HLG - Hallenstein Glasson

[JeremyALD]

Thanks everyone!

I'm still quite amazed that they grew total sales yoy, with 5 weeks of in NZ in level 4 when they weren't even allowed to ship non essential goods.

[sb9]

Possibly worth noting they held back ~ 10 cps of the first half earnings, (as well as delaying it) so provided trading is okay between now and report date they might pay out all of the second half earnings, about 21 cps for a total this year of 36 cps. I think despite their extraordinary track record with a very high payout ratio they'll play it a bit safe this year and I think that's very prudent in the circumstances.

Agree, think the final divvy might be around 20c-21c to be paid out in Dec. And surely that would propel sp into $5 territory...

[Waltzing]

yes its to late to increase the holdings - to slow again yesterday morning. The forum has ramped the price already!!! Mr B, MR C are market movers!!!!

Everyone must have decided to spend there time in lock down who do not ride bikes , ON LINE SHOPPING!!!

You have a consumer lead economy in the cities.

We increased early yesterday before MR B made his announcement to 8% of the NZX trading portfolio and about 2.75% over the combined portfolios.

Now you may wonder how we track all this stuff and yes ....!

[smbunn]

On the 6th of July I postulated that if HLG were doiong as well as KMD then a 40 cents dividend for the year was on the cards which would surge the share price. Seems that they may indeed do 40 cents with two back-to-back dividends. Glad I held on to my holdings of just over 50,000 shares bought at $2.71 to $2.93 back in Feb to June 2017.

[Beagle]

Thanks everyone!

I'm still quite amazed that they grew total sales yoy, with 5 weeks of in NZ in level 4 when they weren't even allowed to ship non essential goods.
Yeah it really makes you think about how good this company really is.


Agree, think the final divvy might be around 20c-21c to be paid out in Dec. And surely that would propel sp into $5 territory...
I think I've probably been excessively conservative with my 16.5 cps final divvy assumption. If I rework my dividend valuation model on sustainable annual dividends of 35 cps going forward (which still seems fairly conservative given the company has grown a lot in recent years so one could argue the 16 year average of 31.5 cps is excessively conservative as it picks up too much really old data) then that gives 35 / 0.72 = 48.61 cps per annum gross and on a 9% expected gross yield that suggests the value is $5.40.

On an earnings basis a modest no growth PE of 11.5 on this years earnings gives 11.5 x 46.3 = $5.32.

I think I have to therefore upgrade my valuation to the mid point of those two figures = $5.36 which must be a record quick upgrade for me and of course completely unaffected by me now having a stake in these shares :D

[sb9]

Jeepers, moving like a bullet train...may be $6 is the realistic target as per Snow Leopard's view :eek2:

Low volume though so far..

[Beagle]

Jeepers, moving like a bullet train...may be $6 is the realistic target as per Snow Leopard's view :eek2:

Low volume though so far..

I sold as a capital preservation measure pre Covid earlier this year at an average of $6.00. Without the risk of Covid, I agree that it is worth at least $6 as I was a very happy holder until Covid came along. Now we're living with it for a while I don't anticipate raising my $5.36 valuation for quite some time.

No question HLG's result has stunned the market and shown incredible resilience in the face of adversity.

[Snow Leopard]

Make you mind up Beagle, using a shotgun approach to valuation is cheating. Pick a number and stick to it.

Definitely worth $6 unless it isn't and that is my final definitive word.
https://news.cgtn.com/news/78637a4e7745444e776b544e7755544f33457a4e31457a6333 566d54/img/0427a6d2c37348c7a5f2178cad114b03/0427a6d2c37348c7a5f2178cad114b03.png

[Cyclical]

Low volume though so far..

Yeah, that's the thing. If the insto's suddenly start trying to snap them up, then Snow Leopard's 6 bucks may not be a pipe dream.

[Beagle]

Make you mind up Beagle, using a shotgun approach to valuation is cheating. Pick a number and stick to it.

Definitely worth $6 unless it isn't and that is my final definitive word.
https://news.cgtn.com/news/78637a4e7745444e776b544e7755544f33457a4e31457a6333 566d54/img/0427a6d2c37348c7a5f2178cad114b03/0427a6d2c37348c7a5f2178cad114b03.png

Happy with $5.36...you can add in the 15 cents we get back in a couple of weeks if you like and we'll call it $5.51 :) Definitely worth at the very least $6 if the world can get on top of Covid with an effective vaccine. No question it was an eye popping forecast :) https://www.bing.com/images/search?view=detailV2&ccid=1r8iuO6X&id=3381E5C33346EFC7B2C993DCB1AD3F832EB12A93&thid=OIP.1r8iuO6Xzm1zIe3btffcCAHaFj&mediaurl=http%3a%2f%2f4.bp.blogspot.com%2f-BJHNsIh-nHc%2fT3D7AP2jtnI%2fAAAAAAAAFlA%2fbFfIjihgDQk%2fs1 600%2fBeagle_Tinkerbella_IMG_2014.jpg&exph=540&expw=720&q=Beagle&simid=608025652382011128&ck=C24156BEAFDF72709EEA615BD09323F9&selectedIndex=58&FORM=IRPRST&ajaxhist=0

[Waltzing]

Anything under 4.25 is a bulk buy, only there are few shares at any time instos will buy off market.

Mr B published his working and they look sound. I will stick to the report by the ACA and his numbers, no JPG, BMP, GIFs or PNG's included.

[sb9]

Bit quiet around here today after few days flurry of activity, may be sharesies crowd have got their fill and moved onto bigger things :p

[Beagle]

Bit quiet around here today after few days flurry of activity, may be sharesies crowd have got their fill and moved onto bigger things :p

Yeah we need the snow pussy back with his huge paws and tail thumping the floor and demanding its worth at least $6...or just let it go quiet and drift back towards $4 so serious investors can get a decent fill at a cheaper price :D

[sb9]

Yeah we need the snow pussy back with his huge paws and tail thumping the floor and demanding its worth at least $6...or just let it go quiet and drift back towards $4 so serious investors can get a decent fill at a cheaper price :D

Yep, wouldn't mind another bite around $4 mark or under that if it gets there especially before it goes ex-div next week.

[winner69]

If the OCR went deeply below zero won’t the NZD drop quite a lot

Might stimulate economy (RB hasn’t done that yet) good for HLG but what happens to HLG margins

[Beagle]

They seem to have coped with the volatility in the exchange rate over the last few years pretty well.

[Waltzing]

well i would be surprised in normal times if it drops to under 4 but these are not NOORRRAML. KMD surprise of the week prehaps on HLG news with good volume again. HLG volume pretty hopeless. Almost as if the market cant believe it. The market thinks is fully priced already.

[Cyclical]

If the OCR went deeply below zero won’t the NZD drop quite a lot

Might stimulate economy (RB hasn’t done that yet) good for HLG but what happens to HLG margins

Anything can happen (and probably will) between now and then I guess, but currently I'm struggling to see the need to go negative. It's going to cause a world of pain on many levels to go there. I suspect if it did, it would mainly be because our main trading partners have done so and we need to follow suit in order to keep a cap in the NZD...so relative to said trading partner's currencies, we'll be in the same position we are now.

Anyway, just in case, better keep loading up on them assets :)

[Waltzing]

Negative rates would have to be something Mr O can explain the need for in the markets and too the public. With the labour government realising its ministries arnt geared for abnormal variations in operating procedures i wonder if they are not in possum in the head light country........

[macduffy]

As Cyclical has posted, the RB would explain negative rates by claiming that not to follow the herd would strengthen the NZD to the detriment of our exports. I don't like the idea either, but the alternative is equally unattractive.

[Balance]

Anything can happen (and probably will) between now and then I guess, but currently I'm struggling to see the need to go negative. It's going to cause a world of pain on many levels to go there. I suspect if it did, it would mainly be because our main trading partners have done so and we need to follow suit in order to keep a cap in the NZD...so relative to said trading partner's currencies, we'll be in the same position we are now.

Anyway, just in case, better keep loading up on them assets :)

Yup - agreed. Money is going to be worth bugger all.

And just wait for the interest income shock for the bank deposits of $256 billion in 2021 when negative interest rates hit.

Banks are forecasting OCR to be minus 0.5% next year which means bank deposit interest rates will drop to less than 1%.

High yielding stocks are going to get repriced hugely if 10% of those deposits move into the sharemarket in search of yield.

[Beagle]

Here's a taste of what's coming with bank deposit rates just to illustrate Balance's point. https://www.bnz.co.nz/personal-banking/investments/rates
and you can be certain its going lower than this in due course :eek2:
I got offered 0.25% per annum, (not a typo), to roll over my Kiwibonds maturing next month. (No prizes for guessing what I did with their reinvestment offer).

