating Officer, Andrea Slingsby, and Chief People Officer, Joanne Matthews. Both Executives
bring deep retail experience and skills to the Company during this critical period of transition.
The Company opened six new stores and closed three under-performing stores, to bring total Group stores to
311 at the half-year. Michael Hill management continues to manage the structured closure of the US and Emma
& Roe operations.
Australia retail segment
31 Dec
2018
AU$'000
31 Dec
2017
AU$'000
+/- %
For the six months ending
Revenue
175,507
184,953
(5.1)%
Gross profit
110,511
117,450
(5.9)%
Gross profit % of revenue
63.0%
63.5%
-0.5%
EBIT
24,630
32,569
(24.4)%
EBIT % of revenue
14.0%
17.6%
-3.6%
Number of stores
173
172
1
The Australian segment was most heavily impacted by the changes made to discounting during the first four
months. Despite improvements made during the Christmas period, total revenue for the first half declined by
5.1% to AU$175.5m, with EBIT down 24.4% to AU$24.6m. Gross profit margin was stable at 63.0%. To drive
improved performance, the Company has adjusted its management structure in Australia.
4

Michael Hill International Limited
Directors' report
31 December 2018
(continued)
Review of operations (continued)
Canada retail segment
31 Dec
2018
CA$'000
31 Dec
2017
CA$'000
+/- %
For the six months ending
Revenue
74,371
73,738
0.9%
Gross profit
45,966
45,827
0.3%
Gross profit % of revenue
61.8%
62.1%
-0.3%
EBIT
8,581
10,388
(17.4)%
EBIT % of revenue
11.5%
14.1%
-2.6%
Number of stores
85
83
2
The Canadian segment performance saw revenue growth of 0.9%to CA$74.4m, while EBIT declined from
CA$10.4m to CA$8.6m, largely attributable increased investment in the Company's workforce and higher labour
costs arising from mandatory indexation and market forces.The Company's margin in Canada remained stable at
61.8%. Canada remains a core growth opportunity for the business, and a series of measures to improve
productivity and sales are being undertaken to drive performance during the second half.
New Zealand retail segment
31 Dec
2018
NZ$'000
31 Dec
2017
NZ$'000
+/- %
For the six months ending
Revenue
65,790
69,685
(5.6)%
Gross profit
41,241
43,000
(4.1)%
Gross profit % of revenue
62.7%
61.7%
1.0%
EBIT
15,065
15,773
(4.5)%
EBIT % of revenue
22.9%
22.6%
0.3%
Number of stores
53
53
The New Zealand segment recorded revenue of NZ$65.8m, down from NZ$69.7m in the prior corresponding
period, with EBIT of NZ$15.1m, down from NZ$15.8m in FY18H1.However, gross profit margin lifted to 62.7%
for the half against the prior corresponding period.
5

Michael Hill International Limited
Directors' report
31 December 2018
(continued)
Review of operations (continued)
Key priorities for FY19H2
In August 2018, the Company announced a series of strategic shifts. Following an initial review over his first three
months, new CEO Daniel Bracken has identified refinements to the plan and further opportunities to strengthen
the retailing fundamentals of the business. These include:
• Execution in January 2019 of a cost reduction programme delivering $5 million in annualised savings
• Initiatives targeting a further $5 million in annualised cost savings
• Implementation of a more sophisticated and integrated customer-led retail operating model
• Acceleration of the Branded Collections strategy
• Opportunities to reinvigorate the company’s merchandising and inventory management end-to-end processes
• Productivity improvements in the Canadian market
• Targeted activation of scaleable digital and omni-channel strategies
• A number of initiatives to drive greater efficiencies across the global store network and supply chain
Non-IFRS Financial Information
This report contains certain non-IFRS financial measures of historical financial performance. Non-IFRS financial
measures are financial measures other than those defined orspecified under all relevant accounting standards.
The measures therefore may not be directly comparable with other companies' measures. Many of the measures
used are common practice in the industry in which MHI operates. Non-IFRS financial information should be
considered in addition to, and is not intended to be a substitute for, or more important than, IFRS measures. The
presentation of non-IFRS measures is in line with Regulatory Guide 230 issued by Australian Securities and
Investments Commission (ASIC) to promote full and clear disclosure for investors and other uses of financial
information, and minimise the possibility of those users being misled by such information.
The measures are used by management and Directors for the purpose of assessing the financial performance of
the Group and individual segments. The Directors also believe that these non-IFRS measures assist in providing
additional meaningful information on the drivers of the business, performance and trends, as well as the position
of the Group. Non-IFRS financial measures are also used to enhance the comparability of information between
reporting periods by adjusting for non-recurring or controllable factors which affect IFRS measures, to aid the
user in understanding the Group's performance. Consequently, non-IFRS measures are used by the Directors
and management for performance analysis, planning, reporting and incentive setting. These measures are not
subject to audit.
The non-IFRS measures used in describing the business performance include:
• Same store sales
• Earnings before Interest, tax, depreciation and amortisation (EBITDA)
• Earnings before Interest and tax (EBIT)
• Underlying EBIT
• One-off items
6

Michael Hill International Limited
Directors' report
31 December 2018
(continued)
(continued)
Calculation of Underlying EBIT
Underlying EBIT has been calculated as follows:
31 Dec
31 Dec
2018
2017
$000's
$000's
blank
EBIT from continuing operations28,54243,273
EBIT from discontinuing operations
-(28,127)
Statutory EBIT
28,54215,146
blank
Add back E&R and US closure costs:
Lease settlements and onerous lease provision1118,376
Impairment and asset disposals21911,442
Other items210259
blank
Add back one-off items:
CEO and Group Executive transition costs
494-
blank
Underlying EBIT
29,57635,223
Dividends
The Directors announce an interim dividend of AU2.5¢ per share (2017 - AU2.5¢), unfranked and fully imputed.
The dividend will be paid on 27 March 2019 with the record datebeing 13 March 2019. The dividend will be
declared as conduit foreign income, therefore no Australian withholding tax will be deducted from the dividend
payment to our foreign shareholders.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of theCorporations Act 2001
(Cth)is set out on page 8 and forms part of this report.
Rounding of amounts
The amounts contained in the financial report have been rounded to the nearest $1,000 (where rounding is
applicable) where noted ($000) under the option available to the Company under ASIC Corporations (Rounding
in Financial/Directors’ Reports) Instrument 2016/191.
The Company is an entity to which the legislative instrumentapplies.
This report is made on 26 February 2019 in accordance with a resolution of Directors.
E J Hill
Chair
Brisbane
26 February 2019
7

