Jeweller issue of $3.9M to public

Press, 11 June 1987, Page 25

Jeweller issue of $3.9M to public

Michael Hill Jeweller, Ltd, the Whangarel-based chain of jeweller shops, expects to be listed on the New Zealand Stock Exchange next month, and is offering to the public six million 20c shares at a premium of 45c a share. A prospectus for the public issue was registered yesterday. The hew company will be called Michael Hill International, Ltd, and will acquire as going concerns — with effect from June 30 — the total shareholding of Michael Hill Jeweller, Ltd, Michael HiU Retailing, Ltd, and Michael Hill Jeweller (Manufacturing), Ltd. ' Mr Michael. HiU himself will be chairman and joint managing director of the new company. The general manager, Mr Howard Bretherton, will become joint managing director. The other two directors will be the Whangarei stockbroker and accountant, Mr Wally Yovich, and the Christchurch accountant and financial advisor, Mr John Ryder.

Fourteen million ordinary shares have been reserved for allotment at par to Richard Michael Hill and associates as consideration for the shares in Michael HUI Jeweller, Ltd. The six million shares available for public subscription have been

reserved for allocation by the organising broker and other Stock Exchange members. There will be no public pool. The organising broker and underwriter is Paine Belcher, Ltd, of Auckland, with W. M. Yovich and Company, of Whangarei, acting as regional broker. The prospectus shows that the new company is being formed to expand the existing jewellery operation in New Zealand, and to commence operations in Australia.

The company has identified similarities in the jewellery industries and retail sectors of Australia and New Zealand, and believes it can improve on its New Zealand growth rate in Australia. Four outlets are to be opened in the Brisbane area in the coming year, plus a further six in other parts of Australia during the next year. It is the company’s aim to become the largest jewellery operation of its kind in Australasia. At least two more outlets are planned for New Zealand this year, and opportunities in countries besides Australia have also been identified. Company Investigations will continue.

The prospectus forecasts earnings a share of B.Bc for the year ending

June3o, 1988, and 12.5 c the following year. This translates to price earnings ratios on the 65c issue price of 7.4 and 5.3 respectively. It is the company’s intention to distribute a minimum of 40 per cent of the net profit after tax in' the form of dividends, and to pay a maiden dividend for the year ending June 30, 1988. ■ ' The group’s income for the year ending June 30, 1988 is estimated at $29,492,000, and at $47,716,000 for the succeeding year. Michael Hill Jeweller, Ltd commenced business In Whangarel in 1979, when the first shop was opened. There are now ten outlets in New Zealand, the others being in Takapuna, Newmarket, and Lynnmall in Auckland, ’■ Manukau City, Hamilton, Palmerston North, Hastings, Lower Hutt, and Christchurch.

The company established a manufacturing arm in 1983 to service the network of outlets, which enabled it to reduce costs and to capitalise on the design skills available within the company.

The offer of shares will open at 9 a.m. on Wednesday, July 1, and close at 10 a.m. the same day.