[Davexl]

Here's a taste of what's coming with bank deposit rates just to illustrate Balance's point. https://www.bnz.co.nz/personal-banking/investments/rates
and you can be certain its going lower than this in due course :eek2:
I got offered 0.25% per annum, (not a typo), to roll over my Kiwibonds maturing next month. (No prizes for guessing what I did with their reinvestment offer).

Hard to know for sure what to do with spare cash when the S&P has double topped and the whole thing could roll over.
Gotta earn an income somewhere or maybe do the hedging thing again via ASX and have it work this time around...surely can't go even higher or can it?

[Beagle]

Hard to know for sure what to do with spare cash when the S&P has double topped and the whole thing could roll over.
Gotta earn an income somewhere or maybe do the hedging thing again via ASX and have it work this time around...surely can't go even higher or can it?

The size of the chasm between Wall St and main street has never been wider in my 38 years in the market. The disconnect is so disconcerting I try not to think about it.
I stick to value stocks that have a resilient business model like this and OCA on a PE of about 10, high growth at a reasonable price like PAZ, highly defensive yield like GNE and ARG and I think the tech sector in the US will keep on trucking as the way consumers spend has probably permanently changed. Marlin have a lot in the tech sector and I have some of their warrants exercisable in November.
I have some Barramundi in Australia too. I don't have all the answers by any means whatsoever and am really struggling to find different idea's for the sake of more effective diversification for a home for term deposit money maturing in the next two months. I'd be keen to go for more HLG if the price falls back a bit so I get around 20% margin of safety on my $5.36 valuation.

I guess you could hedge with that double bear fund, (sorry forgot the name) if you're really worried.
VIX in the US is getting close to normal so I don't know you'll get the volatility you're looking for or the size of the correction to justify holding a meaningful bear fund position...but who knows ? Must admit I got the strength of the bounce-back since 23 March 2020 very wrong....so far.

[Getty]

BBOZ, Beta Strong Bear fund is the one I've used, probably the one you mean too, on ASX

[Beagle]

Thanks, that's the one.

[Waltzing]

many thanks to MR B for his generous time to these forums and we did buy before his post but this just confirmed our views on HLG as we would have required the full FA results.

[Davexl]

The size of the chasm between Wall St and main street has never been wider in my 38 years in the market. The disconnect is so disconcerting I try not to think about it.
I stick to value stocks that have a resilient business model like this and OCA on a PE of about 10, high growth at a reasonable price like PAZ, highly defensive yield like GNE and ARG and I think the tech sector in the US will keep on trucking as the way consumers spend has probably permanently changed. Marlin have a lot in the tech sector and I have some of their warrants exercisable in November.
I have some Barramundi in Australia too. I don't have all the answers by any means whatsoever and am really struggling to find different idea's for the sake of more effective diversification for a home for term deposit money maturing in the next two months. I'd be keen to go for more HLG if the price falls back a bit so I get around 20% margin of safety on my $5.36 valuation.

I guess you could hedge with that double bear fund, (sorry forgot the name) if you're really worried.
VIX in the US is getting close to normal so I don't know you'll get the volatility you're looking for or the size of the correction to justify holding a meaningful bear fund position...but who knows ? Must admit I got the strength of the bounce-back since 23 March 2020 very wrong....so far.


Yes BBOZ. Thanks for your thinking on this Beagle, really beginning to exercise my mind on what to do. BBUS on ASX would be a more specific hedge of course but might wait a bit to see what happens - hard to pick those turning points, missed on the bounce back also & BBOZ turned out wrong at this time.

Tried to pick up some Hallensteins but a bit late so trying for more GNE to go with my CEN position. Good time for divvies at any rate...

[winner69]

Updated chart of HLG history

Sort of says that based on historic trends HLG currently has a fair bit of 'downside risk' built into the share price.

[Beagle]

Awesome chart Winner, much appreciated.

[Waltzing]

That is indeed a very valuable chart to share. Have to thank winner for such an insightful chart. Does indicate 3.60 - 4.00 is possible again even with Mr B numbers.

[carrom74]

Just saw the news about warehouse restructuring and 750 jobs.On the contrary Hallensteins are looking for more than 40 positions.
https://careers.hallensteinglasson.com/search?search=

[Waltzing]

Well it cant be for floor staff at central north island stores...

[sb9]

Solid buy depth now with couple of days to go before it goes XD.

[Beagle]

11.1% gross yield at the current price if they can pay 36 cps on average going forward, plus the bonus of 15 cps back in a couple of weeks. Hmmm

[Balance]

11.1% gross yield at the current price if they can pay 36 cps on average going forward, plus the bonus of 15 cps back in a couple of weeks. Hmmm

Stop it, Beagle! You are scattering the sellers!

Let those queuing up get some stock - they deserve to participate in the upside too when interest rates drop towards zero next year.

[Cyclical]

Stop it, Beagle! You are scattering the sellers!

Let those queuing up get some stock - they deserve to participate in the upside too when interest rates drop towards zero next year.
LOL. Yep, there's not a lot of liquidity with this one, so if you want, you best reach up and get ;-)

[Beagle]

Stop it, Beagle! You are scattering the sellers!

Let those queuing up get some stock - they deserve to participate in the upside too when interest rates drop towards zero next year.

Probably best then that I don't mention that interest rates are effectively negative already :eek2:
1.4% on term deposit less tax gives ~ 1% net and with inflation averaging about 2% per annum in recent years term deposit investors are effectively in real terms going backwards and earning a real inflation adjusted return of -1.0% per annum :eek2:... Are we at $5 yet :D

[Soolaimon]

LOL. Yep, there's not a lot of liquidity with this one, so if you want, you best reach up and get ;-)

I just reached up and got!!! First time into this stock. Bought my first pair of longs in 1951 from HB and they are still around. Got to be good....

[sb9]

I just reached up and got!!! First time into this stock. Bought my first pair of longs in 1951 from HB and they are still around. Got to be good....

Ah wow 1951 !!! that's some history on your side, thanks for sharing sir...

[Not too Flash]

I just reached up and got!!! First time into this stock. Bought my first pair of longs in 1951 from HB and they are still around. Got to be good....

Must be hard wearing "longs" - do they still fit ?

[pg0220]

I just reached up and got!!! First time into this stock. Bought my first pair of longs in 1951 from HB and they are still around. Got to be good....
Yes they are still good, their this season's oversized sweats are awesome!

[winner69]

I just reached up and got!!! First time into this stock. Bought my first pair of longs in 1951 from HB and they are still around. Got to be good....

Wide at the bottom were they ...with cuffs?

[Soolaimon]

Must be hard wearing "longs" - do they still fit ?

I grew out of them... I was only 10.. but you are right re hard waring they probably got handed on 2 or 3 times and then utilised as rags.

[Soolaimon]

Wide at the bottom were they ...with cuffs?

Wide as and cuffed. Jeans were not around.

[Jantar]

Must be hard wearing "longs" - do they still fit ? I bought my first high school uniform from HB in 1966. I only have the tie left, and it still fits me.

[Soolaimon]

Gosh, HLG must be enjoying a bit of banter their shares just went up 10 cents in the last few minutes

[Waltzing]

Still undervalued by a long long way according to there lastest market update. Im amazed how low the volumes are for this share after the last 10 years of performance. What more do they have to do and they arnt an AIRLINE!!!

[Beagle]

11.1% gross yield at the current price if they can pay 36 cps on average going forward, plus the bonus of 15 cps back in a couple of weeks. Hmmm


Still undervalued by a long long way according to there lastest market update. Im amazed how low the volumes are for this share after the last 10 years of performance. What more do they have to do and they arnt an AIRLINE!!!

25 September is only a month away. If initial trading for FY21 is going okay, the resurgence of Covid is under control and a decent final divvy is announced...

[winner69]

Less competition for Glassons (and HB) in Oz - Mosaic to close 500 stores

Tough world in Oz retail these days but HLG seem to be doing OK -- no doubt online helping big time

https://www.smh.com.au/business/companies/utterly-derailed-noni-b-rivers-owner-to-close-up-to-500-stores-in-wake-of-pandemic-20200825-p55ozf.html

[Waltzing]

Its proven its self beyond the market events that have crushed other companies and has a history of self confidence that of a proven performer like a well run orchestra that knows the hit scores its playing.

[Getty]

Its proven its self beyond the market events that have crushed other companies and has a history of self confidence that of a proven performer like a well run orchestra that knows the hit scores its playing.

That quote should go into the Annual Report.
It will be music to the ears of many.

[percy]

Less competition for Glassons (and HB) in Oz - Mosaic to close 500 stores

Tough world in Oz retail these days but HLG seem to be doing OK -- no doubt online helping big time

https://www.smh.com.au/business/companies/utterly-derailed-noni-b-rivers-owner-to-close-up-to-500-stores-in-wake-of-pandemic-20200825-p55ozf.html
I find the announcement very sad.
The number of empty shops grows daily,through out Australasia..