Michael Hill International Limited
Consolidated statement of comprehensive income
For the half-year 31 December 2018
Notes
31 Dec
2018
$'000
31 Dec
2017
$'000
Continuing operations
Revenue3
315,445
324,107
Other income
395
499
Cost of goods sold
(112,959)
(113,984)
Employee benefits expense
(84,313)
(81,134)
Occupancy costs
(30,340)
(28,498)
Marketing expenses
(19,205)
(19,071)
Selling expenses
(14,098)
(15,096)
Depreciation and amortisation expense
(9,650)
(9,338)
Loss on disposal of property, plant and equipment
(42)
(13)
Impairment of property, plant and equipment
(442)
(85)
Onerous lease provision
(5)
-
Other expenses
(16,211)
(14,110)
Finance expenses
(1,391)
(1,534)
Profit before income tax27,184
41,743
Income tax expense
(7,653)
(11,045)
Profit after tax from continuing operations19,531
30,698
Profit/(loss) after tax from discontinued operations10
-
(22,001)
Profit for the half-year19,531
8,697
Other comprehensive income
Item that may be reclassified subsequently to profit or loss
Gains on cash flow hedges
(154)
376
Currency translation differences arising during the year
2,004
(445)
Other comprehensive income for the half-year, net of tax
1,850
(69)
Total comprehensive income for the half-year, net of tax
21,381
8,628
Total comprehensive income for the half-year is attributable to:
Owners of Michael Hill International Limited
21,381
8,628
Blank
Total comprehensive income for the half-year attributableto owners of
Michael Hill International Limited arises from:
Continuing operations
21,381
30,629
Discontinued operations10
-
(22,001)
21,381
8,628
Cents
Cents
Earnings per share for profit from continuing operations attributable
to the ordinary equity holders of the Company:
Basic earnings per share
5.04
7.92
Diluted earnings per share
5.03
7.86
Earnings per share for profit attributable to the ordinary equity
holders of the Company:
Basic earnings per share10
5.04
2.24
Diluted earnings per share
5.03
2.23
The above consolidated statement of comprehensive income should be read in conjunction with the
accompanying notes.
9

Michael Hill International Limited
Consolidated statement of financial position
As at 31 December 2018
Notes
31 Dec
2018
$'000
31 Dec
2017
$'000
30 Jun
2018
$'000
ASSETS
Current assets
Cash and cash equivalents
7,690
18,2157,220
Trade and other receivables4
30,234
32,21225,381
Inventories
220,189
224,281192,074
Right of return assets
573
--
Derivative financial instruments4
175
-245
Other current assets
3,979
4,5313,688
Total current assets
262,840
279,239228,608
Non-current assets
Trade and other receivables4
6,526
3,5612,665
Property, plant and equipment5
66,636
70,93766,666
Deferred tax assets
58,596
60,62461,895
Intangible assets6
12,739
10,96112,626
Other non-current assets
2,561
1,8522,888
Total non-current assets
147,058
147,935146,740
Total assets
409,898
427,174375,348
LIABILITIES
Current liabilities
Trade and other payables4
77,057
74,16349,339
Derivative financial instruments4
299
764390
Current tax liabilities
2,336
8812,696
Provisions7
6,138
16,0309,386
Deferred revenue8
1,008
27,90526,476
Contract liabilities9
27,184
--
Total current liabilities
114,022
119,74388,287
Non-current liabilities
Borrowings4
28,435
41,17935,213
Provisions7
6,948
5,6714,907
Deferred revenue8
2,144
59,18457,720
Contract liabilities9
57,463
--
Total non-current liabilities
94,990
106,03497,840
Total liabilities
209,012
225,777186,127
Net assets
200,886
201,397189,221
EQUITY
Contributed equity11
10,266
10,01510,266
Reserves
3,642
4841,829
Retained profits
186,978
190,898177,126
Total equity
200,886
201,397189,221
The above consolidated statement of financial position should be read in conjunction with the accompanying
notes.
10

Michael Hill International Limited
Consolidated statement of changes in equity
For the half-year 31 December 2018
Attributable to owners of
Michael Hill International Limited
Notes
Contributed
equity
$'000
Share
based
payments
reserve
$'000
Foreign
currency
translation
reserve
$'000
Cash
flow
hedge
reserve
$'000
Retained
profits
$'000
Total
equity
$'000
Balance at 1 July 2018
10,2661,369605(145)177,126189,221
Profit for the half-year---- 19,531 19,531
Currency translation differences-- 2,004-- 2,004
Currency forward contracts--- (245)-(245)
Interest rate swaps
---91-91
Total comprehensive income for
the half-year
--2,004(154)19,53121,381
Transactions with owners in
their capacity as owners:
Dividends paid12---- (9,679) (9,679)
Option expense through share
based payments reserve-11---11
Share rights expense through
share based payments reserve
-(48)---(48)
-(37)--(9,679)(9,716)
Balance at 31 December 2018
10,2661,3322,609(299)186,978200,886

