Wellington, Feb 18 NZPA - Michael Hill International's half-year profits have plunged 66 percent on the previous period, but the jeweller is reasonably pleased with the result in tough trading conditions.

Michael Hill, which has 242 shops in New Zealand, Australia, Canada and the United States, today announced an after-tax profit of $22.3m for the six months to the end of December, compared to $65.614m for the same period in 2008. However, that result included a deferred tax credit of $52.9m.

Revenue in the half increased 7.9 percent to $244.8m, same store sales were up 4.5 percent on last year and earnings before interest and tax (EBIT) of $30.3m were up 42.3 percent on last year.

Net profit before tax of $27.542m was up 53.9 percent on last year.

The company will pay shareholders 1.5 cents per share, up from 1c the year before.

Shares in the company were worth 69 cents yesterday.

"The directors are satisfied at the improved operating result especially in such difficult trading conditions. With the global economic outlook still uncertain a strong focus will remain on improving existing store performance and controlling costs," said chairman Michael Hill.

The 53 New Zealand stores increased revenue by 5.7 percent to $52.4m for the six months with EBIT of $9.4m, a 4.9 percent decrease on last year.

However, the operating surplus as a percentage of revenue dropped to 17.9 percent from 19.9 percent last year.

"Trading conditions improved slightly for the six months compared to last year, however retail sales are still difficult to make and margin continues to be under pressure," Mr Hill said.

Its 143 Australian stores increased revenue by 6.2 percent to $A132.8m ($NZ163.39m) for the six months with EBIT of $A24.414m, an increase of 5.6 percent on last year.

The operating surplus as a percentage of revenue was 18.4 percent, compared to 18.5 percent last year.

The 29 Canadian stores increased revenue 16.3 percent for the six months to $C16.2m ($NZ22.1m).

There was an operating surplus of $C150,000 compared to a surplus of $C316,000 last year.

The 17 US retail stores, which were bought in September 2008, achieved revenue of $US5.3m ($NZ6.52m) for the six months.

There was an operating loss of $US2.885m compared to a loss of $US1.035m for the previous corresponding period, which only included four months.