[Balance]

I find the announcement very sad.
The number of empty shops grows daily,through out Australasia..

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12358429

Paywalled article - Lumley Tower half empty.

Likewise, empty office buildings.

[Beagle]

Its proven its self beyond the market events that have crushed other companies and has a history of self confidence that of a proven performer like a well run orchestra that knows the hit scores its playing.

N.Z's oldest listed company. Many people seem to have forgotten that very pertinent fact i.e. its not just any old Tom Dick or Harry retailer.
Their track record of the last 16 years of paying average annual fully imputed dividends of 31.5 cps through thick and thin, even paid a dividend during the GFC and now Covid is pretty remarkable.

[Waltzing]

"It will be music to the ears of many." that also needs adding to the report!

"N.Z's oldest listed company."

My late father (ACA, QSM) first bought shares in HLG as soon as he could; and was horrified at the 2008 crash and the banking community world wide that smashed his beloved NZ economy he has seen handed down from his parents generation.

He once said he got the portfolio allocations all wrong in 2008. Today we invest and trade the same allocation and sectors today and if only we had held some of his picks longer. POT, FPH, MFT, RYM. Ive never match his picks since but we continue to follow the same themes today.

[iceman]

"It will be music to the ears of many." that also needs adding to the report!

"N.Z's oldest listed company."




I thought Sanford held that title ? But see you are right after further look. HLG 1947, Mercer Group 1959 and Sanford & Ebos 1960

[mudd]

When is ex div date? Thinking of hopping in

[sb9]

When is ex div date? Thinking of hopping in

Goes XD tomorrow, today is the last day to get in for divvy...

[Mudfish]

Hey sb9. Where did you find x divi date? I thought it was the 4th.

[Waltzing]

Mr B informed us here it was the oldest listed. "Only now looking to buy in?" that decision needed to made on the Day the results were made. I was out and was late to the buy at mid day at 4.0. Lowest priced we ever owned was in the low 3's.

[iceman]

Hey sb9. Where did you find x divi date? I thought it was the 4th.

XD on 27th https://www.nzx.com/instruments/HLG/dividends

[sb9]

Hey sb9. Where did you find x divi date? I thought it was the 4th.

4th Sep is the payment date..


XD on 27th https://www.nzx.com/instruments/HLG/dividends

Even this one would the info too..

https://www.nzx.com/markets/NZSX/dividends

[Mudfish]

4th Sep is the payment date..



Even this one would the info too..

https://www.nzx.com/markets/NZSX/dividends


My bad, was getting all mixed up with full profit release on the 25th when another final divi will be 'considered'. Cheers for help.

[winner69]

Not just about HLG but interesting nonetheless

Sharing the risk: Retailers and their landlords face a post-pandemic dilemma


https://www.smh.com.au/business/companies/sharing-the-risk-retailers-and-their-landlords-face-a-post-pandemic-dilemma-20200827-p55pud.html

[sb9]

Strengthening cross rate of NZD with USD should help cushion the import costs.

[Waltzing]

grossly undervalued if this follows GFC results.

[sb9]

Nice amount of divvy just landed in the bank a/c, looking forward to another one to be announced at end of this month.

[Cyclical]

Nice amount of divvy just landed in the bank a/c, looking forward to another one to be announced at end of this month.

Looking pretty attractive too at today's pricing. Just lapped up a few more.

[Balance]

Looking pretty attractive too at today's pricing. Just lapped up a few more.

Agreed. Happy to keep picking up 11% yield. 😊

[nztx]

Any HLG holders on Sharesies platform been paid their Div due yet today ?

[Cyclical]

Any HLG holders on Sharesies platform been paid their Div due yet today ?

I moved most of mine off to my own CSN a while back and the only ones I've got with Sharesies I bought ex div, so can't help you there. What date was it due to be paid? I think the OCA divvy I got the other week was paid by Sharesies a day or so later. The bulk of those I've got against my CSN too, where I'd opted for the DRP...Sharesies can't accommodate that unfortunately. HLG don't have a DRP of course, which means I've got a cheque coming for that dividend, which will be interesting as I'm with Kiwibank who don't take cheques anymore.

[iceman]

I moved most of mine off to my own CSN a while back and the only ones I've got with Sharesies I bought ex div, so can't help you there. What date was it due to be paid? I think the OCA divvy I got the other week was paid by Sharesies a day or so later. The bulk of those I've got against my CSN too, where I'd opted for the DRP...Sharesies can't accommodate that unfortunately. HLG don't have a DRP of course, which means I've got a cheque coming for that dividend, which will be interesting as I'm with Kiwibank who don't take cheques anymore.

Not sure if you are joking here but why on earth would anyone select to have dividends paid by cheque rather than deposited straight into one's account ?

[Lewylewylewy]

Cheque is the default if you haven't ever given your bank details.

[Cyclical]

Not sure if you are joking here but why on earth would anyone select to have dividends paid by cheque rather than deposited straight into one's account ?

No joke unfortunately. Only recently transferred them to the CSN and haven't seen any correspondence from HLG to give me the option yet (maybe there is somewhere on computershare where you can specify that?). As Lewylewylewy said, it seems cheque is the default. No matter, will figure it out with ASB (presumably you can deposit a cheque into a sharetrading cash management account?) or Westpac (revive an old account).

[Snow Leopard]

No joke unfortunately. Only recently transferred them to the CSN and haven't seen any correspondence from HLG to give me the option yet (maybe there is somewhere on computershare where you can specify that?)....

Investor Center, My Profile, Banking Details.

[kiwico]

No matter, will figure it out with ASB (presumably you can deposit a cheque into a sharetrading cash management account?).

Yes you can, any ASB branch will take it. I find that some ASX companies pay only with a cheque which I either save until a trip to Oz to put into my NAB / NABTrade account or if that's not an option I resort to using my ASB Securities AUD account.

[Cyclical]

Investor Center, My Profile, Banking Details.


Yes you can, any ASB branch will take it. I find that some ASX companies pay only with a cheque which I either save until a trip to Oz to put into my NAB / NABTrade account or if that's not an option I resort to using my ASB Securities AUD account.

Thanks both, appreciated.

[King1212]

Result out this Friday....any thoughts??

[BlackPeter]

Result out this Friday....any thoughts??

I predict it will be an intermediate year. Slightly weaker than the previous one but much better than the next :p;

[King1212]

20c dividend again or 15c?

[BlackPeter]

20c dividend again or 15c?

Who knows (and cares ...), but if they are sensible (and I think they are), they better increase their reserves instead of splashing all their earnings around ...

[King1212]

They dont have debts...

if they borrowed,,,,then debts are so cheap now...

[Balance]

They dont have debts...

if they borrowed,,,,then debts are so cheap now...

Good point. Debt is always the cheapest form of funding, especially at times like we are having now.

Still prefer HLG to keep an ungeared balance sheet however. Provides flexibility to manage the volatile times we are in.

[percy]

As a retailer they do have large lease liabilities.
As at half year 1st Feb 2020,current lease liabilities were $21,685,000, while Non current lease liabilities were $58,538,000.
So they would be wise not to have too much, if any, extra debt.

[Beagle]

Tim Glasson has owned 20% of the company for a very long time and I am quite relaxed about the situation as he's a very shrewd operator and I am sure he and his fellow directors will make the right decisions that are in the long term best interest of the company. From where I sit in the cheap seats compared to him I think it is prudent to take a conservative approach to dividends in the present circumstances. I am sure whatever decision the directors make will be the right one and well within the companies ability to pay.

[Cyclical]

Tim Glasson has owned 20% of the company for a very long time and I am quite relaxed about the situation as he's a very shrewd operator and I am sure he and his fellow directors will make the right decisions that are in the long term best interest of the company. From where I sit in the cheap seats compared to him I think it is prudent to take a conservative approach to dividends in the present circumstances. I am sure whatever decision the directors make will be the right one and well within the companies ability to pay.

HLG - a tough year or two ahead I reckon as economic reality hits. But they're resistant and experienced. In the bottom drawer where it belongs.

[Beagle]

HLG - a tough year or two ahead I reckon as economic reality hits. But they're resistant and experienced. In the bottom drawer where it belongs.
Good bottom drawer stock I agree. They have certainly been more resilient than what I expected so far and I suspect this will continue.
Fact is its been a really tough year for people of all walks of life and with this being mental health week while I was out on my much needed walk today I reflected on just how tough its been this year on a lot of people's mental health. All that stress, fear and uncertainty with one's health, wellbeing and for many people their job's or business's. WOW...what a year and its not over yet !!