Michael Hill International Limited
Consolidated statement of changes in equity
For the half-year 31 December 2018
(continued)
Attributable to owners of
Michael Hill International Limited
Notes
Contributed
equity
$'000
Share
based
payments
reserve
$'000
Foreign
currency
translation
reserve
$'000
Cash
flow
hedge
reserve
$'000
Retained
profits
$'000
Total
equity
$'000
Balance at 1 July 2017
10,0151,136285(1,140)191,887202,183
Profit for the half-year----8,6978,697
Currency translation differences--(445)--(445)
Currency forward contracts---216-216
Interest rate swaps
---160-160
Total comprehensive income for
the half-year
--(445)3768,6978,628
Transactions with owners in
their capacity as owners:
Dividends paid12---- (9,686) (9,686)
Option expense through share
based payments reserve-23---23
Share rights expense through
share based payments reserve
-249---249
-272--(9,686)(9,414)
Balance at 31 December 2017
10,0151,408(160)(764)190,898201,397

Michael Hill International Limited
Consolidated statement of cash flows
For the half-year 31 December 2018
Notes
31 Dec
2018
$'000
31 Dec
2017
$'000
Cash flows from operating activities
Receipts from customers (inclusive of GST and sales taxes)
344,651
373,902
Payments to suppliers and employees (inclusive of GST and sales taxes)
(300,619)
(309,349)
44,032
64,553
Interest received
33
4
Other revenue
395
417
Interest paid
(1,156)
(1,501)
Income tax paid
(4,394)
(5,589)
Net GST and sales taxes paid
(14,153)
(15,629)
Net cash inflow from operating activities
24,757
42,255
Cash flows from investing activities
Proceeds from sale of property, plant and equipment
267
180
Payments for property, plant and equipment5
(6,697)
(12,555)
Payments for intangible assets
(1,286)
(3,619)
Net cash (outflow) from investing activities
(7,716)
(15,994)
Cash flows from financing activities
Proceeds from borrowings
74,500
65,000
Repayment of borrowings
(81,500)
(69,000)
Dividends paid to Company's shareholders12
(9,679)
(9,686)
Net cash (outflow) from financing activities
(16,679)
(13,686)
Net increase in cash and cash equivalents362
12,575
Cash and cash equivalents at the beginning of the financial year
7,220
5,676
Effects of exchange rate changes on cash and cash equivalents
108
(36)
Cash and cash equivalents at end of half-year
7,690
18,215
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
13

Michael Hill International Limited
Notes to the consolidated financial statements
31 December 2018
1 Basis of preparation and changes to the Group's accountingpolicies
(a) Basis of preparation
These consolidated financial statements for the half-yearreporting period ended 31 December 2018 have been
prepared in accordance with Accounting Standard AASB 134Interim Financial Reportingand theCorporations
Act 2001 (Cth).
These consolidated financial statements do not include allthe notes of the type normally included in an annual
financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30
June 2018 and any public announcements made by Michael Hill International Limited during the interim reporting
period in accordance with the continuous disclosure requirements of theCorporations Act 2001 (Cth), ASX
Listing RulesandNZX Listing Rules.
The accounting policies adopted are consistent with those of the previous financial year and corresponding
interim reporting period, unless otherwise stated.
Michael Hill International Limited (the Company) is a for profit company limited by shares, incorporated and
domiciled in Australia, whose shares are publicly traded. The Group’s principal activity is the sale of jewellery and
related services.
Due to the seasonal nature of selling jewellery and related services, higher revenues and operating profits are
usually expected in the first half of the financial year. Accordingly, inventory levels and working capital levels are
higher at the end of the first half of the financial year rather than at the end of the financial year. A comparative
half-year balance sheet has been included in the consolidated statement of financial position. This information is
provided to allow for a better understanding of the results.However, management has concluded that this is not
'highly seasonal’ in accordance with AASB 134.
These consolidated financial statements of Michael Hill International Limited and its subsidiaries (collectively, the
Group) for the six months ended 31 December 2018 were authorised for issue in accordance with a resolution of
the Directors on 26 February 2019.
(b) New and amended standards adopted by the group
A number of new or amended standards became applicable for the current reporting half-year and the Group had
to change its accounting policies as a result of adopting thefollowing standards:
• AASB 9Financial Instruments, and
• AASB 15Revenue from Contracts with Customers.
The impact of the adoption of these standards and the new accounting policies are disclosed in note 14 below.
The other standards did not have any impact on the Group's accounting policies and did not require retrospective
adjustments. Several other amendments and interpretations apply for the first time in 2018, but do not have an
impact on the interim condensed consolidated financial statements of the Group.
(c) Impact of standards issued but not yet applied by the entity
(i) AASB 16 Leases
AASB 16 was issued in January 2016. It will result in almost all leases being recognised on the statement of
financial position, as the distinction between operating and finance leases is removed. Under the new standard,
an asset (the right to use the leased item) and a financial liability for minimum payments are recognised. The only
exceptions are short-term and low-value leases.
Some of the commitments may be covered by the exception for short-term and low-value leases and some
commitments may relate to arrangements that will not qualify as leases under AASB 16.
The standard is mandatory for first interim half-years within annual reporting half-years beginning on or after 1
July 2019. The Group does not intend to adopt the standard before its effective date.
14

