Good morning, and welcome to the Annual General Meeting of Michael Hill International Limited. I'm Rob Fyfe, Chair of the Board of Directors, and it's my pleasure to chair today's meeting. Our company secretary has confirmed that a quorum is present, so I formally declare the meeting properly constituted and open for business. Before I get into the housekeeping matters, I'd like to welcome my fellow board members who are here virtually at this meeting. Firstly, our company's founder, Sir Michael Hill. Also, Gary Smith, Chair of our Audit and Risk Management Committee, Jacquie Naylor, and Emma Hill, Chair of our People Development and Remuneration Committee. Finally, I'd welcome Daniel Bracken, who joined the board earlier this year as Managing Director, in addition to his position as Michael Hill's CEO since November 2018.
Today, we're also joined by CFO and Company Secretary, Andrew Lowe, who will address this meeting. Kellie McKenzie, lead external audit partner from Ernst & Young, is also present to address any questions on our financial reports. Now on to housekeeping. I invite you to take full advantage of the technology that we're using today. The platform allows shareholders and proxies to ask questions and submit votes in real time. To that end, if you do have any questions or comments on any item of business, then this year you are able to do so in either of two ways. In writing at any time, or verbally during the dedicated question time following the presentations. If you wish to ask a verbal question, you must pause the broadcast on the online platform and then click on the link under Asking Audio Questions.
Detailed instructions on how to do so are on the screen. A new page will open where you will be prompted to enter your name and question topic before being connected. You will then listen to the meeting on this page while waiting to ask your question. If you have any issues using the system, please return to the online platform and consider asking your question in writing. You can also submit a written question at any time, and instructions on how to do that are on the screen. We will address your questions and comments after Daniel, Andrew, and I have presented. If we do not get to your question for whatever reason during the meeting, we will follow up directly with you. Voting today will be conducted by way of a poll on all items of business. Instructions on how to vote are on the screen.
In order to provide you with enough time to vote, I now declare voting open on all items of business. The polling icon will soon appear. Please submit your votes at any time, and I will give you warning before I move to close voting in the latter part of the meeting. If we experience technical issues that result in a number of shareholders being unable to reasonably participate, I will adjourn the meeting and it will be reconvened at a later time. If this occurs, we will lodge an ASX and NZX release after the adjournment that sets out the details and next steps. Today, I'd like to give you an overview of how we view the year that's just closed.
Following that, Daniel and Andrew will give more detail on our 2021 results, our current and future focus, and a trading update for the first quarter of the current financial year. I'm immensely proud of what the Michael Hill team has delivered over the last 12 months. From the outset, we were determined that the disruption and uncertainty caused by the pandemic raging around the globe would not distract us from our transformation agenda and the great progress being made to position Michael Hill as a high-performing, modern, and differentiated omnichannel jeweler. The results speak for themselves. A record net profit result for the group, strong balance sheet and cash position, reduced inventory levels, increased sales of branded collections, increased stock turn, substantial growth in membership of our loyalty program, continued strong growth in our digital presence, and effective collaboration of our digital, social, and physical channels.
Daniel will talk more to these achievements during his address. It's clear that the impact of COVID-19 is not set to abate anytime soon, and the agility, adaptability, resilience, and perseverance of the Michael Hill team, which enabled such a strong performance over the last 12 months, will continue to drive our strategic and operational momentum into 2022 and beyond. The pandemic continues to bring uncertainty, sporadic lockdowns, and it imposes restrictions on how we go about our daily lives, and that has impacted on all of us, including our team members. Michael Hill was proudly built with a people-focused culture, and we have spent much of our time over the past 12 months ensuring all members of our team have the best possible support to cope with the challenges and adapt to the changes imposed by the pandemic responses.
It was pleasing to see this commitment recognized with our highest-ever employee engagement score in our annual employee engagement survey. We're incredibly fortunate to have such an experienced, committed, and engaged team as we navigate these turbulent times. I'd like to take a moment to acknowledge our board. It's in moments of crisis and when under pressure that the true character of a team emerges. The Michael Hill board is comprised of a diverse group of highly collaborative, capable individuals with deep retail backgrounds and a mix of complementary skills. While we challenge each other, we have worked effectively as a team to support Daniel and his management team as we navigate through these challenging times.
We are very fortunate to have Sir Michael Hill, our Founder President, as custodian of our brand, actively contributing both at the board table and out around our network. The board and our teams in store continue to benefit enormously from his experience, insights, and constant challenge to do better. In June this year, Emma Hill decided to retire as Chair and remain as a Non-Executive Director. As an admirer of the Michael Hill brand for many decades, I was honored to be selected to succeed Emma as Chair, and I now look forward to building on the heritage that Sir Michael Hill, Emma, and the entire Hill family have contributed over the last four decades. With these changes, our CEO since 2018, Daniel Bracken, also joined the board as Managing Director.