I suspect plenty of people will still engage with a little retail therapy for a much needed boost to their mood.
Back to level 1 for most of the country helps too and Melbourne is doing a lot better with its problem too.
On a look through Covid basis, this is a very cheap stock and the best retail exposure on the NZX in my opinion. (I also hold a modest position in WHS which I think is a little more defensive but time will tell).

[dibble]

If the divvy is cut think of it as very cheap insurance, the money is still there and if all goes well over the next couple of years we'll probably still get it back some way or another. And if things turn to custard that might be the bit of cash that buys them enough time to adapt and flourish rather than struggle through rushed decisions.

[Balance]

Reporting tomorrow - so last opportunity to get set if you believe HLG is going to pay a final dividend, affirming its status as one of the highest yielding stocks on the NZX.

Meanwhile, RBNZ moving to pressure interest rates down lower and faster :

https://www.interest.co.nz/news/1071...ramme-would-be

Excerpt : "The Reserve Bank’s (RBNZ) Monetary Policy Committee is planning to introduce a Funding for Lending Programme (FLP) before it cuts the Official Cash Rate (OCR) next year.
It essentially wants to push interest rates lower in coming months without going back on its word and cutting the OCR before March 2021."

Watch for billions of dollars of maturing bank deposits to flood into high yielding stocks in the next few months on the NZX as a first response.

[sb9]

Reporting tomorrow - so last opportunity to get set if you believe HLG is going to pay a final dividend, affirming its status as one of the highest yielding stocks on the NZX.

Meanwhile, RBNZ moving to pressure interest rates down lower and faster :

https://www.interest.co.nz/news/1071...ramme-would-be

Excerpt : "The Reserve Bank’s (RBNZ) Monetary Policy Committee is planning to introduce a Funding for Lending Programme (FLP) before it cuts the Official Cash Rate (OCR) next year.
It essentially wants to push interest rates lower in coming months without going back on its word and cutting the OCR before March 2021."

Watch for billions of dollars of maturing bank deposits to flood into high yielding stocks in the next few months on the NZX as a first response.

Sure does, my pick is for minimum of 15c final to high range of 20c or somewhere in the middle of 18c. Let's see which way it'll swing...

[clearasmud]

My pick is 20c

[Waltzing]

a dividend is a dividend and in these times its a win.... not sure what winner(n) would say but im sure he has a view on this.
DISC: we bought back in a few months ago.

KMD we trade but this tock we hold and trade.. over a longer cycles but MR B seems to lead the way on this. Some appear to have big holdings but retail is always a tough rough road and with that in mind this stock has simple been world class Mr B and others?

Balance has 7-8 dollars? and is he is right then we are under weight but there is plenty of time. negative rates appear to not to be factored in yet as the NZ market holds up so far. If the economy doesnt perform there are two women who will be out and about drumming up the country to get a move on. Live in fear people as they visit a town near you.

[Balance]

Sure does, my pick is for minimum of 15c final to high range of 20c or somewhere in the middle of 18c. Let's see which way it'll swing...

If HLG pays 35c to 40c dividends in the next year, I fully expect the sp to go to between $7.00 to $8.00 by end of 2021 - providing a net yield of 5% to investors grappling with zero or negative interest rates next year. Just mho based upon historical experience when interest rates in NZ dropped sharply.

[sb9]

If HLG pays 35c to 40c dividends in the next year, I fully expect the sp to go to between $7.00 to $8.00 by end of 2021 - providing a net yield of 5% to investors grappling with zero or negative interest rates next year. Just mho based upon historical experience when interest rates in NZ dropped sharply.

Not out of question, however it all depends on their outlook statements tomorrow and if its all as per plan then close to $6 this year is a real possibility, as the stock is very tightly held. With Victoria slowly getting COVID under control, that should help AU side things as well.

[King1212]

Not to mention bonus bonds money out soon.... consider NZX is better n stable compare with others countries

[Beagle]

LOTS to like about HLG but one minor annoyance is how more often than not they make their price sensitive announcements just before market open.
Last year's profit announcement came out just a few minutes before market open for example as did their most recent trading update.

I think they could improve their engagement with the investment community by making their price sensitive announcements no later than 9.00 a.m., surely that's not too much to ask ?

[sb9]

Oh my 24c final divvy, take that!!!

[jimdog31]

Oh my 24c final divvy, take that!!!


Thank you for the headsups Beagle!!

[couta1]

And to think all the crap and downramping that was spoken on here a few months ago was just nonsense, just highlights the fact that each must follow their own leading no matter what the crowd say.

[sb9]

A $5 close is not out of question by COB today....

[winner69]

And to think all the crap and downramping that was spoken on here a few months ago was just nonsense, just highlights the fact that each must follow their own leading no matter what the crowd say.

Seems the way of the world eh mate ..... texans have a good phrase for it

I was stupid and topped up when they were going broke :t_up:;)

[winner69]

A $5 close is not out of question by COB today....

Yep, punters will buy the divie now

Wonder what price in December when its paid

[sb9]

Yep, punters will buy the divie now

Wonder what price in December when its paid

Sure, make that $5 by open for now :p

[theflat2]

A $5 close is not out of question by COB today....


Well you were close, hit that on the open!

Not much depth in the sell chart, only 1,000 shares!

[Jantar]

I'm glad I added a few at $4.66 a few days ago. Was kicking myself when They dropped even lower, but I am smiling now.

[winner69]

so full year dividend 39 cents fully imputed

Whats a good risk adjusted return (yield) these days

Say 5% ...........jeez punters could be happy as paying $10

Even if things got a bit bad and divie sown to 30 cents $8 would still be very attractive

[Beagle]

I am almost lost for words. FY21 Sales year to date in the middle of lockdowns in N.Z. and Victoria are up 10.71%...that almost blows my mind and beggars belief ! I thought year to date sales would be down 10% in the circumstances. The 24 cent divvy vastly exceeded my expectations...to be honest I was expecting 10-15 cents or maybe no dividend. Frankly, I am profoundly surprised with how remarkably well they are travelling during this Covid crisis.

After the forecast announcement some weeks back I came up with a fair value of about $5.40 if my memory serves me correctly.
What is clear is that they have managed the most extraordinary of adverse circumstances incredibly well in FY20 and online sales are booming.
The only way I can understand that is to try and get my head around the power of a powerful brand. Powerful brands have been doing well during the Covid crisis and I think the sales being up nearly 11% year to date really underscores that HLG has very strong brand power.

39 cents fully imputed = 54.2 cps gross. At 9% (which is the same yield I used in my previous dividend valuation...it could be argued yields have come down since then), I get fair value of 54.2 / 0.09 = $6.02.

Remarkable resilience by this company in FY20 during the most challenging conditions ever (including very adverse exchange rate in FY20), which has notably improved materially for them since then and the trend to online sales and the early sales growth in FY21 gives substantial encouragement to holding what is arguably the premier dividend payer on the NZX.

Disc: I added more this morning.

[jonu]

And to think all the crap and downramping that was spoken on here a few months ago was just nonsense, just highlights the fact that each must follow their own leading no matter what the crowd say.

I take it you stayed the course couta? Pleased for you. I remember the hubris being tossed about.

[couta1]

I take it you stayed the course couta? Pleased for you. I remember the hubris being tossed about. I stayed the course but in a reduced way as I significantly upped my A2 holding. PS-I shall be rejecting any crap talk on that stock with a passion.

[King1212]

Thanks Couta!!! I really apricate it..Love my HGH and HLG now...

waiting patiently with KPG...

[Biscuit]

Stunning result in the circumstances. Glad I never sold but wish I'd bought a few more back then when it was falling off the cliff.

[bull....]

if you brought around $2 your return on current year divs is now 20% lol lovely for a great stock

[couta1]

if you brought around $2 your return on current year divs is now 20% lol lovely for a great stock I remember you being one of the biggest downrampers, nuff said.

[King1212]

I remember you being one of the biggest downrampers, nuff said.


yeah bull!!!

[Beagle]

And to think all the crap and downramping that was spoken on here a few months ago was just nonsense, just highlights the fact that each must follow their own leading no matter what the crowd say.

I sold in early 2020 at an average of ~ $6 in early 2020 as a capital preservation measure and clearly articulated my concerns and the risks presented by Covid. This was not downramping and those concerns were not nonsense. Those that left their sell-down till much later and sold down in the depths of the Covid crisis only have themselves to blame.

HLG have been more resilient than I think anyone reasonably could have expected. I called it as I saw the risks at the time and reiterate that it was not downramping.

[bull....]

I remember you being one of the biggest downrampers, nuff said.

its not down ramping when your analysing potential impacts on a business of covid and nobody i mean nobody new what the impact would be so you have to plan for the worst in those senario,s. at some point some businesses become value propositions worth a risk.
bye the way i dont own the stock

[couta1]

I sold in early 2020 at an average of ~ $6 in early 2020 as a capital preservation measure and clearly articulated my concerns and the risks presented by Covid. This was not downramping and those concerns were not nonsense. Those that left their sell-down till much later and sold down in the depths of the Covid crisis only have themselves to blame.