Michael Hill International Limited
Notes to the consolidated financial statements
31 December 2018
(continued)
1 Basis of preparation and changes to the Group's accountingpolicies (continued)
(c) Impact of standards issued but not yet applied by the entity (continued)
(i) AASB 16 Leases (continued)
The Group will use a modified retrospective adoption approach and expect to elect the package of practical
expedients, including the use of hindsight to determine thelease term. As the Group continues to evaluate this
standard and the effect on related disclosures, the primaryeffect of adoption will be to record right-of-use assets
and corresponding lease obligations for the current operating leases. The adoption is expected to have a material
impact on the Group's consolidated balance sheet, consolidated cash flow statement and statement of
comprehensive income.
Management is currently evaluating the anticipated impacton the Group's consolidated financial position and
results of operations, the quantitative and qualitative factors that will impact the Group as part of the adoption of
this standard, as well as any changes to its leasing strategythat may occur because of the changes to the
accounting and recognition of leases.
The ultimate impact of adopting the new standard will dependon the Group's lease portfolio as of the adoption
date and the final discount rates used.
2 Segment information
(a) Description of segments and principal activities
Management have determined the operating segments based onthe reports reviewed by the Board and
Executive Team that are used to make strategic decisions. The Board and Executive team consider, organise
and manage the business primarily from a brand perspective.For the Michael Hill brand, they also consider,
organise and manage the business from a geographic perspective, being the country of origin where the sale and
service was performed.
During the prior financial year, the Company announced the closure of the Emma & Roe brand and the Michael
Hill United States segment. These segments had been substantially closed and consequently these segments
were classified as a discontinued operation for the 2018 financial year and are therefore not presented in the
segment disclosures below. The Emma & Roe brand operations were absorbed into the Australian segment
during the 2019 financial year although they are immaterialto the segment's result.
The amounts provided to the Board and executive team in respect of total assets and liabilities are measured in a
manner consistent with the financial statements. These reports do not allocate total assets or total liabilities
based on the operations of each segment or by geographical location.
The Group's continuing operations operate in three geographical segments: Australia, New Zealand and Canada.
The corporate and other segment includes revenue and expenses that do not relate directly to the relevant
Michael Hill retail segments. These predominately relate to corporate costs and Australian based support costs,
but also include manufacturing activities, warehouse and distribution, interest and company tax. Inter-segment
pricing is at arm's length or market value.
Types of products and services
Michael Hill International Limited and its controlled entities operate predominately in the sale of jewellery and
related services. As indicated above, the Group is organised and managed globally by brand and geographic
areas.
Major customers
Michael Hill International Limited and its controlled entities sell goods and provide services to a number of
customers from which revenue is derived. There is no single customer from which the Group derives more than
10% of total consolidated revenue.
Accounting policies and inter-segment transactions
The accounting policies used by the Group in reporting segments internally are the same as those contained in
note 1 to the accounts and in the prior period.
15

Michael Hill International Limited
Notes to the consolidated financial statements
31 December 2018
(continued)
2 Segment information (continued)
(b) Segment results
for the period ending 31 December 2018
Australia
$'000
New
Zealand
$'000
Canada
$'000
Corporate
& Other
$'000
Michael
Hill
$'000
Operating revenue175,507 61,273 77,880785
315,445
Gross profit110,511 38,395 48,1545,426
202,486
Gross profit %63.0% 62.7% 61.8%-%
64.2%
EBITDA*28,873 15,354 11,739 (17,774)
38,192
Depreciation and amortisation
(4,243)(1,276)(2,837)(1,294)
(9,650)
Segment EBIT*
24,63014,0788,902(19,068)28,542
EBIT as a % of revenue14.0% 23.0% 11.4%-%
9.0%
Interest income---33
33
Finance costs
(31)(32)-(1,328)
(1,391)
Segment net profit before tax from continuing
operations
24,59914,0468,902(20,363)27,184
for the period ended 31 December 2017
Australia
$'000
New
Zealand
$'000
Canada
$'000
Corporate
& Other
$'000
Michael
Hill
$'000
Operating revenue184,953 63,787 75,224143
324,107
Gross profit117,450 39,357 46,7456,571
210,123
Gross profit %63.5% 61.7% 62.1%-%
64.8%
EBITDA*37,568 15,668 13,140 (13,765)
52,611
Depreciation and amortisation(4,104) (1,237) (2,510) (1,487)
(9,338)
EBIT from discontinued operations
(20,520)--(7,607)
(28,127)
Segment EBIT*
12,94414,43110,630(22,859)15,146
EBIT as a % of revenue7.0% 22.6% 14.1%-%
4.7%
Interest income2--2
4
Finance costs
89-(1,551)
(1,534)
Segment net profit before tax from continuing
operations
32,57914,44010,630(15,906)41,743
* EBIT and EBITDA are Non-IFRS Information and are unaudited.
Segment EBIT for the period ended 31 December 2017 includes discontinued operations (Emma & Roe brand
and the US operations).
16

Michael Hill International Limited
Notes to the consolidated financial statements
31 December 2018
(continued)
3 Revenue
The Group derives the following types of revenue:
31 Dec
2018
$'000
31 Dec
2017
$'000
From continuing operations
Revenue from sale of goods and repair services
298,269
307,514
Revenue from professional care plans
15,587
15,565
Interest and other revenue from in-house customer finance program
1,556
1,024
315,412
324,103
Interest income
33
4
Total revenue from continuing operations
315,445
324,107
31 Dec
2018
$'000
31 Dec
2017
$'000
Timing of revenue recognition
Goods transferred at a point in time
298,269
307,514
Services transferred over time
17,143
16,589
Total revenue from contracts with customers
315,412
324,103
4 Financial assets and financial liabilities
Set out below is an overview of financial assets, other than cash and short-term deposits, held by the Group as at
31 December 2018 and 30 June 2018:
31 Dec
2018
$'000
30 Jun
2018
$'000
Financial assets at amortised cost:
Trade and other receivables
36,760
28,046
Derivatives at fair value through profit or loss:
1
-
Foreign exchange forward contracts
175
245
Total current30,409
25,626
Total non current6,526
2,665
17

Michael Hill International Limited
Notes to the consolidated financial statements
31 December 2018
(continued)
4 Financial assets and financial liabilities (continued)
Set out below is an overview of financial liabilities held bythe Group as at 31 December 2018 and 30 June 2018:
31 Dec
2018
$'000
30 Jun
2018
$'000
Financial liabilities at amortised cost:
Trade and other payables
77,057
49,339
Borrowings
28,435
35,213
Derivative financial instruments through OCI:
(1)-
Interest rate swaps
299
390
Total current77,356
49,729
Total non current28,435
35,213
5 Property, plant and equipment
Acquisitions and disposals
During the six months ended 31 December 2018, the Group acquired assets with a total cost of $6,697,000 (31
December 2017 - $12,555,000). Assets with a net book value of$309,000 were disposed of during the six
months ended 31 December 2018 (31 December 2017 - $193,000),resulting in a net loss on disposal of $42,000
(31 December 2017 - $13,000 loss).
Impairment
An impairment charge of $442,000 was recognised during the six months ended 31 December 2018 reporting
period (31 December 2017: $11,480,000). Impairment for theprior year primarily related to the impairment of
assets of the discontinued Emma & Roe brand and US operationsand is included in discontinued operations in
Note 10.
6 Intangible assets
Acquisitions and disposals
During the six months ended 31 December 2018, the Group acquired assets with a total cost of $1,286,000 (31
December 2017 - $3,619,000). Assets with a net book value of $18,000 were disposed of during the six months
ended 31 December 2018 (31 December 2017 - no disposals), resulting in no net loss on disposal as the assets
were fully impaired (31 December 2017 - no loss).
Impairment
No impairment charges were recognised during the six monthsended 31 December 2018 reporting period (31
December 2017: $48,000).
18