I now look forward to working with my fellow directors and the wider Michael Hill team to ensure we continue to execute on our strategic transformation and develop and strengthen the Michael Hill brand in our chosen markets. Lastly, as shareholders, you will be interested in Michael Hill's position on dividends. The board previously stated its intention to restore dividend payments to historic levels as the pandemic recovery became more certain. After taking into consideration business performance, the strength of the balance sheet, and while also recognizing the risk of ongoing trading disruption, the board declared a financial year 2021 final dividend of AUD 0.03 per share. That final dividend complemented the interim dividend of AUD 0.015 per share paid earlier in the year and lays the foundation for a sustainable dividend profile going forward, subject to the impacts of ongoing trading disruptions.
Reflecting on the year, I'm incredibly proud of the dedication, energy, and resilience consistently demonstrated throughout the business. I'd like to thank every individual and team for their strength and determination in forging ahead and contributing to the successful year for Michael Hill. Our business is our people. I believe the company has a compelling strategy and is well-placed with a strong balance sheet and a high-performing leadership team to deliver on our growth and transformation agenda, while also exploring new business opportunities. I'd like to close my address by acknowledging and thanking all our shareholders for their continued support. I now invite Managing Director and CEO, Daniel Bracken, to address the meeting and discuss the 2021 operational performance, as well as current and future focus. Daniel, over to you.
Thank you, Rob, and good morning and thank you for joining us today. Together with Andrew, we will review the 2021 financial results and strategic and operational achievements. We will also provide you with some insights into key strategic initiatives for the year ahead and a brief update on our first quarter trading for FY 2022. First, I'd like to share with you our year in review.
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FY 2021 was indeed an outstanding year with all of our metrics up. A credit to both the execution of our strategic initiatives and the dedication and resilience of our team. The board and management team are delighted to have delivered these record financial results. These outcomes were delivered while successfully navigating significant disruption from the global pandemic. Half of our Canadian stores were closed for many, many months. Our Victorian stores were closed for more than 3 months, and multiple short, sharp temporary closures were experienced across our global network. Focused management on our key Indian supply chain meant that the pandemic impacts in India did not significantly disrupt inventory flow. Other sourcing regions across Europe and China were also relatively unimpacted. Of course, throughout the year, always at the forefront of our minds was prioritizing the ongoing health, safety, and well-being of our team members and our customers.
From a results perspective, the business delivered both strong sales growth and margin expansion in all three markets, further validating the transformation agenda is on track. We continued to focus on enhancing our digital business which pleasingly exceeded expectations in its outperformance of FY 2020 increasing by 53% and delivering yet another year of record digital sales. Our reinvigorated retail leadership demonstrated their commitment to further embedding our retail fundamentals, which saw increases in all key metrics. Average transaction value items per sale and conversion were all up. Our Brilliance by Michael Hill loyalty program went from strength to strength, now with over 900,000 members. The team also worked tirelessly to roll out additional omnichannel offerings including ship from store click and reserve and virtual selling and I'll elaborate further on our progress on these initiatives during the strategy update shortly.
It should be noted our transformation agenda touches every single aspect of our business and I couldn't be happier with how the team is working together to deliver common goals as we further strengthen and elevate the Michael Hill brand. This outstanding result is the culmination of over two years of hard work building and executing our strategy best evidenced by eight of the last nine quarters of comparative sales growth together with sustained margin expansion. Now moving onto strategy. As a reminder, our transformational initiatives are underpinned by seven strategic pillars which we are focused on delivering sales growth and margin expansion driving efficiencies across the business elevating the Michael Hill brand and enabling a true omnichannel customer experience.
The elevation of the Michael Hill brand is definitely gaining traction as it continues to evolve into a modern differentiated omnichannel jewelry brand transitioning our messaging from discount-led promotions to quality and aspirational brand-led campaigns is key to enticing a broader customer base while generating higher average transaction value and margin growth. A great example of our brand focus is our new Christmas campaign which has just been launched across all three markets.
Looking from windows above. Looks like a story of love. Can you hear me? Came back only yesterday, moving farther away, watching you. All I needed for another day. All I ever knew: only you. Sometimes when I think of you, when it's only a game. I need you. Listen to the words that you say. It's getting harder to stay.