HLG have been more resilient than I think anyone reasonably could have expected. I called it as I saw the risks at the time and reiterate that it was not downramping. I'm not pointing the finger at any individual although bull did lead himself into a response, my point being is that one must follow their own conviction and not be swayed by the crowd of the moment no matter how loud that crowd bleets.

[winner69]

Govt grants (wage subsidies ) of $8m plus

Helps in a big way to paying the $14m dividend


Workers keep their jobs ....shareholders happy as ...thanks Grant (and Jacinda) and ScoMo

[Beagle]

its not down ramping when your analysing potential impacts on a business of covid and nobody i mean nobody new what the impact would be so you have to plan for the worst in those senario,s. at some point some businesses become value propositions worth a risk

Well said but we're wasting our time talking about investment risk management strategies with some people who simply cannot grasp why one should try and spread or mitigate risk in the first place.

Anyway...lets get back to positive stuff and try and have a happy day. HLG being fundamentally rerated as the market comes to grip with the power of the brand.

I guess there was a free heads up for me that I should have taken more notice of when BMW N.Z. said their sales for the first half of the year were at all time record level's despite Covid. The doubt in my mind at the time was I was not sure if this was the "ultimate driving machine" brand power or whether it was just that a lot of wealthy people thought they ran a real chance they might die so they thought they might as well go out in style lol.

Speaking of style, it would appear that a lot of women want to keep up appearances on zoom (but to do so at a reasonable price), so they get stuck into Glassons gear.

[JeremyALD]

What an amazing business.

The directors and team deserves to celebrate tonight. Truly amazing performance, investing significantly into their online platforms over the last few years has paid dividends!!

[winner69]

Great overall result

But Hallensteins remain the problem child......has been for a few years now.

Sales back to 2016 levels and with declining margins stuff all profit.

Worry also they weren’t as resilient as Glassons during the tough times ...maybe a guy shopping thing. Hallensteins H2 sales down 20% and profit down 50%...ouch


Just saying.

[percy]

Interesting noting the two retailers [HLG and Briscoes] who developed their online channel early ,are trading so well.
In hindsight their foresight was right.

[Oliver Mander]

Have just gone thru and updated my own forecasts after this result. Was lucky in that my own forecasts were very close to the actual 2020 result, so have built up a position (as a defensive play on Covid, somewhat unbelievably) since early August.

But what really gets me is the future outlook - they've had a great start to 2021, in spite of lockdowns, and seem ton have managed the crisis well so far. Some concern over the government wage subsidy payment, which obviously won't continue...but I had factored that in to my valuations. At a high discount rate (its still a relatively volatile share compared to the index, so has a high beta), I'm coming up with something north of $6 a share. Have not trawled previous comments here yet, but will do so shortly...I'm picking its pretty favourable :-)

[Balance]

If HLG pays 35c to 40c dividends in the next year, I fully expect the sp to go to between $7.00 to $8.00 by end of 2021 - providing a net yield of 5% to investors grappling with zero or negative interest rates next year. Just mho based upon historical experience when interest rates in NZ dropped sharply.

Heading towards $6.50 as a first stop by Christmas. You read it here first.

[peat]

well I kept the faith all the way through with what is currently 15% of portfolio so there is a certain sense of relief
For me the result and the market response re-iterates the solid place this company has as a part of my core portfolio. I have traded holdings on top of that but refused to go to zero despite covid.
Thanks for coming through HLG and I doubt I will sell this core holding at any level now.

PS tbh I'm a bit disappointed Couta. :mellow: :p

Going in and out of quality shares is a choice, of course but it adds to human error possibilities. A portfolio of quality lessens the number of decisions that need to be made.
I am taking on board the lesson to not get shaken out with quality companies. This time I passed the test.

[macduffy]

Only a small part of my portfolio but as Jeremy said, what an amazing business!

:)

[macduffy]

The Herald's headline damns with faint praise!

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12367879

[Beagle]

https://www.glassons.com/ Very attractive website, no wonder sales are smoking hot :D

[Leftfield]

Well done holders...... impressive result and great to see the SP up 18% today.

[Waltzing]

With the number of retailers closing across the southern hemisphere surely an allocation to this sector higher than 20% would be a personal private investor choice. But i dont think any fund manager would be brave enough to go any higher than that or even come close to it unless they were overweight an a major brand.

topped 6 dollars 4 X in the last n years.. each time it reach those highs it was a sell. stayed up there for very very limited time.

11964

[peat]

topped 6 dollars 4 X in the last n years.. each time it reach those highs it was a sell. stayed up there for very very limited time.

11964

the more times a price resistance level is tested before it is ultimately breached then the more powerful the move.

[winner69]

Last time I posted this chart (a month ago) I said share price heading to 6 bucks plus

Share price been close to or over 6 bucks three times before

With Glassons on fire (even with stores closed) and Hallensteins getting fixed and landlords playing ball and expenses well under control no reason why F21 EPS shouldn't be over 50 cents
Share price heading to 7 bucks latest call.

This is not down ramping or risk mitigation - its just showing in a well thought out way where the share price is heading in these days of record low interest rates.i

[clearasmud]

I said to the salesman at Hallensteins on the Gold Coast early this year what a great stock it was over on the NZX
He said he should buy some.
Who would believe that it was about to drop from $6 to $1.80.
I hope he got some cheap.
I'm glad I topped up there.
Its still my biggest NZX holding.
I like dividend stocks.
Unfortunately for me HGH,MHJ,FBU,PGG,STU have all disappointed in that regard this year.

[Waltzing]

I should add that each time the price reach 6 dollars major global financial events were unfolding and the major holders dont sell this stock that we can see even the individual know as C. Vol is always light on this ticker therefore the sell price maybe set by small retail holders.

The fluctuation in price is very high with this stock and lends its self to trading on an almost bi annual basis.

The chart posted by winner (n) shows the range clearly 3.50 to 5.50. We last sold at over 6.

[deleted] - re winner (n) Investing Advisory Board.

[winner69]

I should add that each time the price reach 6 dollars major global financial events were unfolding and the major holders dont sell this stock that we can see even the individual know as C. Vol is always light on this ticker therefore the sell price maybe set by small retail holders.

We note that vol is higher in KMD.

Hey walt - no need to mention KMD and HLG in the same breath - really bad form mate

One stands out on all measures

But biggest difference is one is run by people who have retail in their blood and that company will always outperform the one run by guys who have the college thinking and are good at doing cool looking presentations full of buzz words.

[Snow Leopard]

Govt grants (wage subsidies ) of $8m plus

Helps in a big way to paying the $14m dividend


Workers keep their jobs ....shareholders happy as ...thanks Grant (and Jacinda) and ScoMo

Good to see that the grants are taxed so they are basically getting their money back and I do not have to feel guilty receiving the dividend.

Hallensteins obviously not quick enough introducing a lockdown casuals range but Snow Leopards are naturally outfitted for any occasion:

https://s27142.pcdn.co/wp-content/uploads/2018/03/Chhinsu-with-tail-in-snow-b11.jpg

[Waltzing]

Statement amended and deleted[] due to local outrage from long time investors (winner (n)) regarding a ref to another retail ticker. (All just tickers to our software).....

It is true there appears to be a heavy top tier of corporate board members who have a track record of leverage arrangements in companies where they held management positions in KMD.

[Ferg]

Good to see that the grants are taxed
The wage subsidies were non-assessable income but the wages to which they relate are also non-deductible.
Link: https://www.ird.govt.nz/covid-19/business-and-organisations/employing-staff/wage-subsidies/wage-subsidy---issues-for-employers

I don't have an issue with organisations getting the subsidy and subsequently being profitable. The subsidy paid the wages for the period of the lockdown which stopped mass redundancies. The clients I work with still incurred massive losses in April, even after taking the wage subsidy into account. The fact things have been going gang busters ever since is due to a number of factors which we are now seeing with a number of listed organisations.

[King1212]

At current SP is still at 7persen yield

[Mudfish]

Yip, that's right, 7% after tax, so roughly 10% before tax. Quite incredible really.

[peat]

Yip, that's right, 7% after tax, so roughly 10% before tax. Quite incredible really.

Im just sayin though - and astute readers will note that I am having no consistency in my views - the worst shares I've ever bought have been div yield traps.

[King1212]

That what u said too on FRE...but sp been up since your last post 80c....

[BlackPeter]

maybe peat has a different time horizon than you have? I can see where he is coming from.

[Beagle]

HLG has made this dog quite fat with its XXXXXL dividend feeds over the years. Very interested in adding even more after today's remarkable revelation about how resilient they have been in extraordinarily difficult circumstances. Sales up ~ 11% year to date (with the benefit of a much better exchange rate than last year)...considering lockdown's on both sides of the Tasman...I struggle to get my head around how good that is in the circumstances.