Michael Hill International Limited
Notes to the consolidated financial statements
31 December 2018
(continued)
7 Provisions
31 Dec 2018
30 Jun 2018
Current
$'000
Non-
current
$'000
Total
$'000
Current
$'000
Non-
current
$'000
Total
$'000
Employee benefits
2,2972,2194,516
3,5552,0635,618
Warranty provision*
1,935-1,935
2,972-2,972
Make good provision
1994,7204,919
3562,8443,200
Restructuring costs
1,094-1,094
1,897-1,897
Other provisions
6139622
606-606
6,1386,94813,086
9,3864,90714,293
* The comparative balances for 30 June 2018 includes returnsprovisions that are now presented as refund
liabilities in the current year (see note 9).
8 Deferred revenue
31 Dec
2018
30 Jun
2018
Current
$'000
Non-
current
$'000
Total
$'000
Current
$'000
Non-
current
$'000
Total
$'000
Lease incentive income
1,0082,1443,152
7822,2303,012
Deferred service revenue
---
24,68655,27679,962
Deferred interest free revenue
---
1,0082141,222
1,0082,1443,152
26,47657,72084,196
9 Contract liabilities
31 Dec
2018
30 Jun
2018
Current
$'000
Non-
current
$'000
Total
$'000
Current
$'000
Non-
current
$'000
Total
$'000
Deferred service revenue
24,51256,28680,798
---
Deferred interest free revenue
1,3935821,975
---
Refund liabilities
1,279-1,279
---
Lifetime Diamond Warranty (LTDW)
-595595
---
27,18457,46384,647
---
(i) Deferred service revenue
The Group offers a professional care plan ('PCP') product which is considered deferred revenue until such time
that service has been provided. A PCP is a plan under which theGroup offers future services to customers based
on the type of plan purchased. The Group subsequently recognises the income in revenue in the statement of
comprehensive income once these services are performed.
19

Michael Hill International Limited
Notes to the consolidated financial statements
31 December 2018
(continued)
9 Contract liabilities (continued)
(ii) Deferred interest free revenue
Deferred interest free revenue is recognised on the in-house customer finance program when consideration is
deferred. It is calculated as the difference between the nominal cash and cash equivalents received from
customers and the discounted cashflows, on both interest and non-interest bearing products. Interest revenue is
brought to account over the term of the finance agreement, and the rate used for non-interest bearing products is
in line with current, comparable market rates.
(iii) Refund liabilities
Refund liabilities recognises the estimated returned sales under the Group's return policy, being 30 day change
of mind in Australia and New Zealand and 60 day change of mind in Canada. Management estimates the
returned sales based on historical sale return informationand any recent trends that may suggest future claims
could differ from historical amounts.
(iv) Lifetime Diamond Warranty (LTDW)
Lifetime Diamond Warranty (LTDW) is a warranty provided to customers with the purchase of jewellery items set
with a diamond (excluding watches). This has been deemed a service-type warranty and is calculated with
reference to the estimated value of service provided to customers and the stand-alone value of customers
obtaining the service independently. Income in relation tothe LTDW is recognised in line with the estimated
pattern of customers utilising this service-type warranty.
The Group adopted a modified retrospective method. Previously the LTDW was recognised as a provision under
AASB 137. This is presented in Other provisions in note 7.
20

Michael Hill International Limited
Notes to the consolidated financial statements
31 December 2018
(continued)
10 Discontinued operations
FINANCIAL PERFORMANCE AND CASH FLOW INFORMATION
Emma & Roe
31 Dec
2017
$'000
Revenue10,503
Expenses(15,783)
Impairment of property, plant and equipment and other assets(7,795)
Store exit costs
(7,445)
Loss before income tax
(20,520)
Income tax expense
6,134
Loss after income tax of discontinued operation
(14,386)
Net cash (outflow) from operating activities(6,886)
Net cash (outflow) from investing activities(252)
Net cash inflow from financing activities
7,038
Net decrease in cash generated
(100)
Michael Hill United States
31 Dec
2017
$'000
Revenue7,611
Expenses(10,647)
Impairment of property, plant and equipment and other assets(3,648)
Store exit costs
(931)
Loss before income tax
(7,615)
Loss after income tax of discontinued operation
(7,615)
Blank
Net cash (outflow) from operating activities(1,545)
Net cash (outflow) from investing activities(277)
Net cash inflow from financing activities
3,077
Net increase in cash generated
1,255
Cents
Earnings/(loss) per share
Basic earnings per share from discontinued operations(5.68)
Diluted earnings per share from discontinued operations(5.63)
21