I certainly hope that doesn't leave a dry eye in the house. I certainly get very emotional watching that wonderful piece of content. Our messaging will continue to highlight our reinvigorated Australian manufacturing division, with an emphasis on craftsmanship and local artisans. Our customer-facing messaging will be further enhanced by data and insights from our customer segmentation and personalization programs. Digital is at the forefront of our transformation, with an emphasis on customer experience, product offering, and fulfillment. Following another year of exceptional growth, investment in our highest profit margin channel continues to focus on incremental traffic, higher conversion rates, and increased transaction value. The digital business achieved record sales of NZD 35 million and is now 6.3% of total sales. During the year, we also saw the launch of our pure play demi-fine brand Medley.
Our early foray into third-party digital channels has provided the confidence to develop an integrated marketplace solution that will be rolled out in the first half of FY 2022. Looking further afield, we have identified opportunities to explore more digital channels and new markets. Our digital business is well-placed with continual growth underpinned by omnichannel offerings, coupled with an elevated focus on conversion rate optimization. To support our strategic roadmap and further advance our digital transformation, I'm delighted to announce the appointment of Keith Louie as our first ever Chief Digital Officer. Keith brings with him a wealth of retail experience, e-commerce leadership, and digital strategy to the Michael Hill business. His appointment, alongside the recent arrivals of Amy Sznicer, Chief Retail Officer, and Jo Feeney, Chief Marketing Officer, adds significant expertise to our already high caliber leadership team.
With a portfolio of 285 stores across three countries, bricks and mortar retail is at the core of the Michael Hill business. Our retail fundamental strategy is focused on driving increased sales, higher margins, lower costs, and a modern, differentiated customer experience, all underpinned by our new retail incentive scheme. In addition, roster optimization, visual excellence, and increased training continue to be areas of focus for our retail leadership team. The key retail metrics of average transaction value, items per sale, and conversion all increased in all markets in FY 2021 and will continue to be key areas of focus. The rollout of our new enterprise resource planning platform early in FY 2021 was the enabler for omnichannel at Michael Hill. Across the year, we successfully tested and trialed virtual selling, click and reserve, and ship from store.
Pleasingly, ship from store has delivered many cost and customer experience benefits. While click and reserve has contributed sizable incremental sales and in-store upselling opportunities. Having already seen the average transaction value benefits in trialing these new customer channels, these initiatives, together with in-store appointment scheduling through our digital channels, will now be progressively rolled out across our global network. Further connecting our physical and digital businesses, we have just launched click and collect in time for Christmas 2021, delivering incremental sales and an enhanced customer experience. While the Brilliance by Michael Hill loyalty program is only two years old, it has already grown to over 900,000 members. To date, member acquisition has been our priority, and while this will continue to be a key focus, the business is now turning its attention to activation and retention.
Our early insights already provide confidence that the program is resonating with our customers, delivering increased frequency, larger baskets, and higher margins. Predictive analytics and increased personalization are being enabled by an investment in data analytics capability and artificial intelligence to deliver further growth in our business. Product evolution is the foundation of any customer-led retail strategy, and it is critical to continued sales and margin growth. The business will maintain its focus on regular product newness and uniquely Michael Hill branded product as a key differentiator in the categories and markets in which we operate. The business now delivers regular product newness to excite our customers and increase sales with significantly lower inventory and higher margins. Our Australian manufacturing division has been reinvigorated, delivering new bridal collections and increased speed to market, underpinned by a focus on craftsmanship, quality, and innovation, while still achieving improving margins.
Our entry into the laboratory-grown diamond category continues to gain momentum and deliver significant margin growth. The recent relaunch of our most prestigious bridal range, the Sir Michael Hill Designer Bridal Collection, is already showing fantastic results. As we place a greater emphasis on sustainability of our products, we look forward to providing further targeted messaging and insights in the coming months. On to our last strategic pillar. The company's significantly improved net cash and targeted inventory position at year-end demonstrates that a cost-conscious culture exists across every aspect of the company. We continue to optimize the global supply chain, improve the global store network, and enhance our credit propositions globally. Additionally, the new Canadian 3PL facility will be fully operational for peak Christmas trade, servicing both online customers and stores, optimizing inventory, reducing logistics costs, and enhancing overall Canadian productivity and customer experience.
Despite the current trading disruptions, we entered FY 2022 with a strong financial position, providing a stable platform to continue our transformation journey, elevate the brand, and further explore new growth opportunities across all channels and markets. I will now pass over to Andrew to review our FY 2021 financial results, and following Andrew's presentation, I will come back and provide a brief update of our first quarter performance. Andrew?
Thank you, Daniel. As Daniel mentioned, given the disruptive trading conditions, we're particularly proud of our full-year results. We previously announced a record statutory net profit after tax of AUD 45.3 million for the year. Statutory earnings before interest and tax of AUD 72.4 million represents a significant EBIT increase of AUD 58.3 million on prior year, largely driven by improved sales and margin, delivering a 50.7 million dollar lift in gross profit to AUD 348.9 million. Despite the combined impact of over 10,000 lost store trading days as a result of government-mandated lockdowns and some permanent store closures, the company still saw revenue growth in all markets.