Yes, just on 10% gross yield at today's close of $5.55 and 24 cents of that back in just on 2 1/2 months just in time for Christmas shopping :)

Disc: Topped up twice today and probably haven't finished yet. Where else can you get an extremely resilient 10% yield !

[Waltzing]

As i have said before MR B has made off with the money.... lucky we got a few at 4.01 but its still gnawing us to the bone to see how good this company really is.... (not nearly enough as usual)... sometimes a balance portfolio just cant compete...

[Snow Leopard]

Excluding HLG I had a pretty successful day on the NZX.

Including HLG, well, I have decided to treat myself to a bottle of wine this weekend.

12 month compound buy and hold return 2.89% :mellow:
6 month compound buy and hold return 117% ;)

[nztx]

Excluding HLG I had a pretty successful day on the NZX.

Including HLG, well, I have decided to treat myself to a bottle of wine this weekend.

12 month compound buy and hold return 2.89% :mellow:
6 month compound buy and hold return 117% ;)


Something similar seen here

ANZ with Aussie Govt's straightjackets on banks being relaxed today & HLG reporting
represent some fairly good gains

The bundle of best of the other selected NZX holdings have performed pretty well with good entry points

[Cyclical]

Excluding HLG I had a pretty successful day on the NZX.

Including HLG, well, I have decided to treat myself to a bottle of wine this weekend.

Same here. My portfolio being overweight in HLG and OCA is really starting to pay off. OCA has plenty of scope for medium term capital growth still i reckon, while this one i suspect will back off somewhere just north of 6 bucks in the short term, so I'll just have to be content with those juicy dividends going forward and wait for people to get tired of sub 1% returns on their TD's for more SP appreciation...I'm in no hurry, not selling either stock as the tax bill will be horrendous.

[Beagle]

Good to see that the grants are taxed so they are basically getting their money back and I do not have to feel guilty receiving the dividend.

Hallensteins obviously not quick enough introducing a lockdown casuals range but Snow Leopards are naturally outfitted for any occasion:

https://s27142.pcdn.co/wp-content/uploads/2018/03/Chhinsu-with-tail-in-snow-b11.jpg

That fur coat looks a bit thick and heavy for summer ;)

[couta1]

Same here. My portfolio being overweight in HLG and OCA is really starting to pay off. OCA has plenty of scope for medium term capital growth still i reckon, while this one i suspect will back off somewhere just north of 6 bucks in the short term, so I'll just have to be content with those juicy dividends going forward and wait for people to get tired of sub 1% returns on their TD's for more SP appreciation...I'm in no hurry, not selling either stock as the tax bill will be horrendous. By some weird coincidence I have just paid myself the same XXXOS divvy I would have received if I had my original sized HLG holding by selling my A2 holding down and buying back to match current market price.

[clearasmud]

By some weird coincidence I have just paid myself the same XXXOS divvy I would have received if I had my original sized HLG holding by selling my A2 holding down and buying back to match current market price.
Yes I thought you sold most of your HLG.

[couta1]

Yes I thought you sold most of your HLG. Yep had some genuine other expenses to sort out unfortunately.

[clearasmud]

Yep had some genuine other expenses to sort out unfortunately.
Bugger because you were top 20

[clearasmud]

I may join you on the ATM register soon.
Tell me again how confident are you that it will get to 25 within the next 9 months or so.

[couta1]

Bugger because you were top 20 I actually made it to spot number 10 at one point. Regarding that $25 for A2, being one of the top 100 holders that own 87% of the company I'm very confident, if you study the past price movements you will notice that it's price can accelerate quickly once the game players stop playing.

[winner69]

Im just sayin though - and astute readers will note that I am having no consistency in my views - the worst shares I've ever bought have been div yield traps.

Divie yields great today and going forward ......but from where markets are today there is a high chance of a loss of capital I reckon

Nothing like a free lunch eh peat .... or as some say making such high returns (over risk free rate) it must be too good to be true

[Biscuit]

Divie yields great today and going forward ......but from where markets are today there is a high chance of a loss of capital I reckon

Nothing like a free lunch eh peat .... or as some say making such high returns (over risk free rate) it must be too good to be true

I reckon as long as interest rates are going down, good dividend yield stocks likely in demand. It's when interest rates no longer under pressure dividend stocks going to be re-rated. What then? Maybe bank stocks worth looking at over the next wee while, one of the few shares likely to do well with rising interest rates?

[clearasmud]

Dream on re rising interest rates

[Biscuit]

Dream on re rising interest rates

You're clearly young. Law of physics, what goes down must come up.

[nztx]

What proportion of the Billions in Bonus Bond refunds is likely to be looking for a better home paying more than the fraction of 1% (before IRD takes their swipe out) the banks are currently paying ?

[nztx]

IMO - HLG is unique - one of the highest yields on the board currently with full Imputation credits
Not much to not like about the Company, it's figures, even if one of the most difficult sectors out there
but they've proven they are leaders in the field, where others here & in Aussie have fallen over.

HGH may well get back up the list again in future when Govt relax NZ bank dividend payment restrictions

There aren't all that many better quality shares with higher dividend yields & fully imputed

That suggests both HLG & maybe HGH later may deserve a SP rerating in time if not sooner, assuming past
the shadows pundit's recessionary speils, HLG rides out the waves as well as it has in recent times

[Waltzing]

HLG seems to be a stock that does not attract much vol because its retail. No matter how well it has performed on the last decade it should be as balance says a 7 dollars stock already. But is seems to be hit every time like a cyclical stock. AIR attracts the money and this stock does not? Incredible , almost beyond logic.

[Jantar]

HLG seems to be a stock that does not attract much vol because its retail. No matter how well it has performed on the last decade it should be as balance says a 7 dollars stock already. But is seems to be hit every time like a cyclical stock. AIR attracts the money and this stock does not? Incredible , almost beyond logic. HLG is my largest holding at 19.3% of my portfolio. AIR is my smallest at 0.3% (just enough to force me to keep watching their SP)

[BlackPeter]

I reckon as long as interest rates are going down, good dividend yield stocks likely in demand. It's when interest rates no longer under pressure dividend stocks going to be re-rated. What then? Maybe bank stocks worth looking at over the next wee while, one of the few shares likely to do well with rising interest rates?

Question is - do we think Mr. or Mrs. Market are wrong? Nothing of what you said is unknown to them, and while they might be bipolar, they are not stupid.

Which just means that the HLG SP is (compared to the dividend yield) that cheap because

a) market thinks interest rates will go up (and therefore divi not anymore that outstanding) or
b) market thinks HLG will not be able to maintain this amazing dividend.

I don't see any other reason which would not be a subset of b).

Personally I think option b) is more likely than option a, but whatever it is - HLG is not cheap considering the risks. Obviously - risks might not eventuate, but this would be luck.

Obviously - I realize that HLG does not fly nor float (which is good for an investment), but still - remember how everybody told us still 12 months ago what an amazing investment AIR is. I understand some people still believe that today. Who knows what happens to HLG in 12 months from now?

Enjoy the amazing divvie as long as it lasts ... but I am not convinced that the total return of HLG over say the next 10 years would be higher than e.g. that of FPH, OCA, SUM or MFT.

[Biscuit]

Question is - do we think Mr. or Mrs. Market are wrong?......

The market is always right until it is wrong. Markets are forward looking, and since you can't see the future, logically the market is going to be wrong. However, market sentiment does not predict the future, so much as create the future so it is always right until it isn't. This is fairly predictable in a way which is why, with a little thought, you can make money off the market.

[couta1]

Question is - do we think Mr. or Mrs. Market are wrong? Nothing of what you said is unknown to them, and while they might be bipolar, they are not stupid.

Which just means that the HLG SP is (compared to the dividend yield) that cheap because

a) market thinks interest rates will go up (and therefore divi not anymore that outstanding) or
b) market thinks HLG will not be able to maintain this amazing dividend.

I don't see any other reason which would not be a subset of b).

Personally I think option b) is more likely than option a, but whatever it is - HLG is not cheap considering the risks. Obviously - risks might not eventuate, but this would be luck.

Obviously - I realize that HLG does not fly nor float (which is good for an investment), but still - remember how everybody told us still 12 months ago what an amazing investment AIR is. I understand some people still believe that today. Who knows what happens to HLG in 12 months from now?

Enjoy the amazing divvie as long as it lasts ... but I am not convinced that the total return of HLG over say the next 10 years would be higher than e.g. that of FPH, OCA, SUM or MFT. I think your outlook lends itself to putting your money under the nearest mattress.