Michael Hill International Limited
Notes to the consolidated financial statements
31 December 2018
(continued)
11 Contributed equity
(a) Share Capital
31 Dec
2018
Shares
30 Jun
2018
Shares
31 Dec
2018
Half-year
$'000
30 Jun
2018
Full-year
$'000
Share capital
Fully paid
387,438,513
387,438,513
10,266
10,266
(b) Movements in ordinary share capital
31 Dec
2018
Shares
30 Jun
2018
Shares
31 Dec
2018
Half-year
$'000
30 Jun
2018
Full year
$'000
Ordinary shares
Opening balance
387,438,513
387,438,513
10,266
10,015
Options expired
-
-
-
251
Closing balance
387,438,513387,438,51310,26610,266
12 Dividends
(a) Ordinary shares
31 Dec
2018
$'000
31 Dec
2017
$'000
Final dividend for the year ended 30 June 2018 of 2.5 cents (2017: AU 2.5 cents)
per fully paid share paid on 28 September 2018 (2017: 29 September 2017)
9,679
9,686
(b) Dividends not recognised at the end of the reporting period
31 Dec
2018
$'000
31 Dec
2017
$'000
In addition to the above dividends, since half-year end the Directors have
recommended the payment of an interim dividend of 2.5c centsper fully paid
ordinary share (2017 - AU 2.5 cents), unfranked and fully imputed*. The
aggregate amount of the proposed dividend expected to be paid on 27 March
2019 out of retained earnings at 31 December 2018, but not recognised as a
liability at half-year end, is
9,686
9,686
* This will be declared as conduit foreign income, thereforeno Australian withholding tax will be deducted from
the dividend payment to Michael Hill International Limited's foreign shareholders.
22

Michael Hill International Limited
Notes to the consolidated financial statements
31 December 2018
(continued)
12 Dividends (continued)
(c) Franked dividends
As the dividend recommended by the Directors since half-year end, but not recognised as a liability at half-year
end, will be unfranked, there will be no reduction in the franking account. The impact on the imputation credit
account of the dividend recommended by the Directors since half-year end, but not recognised as a liability at
half-year end, is estimated to be a reduction in the imputation credit account of NZ$4,138,000 (31 December
2017 : NZ$3,905,000). The amount of imputation credits is dependent on the NZD exchange rate at the time of
payment of the dividend.
13 Events occurring after the reporting period
There have been no significant events after the end of the reporting period that has significantly affected, or may
significantly affect, the operations of the Group, the results of those operations or the state of affairs of the Group
or economic entity in subsequent financial years.
14 Changes in accounting policies
Except as described below, the accounting policies adoptedin the preparation of the interim condensed
consolidated financial statements are consistent with those followed in the preparation of the Group’s annual
consolidated financial statements for the year ended 30 June 2018. The Group has not early adopted any other
standard, interpretation or amendment that has been issuedbut is not yet effective.
The Group applies, for the first time, AASB 15Revenue from Contracts with Customersand AASB 9Financial
Instrumentsthat require restatement of previous financial statements. As required by AASB 34, the nature and
effect of these changes are disclosed below.
Several other amendments and interpretations apply for thefirst time in 2018, but do not have an impact on the
interim condensed consolidated financial statements of the Group.
(a) AASB 9 Financial Instruments – Accounting policies applied from 1 July 2018
AASB 9 Financial Instruments replaces AASB 39 Financial Instruments: Recognition and Measurement for
annual periods beginning on or after 1 January 2018, bringing together all three aspects of the accounting for
financial instruments: classification and measurement; impairment; and hedge accounting.
The adoption of AASB 9 has not had a significant effect on the Group’s accounting policies related to financial
assets, financial liabilities and derivative financial instruments. No adjustments were required to be made to the
opening financial statement balances.
(i) Investments and other financial assets and liabilities
Except for certain trade receivables, under AASB 9, the Groupinitially measures a financial asset at its fair value.
Under AASB 9, debt financial instruments are subsequently measured at fair value through profit or loss (FVPL),
amortised cost, or fair value through other comprehensive income (FVOCI). The classification is based on two
criteria: the Group’s business model for managing the assets; and whether the instruments’ contractual cash
flows represent ‘solely payments of principal and interest’ on the principal amount outstanding (the ‘SPPI
criterion’).
During the year, the Group’s management assessed each forward exchange contract entered into and classified
these financial instruments into the appropriate AASB 9 categories.
Of the forward exchange contracts entered during the reporting period, the Group’s practice is to hold all of the
forward exchange contracts for payment of contractual cashflows. These have been measured at fair value
through profit or loss to significantly reduce a measurement inconsistency due to foreign currency movements in
trade creditors.
The accounting for the Group’s other financial assets and liabilities remains largely the same as it was under
AASB 139.
23

Michael Hill International Limited
Notes to the consolidated financial statements
31 December 2018
(continued)
14 Changes in accounting policies (continued)
(a) AASB 9 Financial Instruments – Accounting policies applied from 1 July 2018 (continued)
(i) Investments and other financial assets and liabilities(continued)
Impairment
The adoption of AASB 9 has changed the Group’s accounting forimpairment losses for financial assets by
replacing AASB 139’s incurred loss approach with a forward-looking expected credit loss (ECL) approach. AASB
9 requires the Group to record an allowance for ECLs for all loans and other debt financial assets not held at
FVPL.
ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all
the cash flows that the Group expects to receive. The shortfall is then discounted at an approximation to the
asset’s original effective interest rate.
For Trade and other receivables, the Group has applied the standard’s simplified approach and has calculated
ECLs based on lifetime expected credit losses. The Group hasestablished a provision matrix that is based on the
Group’s historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the
economic environment.
The Group considers a financial asset in default when contractual payments are not paid. However, in certain
cases, the Group may also consider a financial asset to be in default when internal or external information
indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into
account any credit enhancements held by the Group. Any financial asset remaining in default after 150 days is
written off.
The adoption of the ECL requirements of AASB 9 resulted in an immaterial change to the Group’s financial
assets. Therefore, no adjustment to Retained Earnings was required.
(ii) Derivatives and hedging
Cash flow hedges that qualify for hedge accounting
The Group applied hedge accounting prospectively. At the date of the initial application, all of the Group’s existing
hedging relationships were eligible to be treated as continuing hedging relationships. Consistent with prior
periods, the Group has continued to designate the change in fair value of the entire interest rate swap
agreements in the Group’s cash flow hedges and, as such, the adoption of the hedge accounting requirements of
AASB 9 had no significant impact on the Group’s financial statements.
(b) AASB 15 Revenue from Contracts with Customers – Impact ofadoption
The Group has adopted AASB 15Revenue from Contracts with Customersfrom 1 July 2018. AASB 15
establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It
replaced AASB 118Revenue, AASB 111Construction Contractsand related interpretations.
The Group has adopted AASB 15 using the cumulative effect method (with practical expedients), with the effect
of initially applying this standard recognised at the date of initial application (i.e. 1 July 2018). Accordingly, the
information presented for 2018 has not been restated - i.e. it is presented, as previously reported, under AASB
118, AASB 111 and related interpretations.
The Group adopted the new standard using the modified retrospective method and elected to apply that method
to all contracts not completed at the date of initial application. All contracts were completed at the date of initial
application as a result there no adjustments to retained earnings at the date of transition. The following table
summarises the impacts of adopting AASB 15 on the Group's interim statement of financial position as at 31
December 2018 and its interim statement of profit or loss andOCI for the six months then ended for each of the
line items affected. There was no material impact on the Group's interim statement of cash flows for the six
month period ended 31 December 2018.
24