Total revenue was up by 13.1% to AUD 556.5 million as the company continues to elevate and modernize the brand and transform the customer journey. The company strengthened its balance sheet with a year-end net cash position of AUD 72.4 million, prior year, AUD 0.5 million and nil debt. During the year, the company also entered into a new financing facility jointly funded by ANZ and HSBC. This new AUD 70 million facility is currently undrawn with a term to February 2024. Furthermore, the company has strategically reviewed its in-house Canadian credit program to de-risk the balance sheet, with the new credit provider having been rolled out in Canada earlier this month.
Through focused management by our merchandise team, the company optimized inventory levels to within the targeted range, with a holding of NZD 171.2 million at year-end, a reduction of NZD 7.5 million compared to last year. We continue our unwavering focus on costs right across the business, from logistics and repairs to credit arrangements, labor and leasing. This focus has assisted not just to earnings, but also cash flow and working capital. The company continued to actively manage its global store network and landlord relationships. During the year, the company opened one new store in Canada and closed six underperforming stores, resulting in 285 stores at year-end. Turning to capital management, the board has previously stated its intention to restore dividend payments to historic levels as the pandemic recovery becomes more certain.
After taking into consideration sales and margin performance, the strength of the balance sheet, and while also recognizing the risk of ongoing trading disruption, the board declared a final dividend of AUD 0.03 per share unfranked, fully imputed with conduit foreign income. This represents total dividends for the year of AUD 0.045 per share Australian, and lays the foundation for a sustainable dividend profile going forward, subject to the impacts of ongoing trading disruptions. Turning now to key performance results. Following the FY 2020 global store network shutdown, the company delivered significant same-store sales growth across all four quarters of FY 2021. For the year, the group delivered same-store sales growth of +8.6%, with Australia up by 13%, New Zealand up by 7.1%, and Canada up by 6.8%.
Gross margin increased by 210 basis points to 62.7% for the group. These results demonstrate the initiatives underpinning the seven strategic pillars are now firmly embedded in the company. The success of our loyalty program, continued penetration of our online business, acceleration of retail fundamentals, and product evolution are initiatives which have all created a sustainable platform for sales growth and margin expansion. Setting aside the accounting impacts of the leasing standard, the one-off impact of the Canadian credit book debts, the group delivered a comparable EBIT result of AUD 56.6 million for the year, well up on the prior year comparable EBIT loss of AUD 5.2 million. The company's online business exceeded expectations and significantly outperformed FY 2020, resulting in another year of record digital sales of AUD 34.8 million.
Digital sales now represent 6.3% of total sales. Website traffic increased by 35.3% against prior year, with an increased volume of customers continuing to utilize our enhanced online platform. The company continues to prioritize product evolution and create uniquely Michael Hill jewelry. Branded collections represented 42.1% of total sales for the year against 37.3% for the prior year. I will now hand back to Daniel to provide a new overview of FY 2022 Q1.
Thanks, Andrew. We recently announced our first quarter trading update for FY 2022 with continued strong performance despite the impact of ongoing government-mandated lockdowns. A combination of increased margins, focused cost control, digital growth, and strong same-store sales has lessened the negative impact on earnings from the imposed lockdowns and resulting store closures in all markets. Globally, same-store sales for the quarter were up an impressive 15.5%. Despite a net loss of 20% of our trading days due to imposed lockdowns and store closures, our overall store sales were only down by 10% for the quarter. In Australia, same-store sales were up 9.4% and overall store sales were down 24.9%.
For the majority of the quarter, 71 stores, nearly half of our Australian stores, were temporarily closed with a resulting loss of 5,900 store trading days. In New Zealand, same-store sales were up 17.8% and all store sales were down 13.2%. New Zealand lockdown spanned five weeks over the quarter, resulting in a loss of 1,300 store trading days. In Canada, which was broadly uninterrupted for the quarter, same-store sales were up 17.7%, and all store sales were actually up 18.8%. Lockdowns in Canada resulted in only a loss of 132 store trading days.
The successful execution of our strategic initiatives in the last financial year and their continued implementation this year, driving elevated margins and intense focus on costs and strong digital and physical sales, has underpinned margin growth of between 100 and 200 basis points in all markets and channels. The focused efforts and investment in omnichannel offerings lessened the negative earnings impact of store closures, with digital sales up 58% for the quarter against FY 2021 Q1, representing 9.4% of total sales. The same quarter last year represented 5.3% of total sales. With the implementation of our strategic initiatives for the FY 2022 year, the business is able to maximize and continue the strong performance momentum through this quarter and the all-important Christmas trading period. I will now hand back to the chair to conduct the formal business of the meeting.