[dibble]

The market is always right until it is wrong. Markets are forward looking, and since you can't see the future, logically the market is going to be wrong. However, market sentiment does not predict the future, so much as create the future so it is always right until it isn't. This is fairly predictable in a way which is why, with a little thought, you can make money off the market.

Sage words. Are you a student of Hayek?

[Biscuit]

Sage words. Are you a student of Hayek?

I read one of his books many years ago, which I enjoyed. Students of Hayek are likely a bit extreme.

[winner69]

Sage words. Are you a student of Hayek?

His Road to Serfdom is a classic

Word Serfdom used a lot these days ...pandemic ensuring that’s where we are heading.

[winner69]

I read one of his books many years ago, which I enjoyed. Students of Hayek are likely a bit extreme.

Ever read Karl Popper’s ‘The Open Society and Its Enemies’?

[Beagle]

Question is - do we think Mr. or Mrs. Market are wrong? Nothing of what you said is unknown to them, and while they might be bipolar, they are not stupid.

Which just means that the HLG SP is (compared to the dividend yield) that cheap because

a) market thinks interest rates will go up (and therefore divi not anymore that outstanding) or
b) market thinks HLG will not be able to maintain this amazing dividend.

I don't see any other reason which would not be a subset of b).

Personally I think option b) is more likely than option a, but whatever it is - HLG is not cheap considering the risks. Obviously - risks might not eventuate, but this would be luck.

Obviously - I realize that HLG does not fly nor float (which is good for an investment), but still - remember how everybody told us still 12 months ago what an amazing investment AIR is. I understand some people still believe that today. Who knows what happens to HLG in 12 months from now?

Enjoy the amazing divvie as long as it lasts ... but I am not convinced that the total return of HLG over say the next 10 years would be higher than e.g. that of FPH, OCA, SUM or MFT.

Mr market gave us a valuable lesson yesterday, (very valuable for those already well positioned lol.)
Consider this, how is it possible in the midst of a Covid crisis with stores shuttered in Melbourne and some in Auckland that sales year to date in FY21 are up ~ 11% compared to FY20 when all stores were open and nobody had even heard of Covid ? How has for example Nike done so well on the US market despite the lack of live sports ? The answer of course is brand power and its clear Glassons has much more brand power than the market had previously ascribed to it.

Consider this, HLG was north of $6 before Covid hit but the company is currently performing year to date in FY21 better than before Covid hit !
On the interest rate front the risk free rate has dropped hundreds of basis points so that suggests some PE expansion is quite plausible compared to say last year. Combined this suggests that surely HLG is worth at least what it was before Covid hit, low $6's and arguably more, I don't think talk of $7 is silly at all.

Thanks to Couta1 who has done the research, the company has paid dividends every single year in the last 16 years, during the GFC and now during Covid. The average has been 31.5 cps but its clear in recent years the company has grown from a circa ~ $220m a year business up to very close to a $300m a year business.

I think the current dividend is sustainable or something very close to it. How many other truly resilient companies are there on the NZX paying a ~ 10% gross yield ? I am all ears mate of you can name some more for me.

My opinion of the level of the resiliency of the company and its operations changed quite dramatically yesterday. I had them pegged for a 10-15% sales decline YTD in FY21 and had got my head around those modest expectations and holding a reasonable stake as a look through Covid impact investment case but the way this company has demonstrated resiliency during Covid has quite frankly been nothing short of truly remarkable. I am back to a fulsome holding after two top up's yesterday but I am keen for more with that ~ 10% gross yield.

[Biscuit]

Ever read Karl Popper’s ‘The Open Society and Its Enemies’?

Never read anything by Karl Popper but my American third year molecular biology lecturer used to quote him all the time. Apparently he invented modern science.

[Baa_Baa]

It was an astoundingly good buy under $2 recently but that’s what happens when the market goes mental, a fleeting glimpse at value investing but gone in a heartbeat.

Now maybe not such a good proposition unless one is convinced there’s an upside above past cyclical highs, or maybe just for the ROI from dividends which history shows is robust

[dibble]

Mr market gave us a valuable lesson yesterday, (very valuable for those already well positioned lol.)
Consider this, how is it possible in the midst of a Covid crisis with stores shuttered in Melbourne and some in Auckland that sales year to date in FY21 are up ~ 11% compared to FY20 when all stores were open and nobody had even heard of Covid ? How has for example Nike done so well on the US market despite the lack of live sports ? The answer of course is brand power and its clear Glassons has much more brand power than the market had previously ascribed to it.


Thats a confusing, somewhat contradictory lesson. One thing I've gleaned is that this seems to be run by people who really, genuinely know what they are doing...regardless of the regular oscillation of the shareprice between about 3 and 6, they continue to respond to threats, evolve and make consistent returns.
Indeed if NZ embarked on a decade of nudity I suspect we would still get a sustainable dividend

[jimdog31]

Thats a confusing, somewhat contradictory lesson. One thing I've gleaned is that this seems to be run by people who really, genuinely know what they are doing...regardless of the regular oscillation of the shareprice between about 3 and 6, they continue to respond to threats, evolve and make consistent returns.
Indeed if NZ embarked on a decade of nudity I suspect we would still get a sustainable dividend

That last sentence made me choke on my cornflakes haha!

[BlackPeter]

I think your outlook lends itself to putting your money under the nearest mattress.

Not quite. I just prefer to buy undervalued stocks. At this stage I don't consider HLG as undervalued, but hey - at times the market disagrees with my views (and so it does with yours :) );

[Balance]

An economic show-stopping economic crisis like the GFC or Covid-19 reveals and brings out the best or worse in a company.

We can all remember how just about all the finance companies collapsed post the GFC but how Marac emerged from crisis to become Heartland.

I believe there is overwhelming consensus from the majority of posters (& the market this year) that HLG stands out in the retail sector as having the right competitive advantages to power on from the aftermath of this pandemic crisis.

The company is however in the fashion industry and we have seen how it can get itself out of step from time to time with what the market demands. So HLG will and should never trade as a low risk high yielding stock for investors.

There are 3 major factors I am picking which will be driving HLG’s sp in the next 3 months easily pass $6.00 and beyond.

Watch this space!

[Beagle]

Thats a confusing, somewhat contradictory lesson. One thing I've gleaned is that this seems to be run by people who really, genuinely know what they are doing...regardless of the regular oscillation of the shareprice between about 3 and 6, they continue to respond to threats, evolve and make consistent returns.
Indeed if NZ embarked on a decade of nudity I suspect we would still get a sustainable dividend

:lol: :lol: That's gold right there !
Beautifully encapsulates how resilient the dividends are and in a world of zero interest rates for as far ahead as anyone can foresee, gives plenty of food for thought.

[King1212]

Hlg targets mid to low income people.

They sell clothing that affordable, fashionable and reasonable quality. They up to the trend and n well managed.

Interest rate will remain low possible negative for the next three years...as the Fed already mentioned it.

[Balance]

Hlg targets mid to low income people.

They sell clothing that affordable, fashionable and reasonable quality. They up to the trend and n well managed.

Interest rate will remain low possible negative for the next three years...as the Fed already mentioned it.

Met Tim Glassons years ago at an investors’ presentation and asked him how he & his team kept up with the latest trends in the fast moving women fashion world.

He said that it was about having a great design team and investing substantially in them attending all the fashion & trade shows highlighting the latest trends, in style as well as fabrics.

Then, there’s the ‘little’ trick of visiting the suppliers in China and going through their show-rooms, but more important was to visit their cutting rooms and store-rooms. A keen eye is needed to spot the trends emerging out of the rooms for the next season from the major fashion houses. 😜

[Waltzing]

"attending all the fashion & trade shows highlighting the latest trends, in style as well as fabrics."

terrible life, all that champagne... business class flights.... terrible ...glam... the BP's

and why does this share sell off after december div...

has the worst TA chart ive ever seen for the balance sheet and dividend...doesnt make any sense.

[King1212]

Great coverage from uncle Jarden.... regarding investors that looking for yield in low or zero interest condition

[Beagle]

Sorry guys but I am going to have to upgrade again.

Finally got around to having a good look through HLG's accounts yesterday (after still marveling about how well they've managed the Covid crisis) and wondering how on earth sales year to date FY21 are up 11% on the same period last year before anyone had even heard of Covid.

One figure that stuck out like the proverbial third ball on a greyhound was cash and short term deposits.
Have a look at the last 5 years figures off the balance sheets and see which one sticks out
2016 $14.1m, 2017 $12.5m, 2018 $17.4m 2019 $16.5m and 2020 $49.6m. Oh my goodness even accounting for the 15 cps interim dividend they held back of $8.94m that's remarkable and leaves the company extremely well positioned with a whopping 83 cps in cash and short term deposits per share as at balance date !