Michael Hill International Limited
Notes to the consolidated financial statements
31 December 2018
(continued)
14 Changes in accounting policies (continued)
(b) AASB 15 Revenue from Contracts with Customers – Impact ofadoption (continued)
As reported Adjustments
Amounts
without
adoption of
AASB 15
31 December 2018
$'000$'000$'000
Space
ASSETS
Current assets262,840
-
262,840
Inventories220,189573220,762
Right of return assets573(573)-
Non-current assets147,058
-
147,058
Total assets409,898-409,898
x
LIABILITIES
Current liabilities114,022(171)113,851
Current tax liabilities2,336(171)2,165
Provisions6,1381,2797,417
Deferred revenue1,00825,90526,913
Contract liabilities27,184(27,184)-
Non-current liabilities94,990(595)94,395
Deferred revenue2,14456,86959,013
Contract liabilities57,463(57,463)-
Total liabilities209,012(766)207,754
x
Net assets200,886766201,652
x
EQUITY
Reserves3,64223,644
Retained profits - opening balance177,126-177,126
Retained profits - movements during the half-year9,85276410,616
Total equity200,886766201,652
As reported Adjustments
Amounts
without
adoption of
IFRS 15
For the six months ended 31 December 2018
$'000$'000$'000
Space
Revenue315,445593316,038
Profit before income tax
27,18459327,777
Income tax expense(7,653)171(7,482)
Profit from continuing operations19,53176420,295
Profit for the half-year19,53176420,295
Total comprehensive income for the half-year,
net of tax19,53176420,295
(c) AASB 15 Revenue from Contracts with Customers – Accounting policies
(i) Sale of goods - retail
Sales of goods are recognised when a Group entity delivers a product to the customer. Retail sales are usually
by cash, payment plan or credit card. The recorded revenue isthe gross amount of sale (excluding taxes),
including any fees payable for the transaction.
25

Michael Hill International Limited
Notes to the consolidated financial statements
31 December 2018
(continued)
14 Changes in accounting policies (continued)
(c) AASB 15 Revenue from Contracts with Customers – Accounting policies (continued)
(i) Sale of goods - retail (continued)
It is the Group's policy to sell its products to the end customer with a right of return. Accumulated experience is
used to estimate and provide for such returns at the time of sale, recognising a contract liability and
corresponding right of return asset.
The refund liability and corresponding return of asset was presented in the current year in line with AASB 15, with
the corresponding comparative balance presented in note 7 as Provisions.
(ii) Sale of goods – Lifetime Diamond Warranty (LTDW)
The Group offers a Lifetime Diamond Warranty (LTDW) which forms part of deferred revenue until the service is
performed or at such a time the owner or product lifetime ceases. The LTDW is a service-type warranty provided
to retail customers on diamond purchases, which provides assurance against lost, chipped or broken diamonds
during normal wear. The Group recognises the deferred income in revenue in the statement of comprehensive
income once these services are performed. An estimate is used as a basis to establish the amount of service
revenue to recognise in the consolidated statement of comprehensive income.
Since the Group has adopted using the modified retrospective method and applied the practical expedient, the
LTDW provision recognised relating to completed contractswere recognised under AASB 137 Provisions.
Therefore, no adjustments to prior period or opening balances were recognised relating to LTDW’s upon
transition.
(iii) Rendering of services - deferred service revenue
The Group offers a professional care plan ('PCP') product which is considered deferred revenue until such time
that service has been provided. A PCP is a plan under which theGroup offers future services to customers based
on the type of plan purchased. The Group subsequently recognises the income in revenue in the statement of
comprehensive income once these services are performed. Anestimate is used as a basis to establish the
amount of service revenue to recognise in the consolidated statement of comprehensive income.
This is consistent with the treatment under AASB 118.
(iv) Interest revenue from in-house customer finance program
Interest revenue is recognised on the in-house customer finance program when consideration is deferred. The
Group concluded that there is a significant financing component for those contracts where the customer elects to
pay in arrears considering the length of time between the customer’s payment. The transaction price for such
contracts is adjusted to take into consideration the significant financing component. It is calculated as the
difference between the nominal cash and cash equivalents received from customers and the discounted
cashflows, on both interest and non-interest bearing products. Interest revenue is brought to account over the
term of the finance agreement, and the rate used for non-interest bearing products is in line with current,
comparable market rates.
This is consistent with the treatment under AASB 118.
26