Thanks, Daniel and Andrew. Just before I move to the formal business of the meeting, I would like to acknowledge the leadership of both Daniel and Andrew and the broader executive team as they've set the business, I think, on a very strong performance trajectory over the last two years, really, despite the very challenging market conditions. Before we move on to the formal business of the meeting, I will now take questions or comments. If you do have questions of the board or our external auditors, or you wish to make any comments on any item of business, please either submit them in writing or use the audio function now if you haven't already done so. No questions were received in advance of the meeting.
I'm now going to ask our moderator, Emily, whether any written questions or comments have been received or whether there are any shareholders waiting to speak, via the online platform. Emily?
Thank you, Chair. We have received written questions via the online platform. The first question is from Mr. Andrew Savvas Romanidis-Ott, who asks, "You use the term integrated marketplace solution. Could you please provide some color on what you mean by this term?" Thank you, Chair.
Yeah, thank you, Mr. Ott. I think I'll pass to Daniel to add some color to that question. Daniel?
Thanks, Rob. It's a great question. This is our first foray outside of Michael Hill directly operated channels in the digital space. Effectively, this is Michael Hill using a third-party marketplace. In this particular instance, it's a marketplace called The Iconic that is here in Australia and New Zealand, a premium marketplace, fashion marketplace solution across Australia and New Zealand. The difference between the way we tested that model, we initially trialed our brand and product on The Iconic in a wholesale relationship where The Iconic purchased about 50 SKUs from Michael Hill, generally at the lower price point. They manage the inventory, the pricing, the transaction, and the customer service.
We got some confidence from that early trial to build, if you like, an interface that connects our website to The Iconic website, and we're now able to surface as much or as little of our product directly off of our site onto The Iconic website. Today there's probably 150 SKUs, maybe 200 SKUs on The Iconic website. Those products that you'll see are the products from the Michael Hill website. If you transact with them on The Iconic, that effectively then flows through the Michael Hill website and supply chain at the back end and is fulfilled directly by Michael Hill. We are charged a commission, if you like, by The Iconic. It's a way for us to reach a new customer opportunity.
The Iconic has about 1.5 million customers in their database that might not know Michael Hill, and it allows us to put our brand in front of them and potentially transact with them. We're pretty excited. It's early days. We only went live about two or three weeks ago. We're still testing, we're still learning, but it's definitely something we see as a future growth opportunity for the business, both in our existing markets and potentially new markets. Thanks, Rob.
Thanks, Daniel. Back to you, Emily.
Thank you, Chair. Mr. Andrew Savvas Romanidis-Ott also asks, "Could you please explain when you say same-store sales for the last quarter were up 15.5% and all store sales were down 10% for the quarter, how this works? Are you looking at same-store sales on a daily basis, comparing sales on the days the stores are open?" Thank you, Chair.
Mr. Rob, yes, indeed, it's exactly as you described. We are looking on a daily basis, comparing stores that were open on the same day in the two reporting periods. Daniel, is there anything further you want to clarify in terms of how that calculation is made?
No, Rob, that's exactly it. The store had to be open. Any particular store had to be open on exactly the same trading date this quarter this year, and the same period last year to participate in the same-store sales calculation. The answer was in the question.
Great. Thank you. Back to you, Emily.
Thank you, Chair. We've received some comments and some questions from Alan Best and Carol Best. Alan Best and Carol Best say, "We are impressed with MHJ's supplier assessments, slavery statement, commitments to Save the Children, empowerment of women, and environmental actions over the past year. Keep up the great work." They also have said, "Great performance in a really difficult year. Thank you." Chair, Alan Best and Carol Best also ask, "Could you please clarify the figure for the total lease liabilities?" Thank you, Chair.
Thanks, Emily. Just on your acknowledgements there, Mr. and Mrs. Best, our social responsibility and corporate responsibility framework is an incredibly important area for the organization, for the board, and for me personally. I recently took up a role chairing the Leadership Advisory Group in New Zealand, advising the New Zealand government on the introduction of a Modern Slavery Act in New Zealand. Our team in Australia is very active and very engaged with like-minded retailers and other corporates looking at how we best integrate best practice into our operations in this space. There's much more we can be doing, but it's an area we're very passionate about.
In terms of the question about our lease liabilities, this has become increasingly complex space with the current accounting and financial reporting rules. I'll pass to our CFO to respond to that question. Andrew.
Thank you, Rob. Yeah. Confirming that under the new AASB 16 leases accounting standard, a combination of both the current and the non-current leases, the total lease liability is AUD 133.686 million. Thanks, Rob.
