HLG - Hallenstein Glasson

[Beagle]

I've been looking hard at HLG - it's a stock I'd like to own but never have. My current "yes, but" is the divvy payout ratio - it appears that in the last two financial years HLG has paid more in dividends than it has earned in profits. It seems that they don't have a current need for additional capital but sooner or later either dividends will need to reduce or/and a capital raising will be required. Or am I missing something here?

Let me give you a clue. Have a look at the depreciation figure in the financial statements. Depreciation is a non cash item.
There is no need for further capital and the company appears well capable of continuing to pay 30 cps per annum in fully imputed dividends for the foreseeable future
Disc: Sleeping by the dividend food bowl.

[percy]

Let me give you a clue. Have a look at the depreciation figure in the financial statements. Depreciation is a non cash item.
There is no need for further capital and the company appears well capable of continuing to pay 30 cps per annum in fully imputed dividends for the foreseeable future
Disc: Sleeping by the dividend food bowl.

Exactly right.

[Snow Leopard]

I've been looking hard at HLG - it's a stock I'd like to own but never have. My current "yes, but" is the divvy payout ratio - it appears that in the last two financial years HLG has paid more in dividends than it has earned in profits. It seems that they don't have a current need for additional capital but sooner or later either dividends will need to reduce or/and a capital raising will be required. Or am I missing something here?

Their cash position has deteriorated to the tune of $3M5 a year average over the last 6 years and dividends paid have exceeded profit by $1M5 a year average in that same time-frame [and spending on PP&E has exceeded D&A].

At FY16 they had $14M in the bank and no borrowings.
They also had plenty of imputation credits.

So in theory they can carry on for a few years yet and then get an overdraft to carry on carrying on.

But long term the sustained lift in profits will cover the dividends .

Best Wishes
Paper Tiger

[macduffy]

Thanks all, for the various replies.

Yes, I'm aware that depreciation is a non-cash expense but I'm more concerned that their cash earnings don't, or at least, haven't covered the divvys in recent times. It's to be hoped that this situation is eventually rectified, as Tiger confidently asserts!

[Beagle]

One thing for sure is I see no chance of them increasing the dividend this year relative to last year. They did extremely well to maintain the 16.5 cent dividend in December 16 in my opinion.
Business conditions will need to have stayed robust in early 2017 for them to be maintaining last year's 13.5 cps interim dividend next month. I think they report their half yearly shortly so well know more pretty soon. P.S. on 30 March.

[JeremyALD]

I just made some online purchases with Hallensteins for the first time and I have to say it's a really good experience. Everything is easy and often on sale. I got sent a 40% off coupon and a reminder that it was expiring tonight. Made some inpulse purchases as a result. They're doing really well on that platform, I'm impressed.

[NZSilver]

Results tomorrow and a nice div likely. I'm expecting a good trading update with the wet summer we have had and director buying 90000 shares at $3.40

[brend]

What time? I didn't see any announcements on nzx

[winner69]

What time? I didn't see any announcements on nzx

From last update -


A full announcement with earnings statement including dividend declaration will be released to the market on 30 March 2017.


Knowing HLG it could be anytime

[Beagle]

https://www.nzx.com/companies/HLG/announcements/299042

Result at the top end of previous guidance $9.185m, previous guidance $9.0 - $9.2m
Fully imputed dividend of 14.5 cps, (I was only expecting 13.5 cps)
EPS exceeded dividend.
E Commerce growing strongly
Carefully measured expansion and refurbishment of stores in Australia
Good to see Glassons Australia back into profit - Lower current cross rate will help with conversion of future profits
Current winter trading 7 weeks, up 5% slightly slower sales growth than experienced in the first half.
Financials are easy to read and a pleasure to read because its such a simple well run business
Very happy to hold as an excellent dividend yield stock. (31 / 338) / 0.72 Gross dividend yield = 12.74%.
Company has a very long and highly credible history of being a very high dividend payer.
I will definitely be including this company in my Mum's investment portfolio.