Michael Hill International Limited
Notes to the consolidated financial statements
31 December 2018
(continued)
15 Cash flow information
(a) Reconciliation of profit after income tax to net cash inflow from operating activities
Notes
31 Dec
2018
$'000
30 Jun
2018
$'000
Profit for the half-year
19,531
8,697
Adjustment for
Depreciation and amortisation
9,970
10,986
Impairment - property, plant and equipment
442
11,528
Non-cash employee benefits expense - share-based payments
(37)
272
Make good interest
88
-
Net loss on sale of non-current assets
42
14
Other non-cash expenses
-
34
Net exchange differences
249
442
Change in operating assets and liabilities, net of effects from purchase of
controlled entity and sale of engineering division:
(Increase) / decrease in trade and other receivables
(8,777)
(9,112)
(Increase) / decrease in inventories
(29,245)
(19,234)
(Increase) / decrease in deferred tax assets
3,244
(4,178)
(Increase) / decrease in other non current assets
322
222
(Increase) / decrease in other current assets
(300)
(563)
(Decrease) / increase in trade and other payables
26,110
26,248
(Decrease) / increase in current tax liabilities
(392)
575
(Decrease) / increase in provisions
1,447
10,359
(Decrease) / increase in deferred revenue
2,063
5,965
Net cash inflow (outflow) from operating activities
24,757
42,255
27

Michael Hill International Limited
Directors' declaration
31 December 2018
Directors' declaration
For the purposes of section 303(4) of theCorporations Act 2001 (Cth)and for all other purposes, the Directors
declare that in their opinion:
(a) the financial statements and notes set out on pages 9 to 27are in accordance with theCorporations Act
2001, including:
(i)complying with Accounting Standards, theCorporations Regulations 2001and other mandatory
professional reporting requirements, and
(ii)giving a true and fair view of the consolidated entity'sfinancial position as at 31 December 2018
and of its performance for the half-year ended on that date, and
(b) there are reasonable grounds to believe that the MichaelHill International Limited will be able to pay its
debts as and when they become due and payable.
This declaration is made on 26 February 2019 in accordance with a resolution of Directors.
E J Hill
Chair
Brisbane
26 February 2019

A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation

Ernst & Young
111 Eagle Street
Brisbane QLD 4000 Australia
GPO Box 7878 Brisbane QLD 4001
Tel: +61 7 3011 3333
Fax: +61 7 3011 3100
ey.com/au

Independent Auditor's Review Report to the Members of Michael Hill
International Limited
Report on the Half-Year Financial Report
Conclusion
We have reviewed the accompanying half-year financial report of Michael Hill International Limited (the
Company) and its subsidiaries (collectively the Group), which comprises the consolidated statement of
financial position as at 31 December 2018, the consolidated statement of comprehensive income,
consolidated statement of changes in equity and consolidated statement of cash flows for the half-year
ended on that date, notes comprising a statement of significant accounting policies and other
explanatory information, and the directors’ declaration.
Based on our review, which is not an audit, nothing has come to our attention that causes us to believe
that the half-year financial report of the Group is not in accordance with the Corporations Act 2001,
including:
a) giving a true and fair view of the consolidated financial position of the Group as at 31 December
2018 and of its consolidated financial performance for the half-year ended on that date; and
b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations
Regulations 2001.
Directors’ Responsibility for the Half-Year Financial Report
The directors of the company are responsible for the preparation of the half-year financial report that
gives a true and fair view in accordance with Australian Accounting Standards and the Corporations
Act 2001

and for such internal controls as the directors determine are necessary to enable the
preparation of the half-year financial report that is free from material misstatement, whether due to
fraud or error.
Auditor’s Responsibility
Our responsibility is to express a conclusion on the half-year financial report based on our review. We
conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410
Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state
whether, on the basis of the procedures described, anything has come to our attention that causes us
to believe that the half-year financial report is not in accordance with the Corporations Act 2001
including: giving a true and fair view of the Group’s consolidated financial position as at 31 December
2018 and its consolidated financial performance for the half-year ended on that date; and complying
with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations
2001. As the auditor of the Group, ASRE 2410 requires that we comply with the ethical requirements
relevant to the audit of the annual financial report.

A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation

A review of a half-year financial report consists of making enquiries, primarily of persons responsible
for financial and accounting matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with Australian Auditing Standards
and consequently does not enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Independence
In conducting our review, we have complied with the independence requirements of the Corporations
Act 2001.

Ernst & Young

Alison de Groot
Partner
Brisbane
26 February 2019

Michael Hill International Limited
Corporate directory
Directors
E J Hill B.Comm., M.B.A.Chair
Sir R M Hill K.N.Z.M.
G W Smith B.Comm., F.C.A., F.A.I.C.D.
R I Fyfe
J S Allis
Company Secretary
K A Hammond LLB (Hons), BA, GradDipLegPrac
Principal registered office in Australia
Metroplex on Gateway
7 Smallwood Place
Murarrie QLD 4172
Australia
Telephone +61 7 3114 3500
Fax +61 7 3399 0222
Share register
Computershare Investor Services Pty Ltd
Level 1
200 Mary Street
Brisbane QLD 4000
Investor enquiries:
1300 552 270 (within Australia)
+61 3 9415 4000 (outside Australia)
Auditor
Ernst & Young
Level 51
One One One
111 Eagle Street
Brisbane QLD 4000
Bankers
Australia and New Zealand Banking Group Limited
ANZ Banking Group (New Zealand) Limited
Bank of Montreal
Bank of America N.A.
Website
www.michaelhill.com.au
www.emmaandroe.com.au
investor.michaelhill.com
Email
inquiry@michaelhill.com.au
31

---

Michael Hill International Limited
Results for announcement to the market
Reporting Period6 months to December 2018
Previous Reporting Period12 months to June 2018
Amount (000s)Percentage change
Revenue from ordinary
activities
315,445 AUD-2.7%
Profit (loss) from ordinary
activities after tax attributable to
security holders
21,381 AUD+124.6%
Net profit (loss) attributable to
security holders
19,531 AUD+124.6%
Interim/Final DividendAmount per securityImputed amount per security
Interim0.025 AUD0.025 AUD
Record date13 March 2019
Dividend payment date27 March 2019
30 Jun 201831 Dec 2018
Net tangible assets per security
0.296 AUD0.490 AUD
Comments

Powered by TCPDF (www.tcpdf.org)
1 / 1

Half Year Results Webcast Details Corrected appendix 1 form

Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.