Thanks, Andrew. Back to you, Emily.
Thank you, Chair. Alan and Carol Best also ask, "We note that MHJ has opened one new store and closed six. Do the current three fairly mature markets, Australia, New Zealand, and Canada, give sufficient opportunities for future expansion?" Thank you, Chair.
Certainly from the perspective of the board, we still see significant growth opportunities within our existing markets. However, you know, the shape of that growth is different. You've seen partly driven by COVID. You know, we have seen strong growth in digital sales. As just alluded to in the answer to one of the previous questions, we've also seen a very strong same-store sales growth. We're seeing our conversion up. We're seeing our margins up. There is plenty of opportunity in the market. As we strengthen our market position, some of that comes from overall growth in the market. Some of that comes from opportunities to grow our share as well. Daniel, did you want to add there?
Thanks, Rob. I mean, I would reflect over the last sort of 24 months, you know, bar the fourth quarter of FY 2020 due to our global store network closed down. We have had, in fact nine now quarters of comp sales growth. Most of those quarters are mid- to high single-digit, or in many cases, double-digit same-store sales growth. While we might not have growth coming from new stores, in fact, if anything, we've been consolidating our store network to drive the most profitable outcomes for the business. We are demonstrating that there are significant growth levers in the business. We've sort of, as I say, had nine quarters of growth.
Those growth drivers over the last few quarters and moving forward are very much, as Rob's already highlighted, digital is absolutely at the forefront. Our focus on productivity within our retail store network, driven by higher conversion, higher average transaction value. Our loyalty program, we've been very focused on acquisition, but that is absolutely our secret weapon for growth in the future. It's not so much a secret now when we've got almost a million members. Brilliance is a key enabler for growth in the existing store network. Of course, new product initiatives like laboratory-grown diamonds. We didn't offer those 18 months ago, and that has proven incremental sales.
there's lots of things in our strategy, Rob, as you know, that are delivering growth within our existing store network, and therefore higher productivity and higher profitability as a result.
Great. Thanks, Daniel. Back to you, Emily.
Thank you, Chair. Mr. John Fieldsend has an observation rather than a question. He says, "Congratulations on the new NZ television ads, a huge improvement on the boring and somewhat old-fashioned ads shown previously. These new ones show a much more interesting and upmarket view of the company, which should add to future sales." Thank you, Chair. We have-
Maybe, just to acknowledge Mr. Fieldsend's comment there. As I mentioned earlier in my address, you know, I think Sir Michael Hill is a great custodian of the brand and the DNA of the brand, and I always look closely at his reaction to any of our new campaigns, and he was absolutely delighted and immediately acknowledged the ad you just saw as what he believes is the best ad we've ever done. I can assure you we're all very excited about how that's gonna help us drive our Christmas sales this year. Emily, back to you.
Thank you, Chair. Sai Chong Ah comments, "It is pleasing to see the company navigating the pandemic well, emerging with a strong balance sheet, disciplined cost control and working capital management, a vibrant product strategy and improved profitability. So kudos to management." Chair, would you like me to continue?
Yes, please. Yes, please, Emily. Thank you.
Mr. Sai Chong Ah also asks, "The company's total reported revenue peaked in 2018 at AUD 575 million and has, at best, been going sideways since 2016. The loss of top-line growth momentum and, until recently, declining operating margins, coupled with the value destruction from the costly miscalculated forays into the U.S. market and the Emma & Roe brand under the previous management, have resulted in lower market valuations of the company. While margins have shown good signs of a turnaround, sales growth would need to be addressed in order for the company to be re-rated. There are two questions relating to this that I hope management can shed some light on. One, what is the organic growth potential in the current business as a whole with regard to the markets it operates in? An indication of some numbers would be good. For example, 2% per annum.
Two, are there any plans to pursue new opportunities through geographical expansion, acquisition or otherwise, to underpin the next level of profitable growth? Thank you, Chair.
Thanks, Emily. Just before I pass to Daniel to shed some color on this question. You know, if you look at the last two years and, you know, Daniel's been with us for just coming up to three years, I think, you know, he's led a strategy that has seen really strong growth for the business. If you put the impact of COVID aside, and the best way of doing that is to look at the same-store figures, and the same-store sales have been growing strongly.
Digital has been growing strongly, and it's really, if not for the impact of COVID with many lost store trading days, the top line is moving in a direction that we're very comfortable with and we think we've got a strong sales growth trajectory now for the business that, acknowledging your point, we didn't have going back three, four, five years. Daniel, maybe to talk about the growth potential you see in the business and the question around new opportunities.
Thanks, Rob. I love this question. It allows me to elaborate on all the things we're doing and the exciting opportunities ahead. The first thing I would comment on is while you know at AUD 556 million in sales we're going sideways from 2018 it is important to note we've got circa 50 less stores in our portfolio. We're doing the same sales with arguably sort of 20% less real estate and hence the same-store sales numbers being so strong over the last couple of years and hence being a more productive business is a more profitable business. In terms of organic growth a lot of the things I outlined today will continue to drive organic growth.
As I said earlier, digital is comping year on year generally at the sort of 50% growth rate. We don't have any anticipation to see that slow. All the initiatives that Amy's driving across our retail store network, we're confident with our brand elevating and our in-store execution improving, we will have comparable sales growth, sustained comparable sales growth within our store network. Overlay the loyalty program and our ability to tailor our communication in a personalized way and a targeted way to our customers. All of those initiatives give us real confidence that we will continue to have comparable sales growth in our business.
I'm not gonna be drawn today on giving a number, but I'd rather reflect on what we've done over the last sort of eight quarters, which as I said earlier, generally somewhere in the sort of mid-high single digits is the run rate we've been running at, where we've been trading. In terms of new opportunities, we certainly have our eyes on the capability now with Keith on board for us to look at our digital business in new ways, both from a new service propositions and new markets. Might we take the learnings from this first digital marketplace experience here in Australia and potentially go and test new international markets that we don't operate in today in a very capital-light way, in a very marketing-light way.
We go and partner with a platform that already exists, that already has a database. We put our product through that channel, and we test the market. If that market proves to be successful, we may well choose to then follow that with a michaelhill.com proposition in that market and follow up with digital marketing. I think we do have expansion opportunities outside of our core business. They will very much be digitally led at this point because we wanna do this in a mindful capital-light way. We believe our brand has resonance outside of the three markets we're in, and we're excited by that.
In terms of other opportunities, I think we said to the market, we're open to inquiries, and it's certainly fair to say that myself, the wider board and management are looking at various different opportunities to accelerate growth in the business. Thanks, Rob.
Thanks. Thanks, Daniel. Back to you, Emily.
Thank you, Chair. Sai Chong Ah also asks, "Could you please talk about your capital management strategy, especially if the business continues to be strongly free cash flow generative? It is interesting to note that the company has never engaged in share buyback." Thank you, Chair.
Thanks, Emily. You know, I think Daniel in part answered this question with his previous comments. We are looking for opportunities to invest in future growth, both organically and potentially outside the business. We do have a very strong balance sheet. You know, I'm very, you know, I acknowledge the work that Andrew and Daniel and the team have done, particularly with much more optimized inventory position for the business and very strong cost control. I do also acknowledge, though, that we are living in a very uncertain and volatile times as we continue to navigate this COVID pandemic and with a high degree of uncertainty as to what lies ahead.
We will be somewhat cautious and conservative, but I can assure you, we don't have plans to have a lazy balance sheet as we look to the medium term. Back to you. Thanks, Emily.
Thank you, Chair. Sai Chong Ah also asks, "Could you please share the performance of Medley Jewellery? Is it already cash flow positive? Is there a long-term strategy for this business?" Thank you, Chair.
Daniel, I'll pass that question to you. Thank you.
Thanks, Rob. Look, the Medley business is still very small. It's been live for about 9 months. We always said we wanted to use the first 12 months or so to test and learn about the business. That's absolutely what we're doing. I think it's probably too early for us to comment on financial performance and statistics for the business. We are very happy with the performance that we're seeing so far, and we're excited by where the business is heading. You know, I think it's important to note that we're focused on growing a small business to a bigger business, and as we do that, we will in time turn our attention to profitability. Thanks, Rob.
Great. Thanks, Daniel. Back to you, Emily.
Thank you, Chair. Sai Chong Ah also asks, "As a general observation, there are often some disgruntled customers on your social media platforms, often airing complaints related to bad in-store after-sales service. If persisted, it could have implications for brand loyalty over time. As the company is understandably highly sales driven, how do you manage the disincentive to the sales staff of after-sales service, which may not be as rewarding as making new sales?" Thank you, Chair.
Thanks, Emily. You know, this is a great question. Our after-sales service and our whole customer relationship management is a critical focus for the business. You know, as I mentioned earlier, we are a people business. All the value in this business is driven by the interactions of our predominantly in-store staff interacting with our customers and prospective clients. It's something we're passionate about. We've invested heavily in our loyalty program, as Daniel referred to earlier, and we're investing heavily in our sales support and customer service teams as well. You know, we're making every effort in this regard.
I'll ask Daniel just to elaborate and give you some sense of the importance this has in his key performance set.
Thanks, Rob. I mean, I think I'd add that everything you said is totally right, Rob, as you know. I'd also add that we have launched a new incentive scheme to our stores. The old one was very sales driven. That's no longer the case. It's very, in fact, very sales and individual driven. It's now a balanced scorecard that does include customer satisfaction as one of the metrics in that scorecard. We are working to get the right balance of culture within the sales and aftercare program, if you like, within the store teams. As Rob's already alluded to, we're continuing to invest in our customer service program and platform.
In fact, we've significantly ramped up both the volume of people, but the capability in that part of our business. A significant focus of Keith's in that area will be on the post-sales, the after-sales program as we move forward. I think the final point I'd add is we're making a huge investment in data. We're rolling out what we're calling our customer data platform. That platform will enable us to understand clearly through one set of metrics how we're performing with every single customer that buys at Michael Hill. That same data will be used in store. It'll be used for marketing. It'll be used in our digital team.
It'll be used in our Brilliance program to make sure that we've got much more consistency and understanding, and eventually provide us a single customer view that will absolutely elevate all of that feedback that you just commented on. We know there's work to do, but we've got a lot of initiatives in place to improve that.
Great. Thanks, Daniel, and back to you, Emily.
Chair, Mr. Andrew Savvas Romanidis-Ott has a comment. He says, "I would like to congratulate and thank the board, management, and all staff for an impressive past financial year and what looks like a good year ahead, given all the initiatives in train." Thank you, Chair.
Great. Thanks, Mr. Ott. That comment's very much appreciated. Emily, is that the final comment?
Yes, Chair. I confirm there are no further questions received and no shareholders waiting in the queue.
Fantastic. Thank you. We'll now move to the formal items of business of the meeting as set out in the notice of meeting. The notice of meeting including the explanatory memorandum was sent to all shareholders. I propose that the notice of meeting be taken as read. You may find a copy of the notice online on the Investor Centre website. Voting on all resolutions will remain open until all items of business have been put to the meeting. The first item of business is to consider the 2021 audited financial statements, directors' report, and auditors' report. These reports are contained in the company's 2021 annual report, which has been released and distributed to shareholders prior to this meeting. You may also find a copy of the annual report online on the Investor Centre website. There is no resolution on this item.
I now confirm the 2021 audited financial statements, directors' report, and auditors' report are now received. We will now move to the next item of business. It's a non-binding resolution to adopt the 2021 remuneration report. Please note that the vote of this resolution is advisory only. Voting exclusions apply to this resolution as set out in the notice of meeting. Direct and proxy votes received in respect of this resolution are shown on the presentation slide on your screen. Open proxies appointing the chair shall be voted for the resolution. The next item of business is the reelection of board-endorsed directors, Sir Michael Hill and Emma Hill. Sir Michael is retiring from the board in accordance with the ASX Listing Rules and the company's constitution, and being eligible offers himself for reelection as a director of the company.
Sir Michael's experience and details are set out in the explanatory memorandum which accompanied the notice of meeting. Each of the directors, with Sir Michael abstaining, recommends that shareholders vote in favor of Sir Michael's reelection. Direct and proxy votes received in respect of this resolution are shown on the presentation slide on your screen. Open proxies appointing the chair shall be voted for the resolution. We will now move to the proposed reelection of Emma Hill. Emma is retiring from the board in accordance with the ASX Listing Rules and the company's constitution, and being eligible, offers herself for reelection as a director of the company. Emma's experience and details are set out in the explanatory memorandum which accompanied the notice of meeting. Each of the directors, with Emma abstaining, recommends that shareholders vote in favor of Emma's reelection.
Direct and proxy votes are received as detailed on the slide. Open proxies appointing the chair shall be voted for the resolution. We now move on to the last item, the proposed grant of share rights to our Managing Director and CEO, Daniel Bracken. Full details of the proposed grant of share rights are set out in the explanatory memorandum which accompanied the notice of meeting. The purpose of this resolution is to seek your approval for Daniel to acquire share rights under Michael Hill's long-term incentive plan for FY 2022, which form part of his total remuneration package. Voting exclusions apply to this resolution, as set out in the notice of meeting. Direct and proxy votes received in respect of this resolution are shown on the presentation slide on your screen. Open proxies appointing the chair shall be voted for the resolution.
I'd like to remind shareholders who have not yet cast their votes on this and all other resolutions to do so now. Voting will close in approximately 30 seconds. Now that the formal items of business have been addressed, sorry, I would like to thank you on behalf of the board and management for attending Michael Hill's 2021 AGM, and we look forward to your continued support in the coming year. The results of this meeting will be announced on the ASX and NZX later today and will be displayed on the Investor Centre website. That concludes the official business of the meeting, and voting is now closed. I now declare the 2021 AGM closed and thank all of you for your attendance. Many thanks.