Looking forward one wonders how they are going to use that cash ?
ecommerce sales are booming so there's no need to roll out additional stores, they completed new distribution centers in N.Z. and Australia. What's left to spend on capex in the foreseeable future ?
Maybe some store modernisations in due course but I think capex in the new couple of years will be much less than depreciation so that's a problem generating even more free cash flow over and above earnings.

Next we turn to how they're going, sales up 11% and I think they can do around 50-55 cps in earnings in FY21 (up from 46.6 cps last year) with materially better exchange rates, sales increase and less Covid related logistical cost impositions. They did over 48 cps in FY19 so I don't think its a stretch to say 50 cps is a reasonable FY21 forecast.


Turning to what dividends they can pay, well frankly with so much cash on hand at balance date (83 cps) and capex likely to be less than depreciation generating even more cash there's no reason for them not to pay out all their earnings of 50 cps and I see that as being durable for the foreseeable future so I have upgraded my dividend expectations to 50 cps fully imputed for the next few years because of the grossly excessive amount of cash on the balance sheet.

50 / 0.72 = 69.44 cps gross. Using my 9% required rate of return this implies on a dividend yield basis fair value is 69.44 / 0.09 = $7.71.

Turning to what's a fair PE, I note Briscoes is on a PE of 14.3, and WHS on 13. I think HLG is executing better than either of these two but will use BGR's PE as a fair proxy for what's reasonable for HLG. 14.3 x eps of 50 cps = $7.15.

In a zero interest rate environment where investors are starved for yield and taking into account HLG's remarkable record of reliable dividends over the last 20 years, their current very high cash position, current trading and trading cum a 24 cent fully imputed dividend in December I am more inclined towards the divided yield value of $7.71.

But I will stick with the blended average of the dividend yield and PE value assessment which gives ($7.71 + $7.15) / 2 = $7.43 is my upgraded target price for HLG

Disc: I have recently added more.

[macduffy]

It all adds up to more pressure on HLG to re-pay the wage subsidy?

Disc: I hold.

[Beagle]

No, not at all. I see recent politician statements as empty and baseless political "grandstanding" for the election. Labour defined and set the terms of the wage subsidy and most companies that we're eligible took it. Companies primary responsibility is to shareholders not taxpayers. Not any companies fault if Labour's terms we're inexact or have resulted in imperfect outcomes but I also note HLG's FY20 profit inclusive of the wage subsidy was down on the FY19. Not even a modest storm in a lukewarm teacup in my opinion.

High exchange rate should provide a further tailwind to HLG's profit than the much lower rates that prevailed for much of FY20. I think the clear risk to my forecast of 50 cps in earnings is to the upside. In the unfortunate event of another Covid lockdown, I note that the company has previously demonstrated remarkable resiliency.

[macduffy]

I agree, Beagle. But it's the perception that matters. I hope you're right and that it doesn't become an issue to the detriment of HLG's reputation and image.

[Jantar]

…...
50 / 0.72 = 69.44 cps gross. Using my 9% required rate of return this implies on a dividend yield basis fair value is 69.44 / 0.09 = $7.71.......
I have a spreadsheet that gives me a SP that will return a 5% yield after tax allowing for expected growth and average dividends over the past 2 years. Because of Covid I conservatively assigned a zero growth for the next 2 years, and my spreadsheet gives a fair SP of $7.72.

HLG is now my largest holding representing 18% of my portfolio. I am a bit nervous about so much in one company, yet still tempted to add more.

[percy]

I agree, Beagle. But it's the perception that matters. I hope you're right and that it doesn't become an issue to the detriment of HLG's reputation and image.

I have stayed away from companies that received the Govt wage subsidy,in fact I sold my PGW, as I did not feel I understood where or what it meant to the ongoing operations of each business that received it.Still don't.
The affect of leases too has made a lot of companies difficult for me to understand.

[dameofdiv]

I have stayed away from companies that received the Govt wage subsidy, in fact I sold my PGW, as I did not feel I understood where or what it meant to the ongoing operations of each business that received it.Still don't.
The affect of leases too has made a lot of companies difficult for me to understand.

I agree, it's really hard to know how badly the business has been affected among those businesses who receive the subsidy. Some are impacted real bad but some revenue decline are just being "deferred". It is a very lax criteria. 30% decline in revenue over a 30 days period for the original subsidy, and 40% decline in the revenue over 14 days. Many businesses will tick the box easily.
Leases however, is just an accounting entry, I personally wouldn't be too worried about it, and will exclude the entire "interest unwind", "depreciation" and capitalised portion of the lease altogether, and just focus on the actual lease payments. jus my 2cents.

[King1212]

Got to be fair for HLG to take the subsidy...they closed thier shops for almost 50days....kept all the staffs...not to mention working hard to make sure thier business afloat

[macduffy]

Leases however, is just an accounting entry, I personally wouldn't be too worried about it, and will exclude the entire "interest unwind", "depreciation" and capitalised portion of the lease altogether, and just focus on the actual lease payments. jus my 2cents.

I may be wrong but I think percy's issue with leases is around the contingent liability that they pose, eg will they be enforced - rentals charged - on premises closed during lockdown; will rental reductions be allowed; can lease liabilities be excused or avoided? I have the same issues.

[jimdog31]

Sorry guys but I am going to have to upgrade again.

Finally got around to having a good look through HLG's accounts yesterday (after still marveling about how well they've managed the Covid crisis) and wondering how on earth sales year to date FY21 are up 11% on the same period last year before anyone had even heard of Covid.

One figure that stuck out like the proverbial third ball on a greyhound was cash and short term deposits.
Have a look at the last 5 years figures off the balance sheets and see which one sticks out
2016 $14.1m, 2017 $12.5m, 2018 $17.4m 2019 $16.5m and 2020 $49.6m. Oh my goodness even accounting for the 15 cps interim dividend they held back of $8.94m that's remarkable and leaves the company extremely well positioned with a whopping 83 cps in cash and short term deposits per share as at balance date !

Looking forward one wonders how they are going to use that cash ?
ecommerce sales are booming so there's no need to roll out additional stores, they completed new distribution centers in N.Z. and Australia. What's left to spend on capex in the foreseeable future ?
Maybe some store modernisations in due course but I think capex in the new couple of years will be much less than depreciation so that's a problem generating even more free cash flow over and above earnings.

Next we turn to how they're going, sales up 11% and I think they can do around 50-55 cps in earnings in FY21 (up from 46.6 cps last year) with materially better exchange rates, sales increase and less Covid related logistical cost impositions. They did over 48 cps in FY19 so I don't think its a stretch to say 50 cps is a reasonable FY21 forecast.


Turning to what dividends they can pay, well frankly with so much cash on hand at balance date (83 cps) and capex likely to be less than depreciation generating even more cash there's no reason for them not to pay out all their earnings of 50 cps and I see that as being durable for the foreseeable future so I have upgraded my dividend expectations to 50 cps fully imputed for the next few years because of the grossly excessive amount of cash on the balance sheet.

50 / 0.72 = 69.44 cps gross. Using my 9% required rate of return this implies on a dividend yield basis fair value is 69.44 / 0.09 = $7.71.

Turning to what's a fair PE, I note Briscoes is on a PE of 14.3, and WHS on 13. I think HLG is executing better than either of these two but will use BGR's PE as a fair proxy for what's reasonable for HLG. 14.3 x eps of 50 cps = $7.15.

In a zero interest rate environment where investors are starved for yield and taking into account HLG's remarkable record of reliable dividends over the last 20 years, their current very high cash position, current trading and trading cum a 24 cent fully imputed dividend in December I am more inclined towards the divided yield value of $7.71.

But I will stick with the blended average of the dividend yield and PE value assessment which gives ($7.71 + $7.15) / 2 = $7.43 is my upgraded target price for HLG

Disc: I have recently added more.

Beagle my friend - you have an uncanny ability to move the market, either that or your timing is impeccable! When i see you post my eyes read "Bugle" not "Beagle" Keep up the good work!:t_up:

[dameofdiv]

I may be wrong but I think percy's issue with leases is around the contingent liability that they pose, eg will they be enforced - rentals charged - on premises closed during lockdown; will rental reductions be allowed; can lease liabilities be excused or avoided? I have the same issues.
Ah, of course, i think you are right about what percy meant by the leases. And yes, the enforceable contingent liability is worrying.
I've been looking at so many accounts with the new lease standards so I thought he meant that.

[Beagle]

Thanks Jimdog31. I've been following this one for many years and nearly fell off my chair yesterday when I saw they had just on $50m cash on their books at balance date....nothing anywhere remotely like that in previous years

On the new accounting for leases thing, yeah I think it's a pain in the backside too so I just ignore it. With HLG that's really simple because they have no debt and the balance sheet is super easy to understand. They've always had leases since Adam was a boy...just a stupid new accounting standard that might cause concern for some people but others look right through the complete nonsense of it all to see the real gold within, $50 million dollars of it :t_up: :t_up:

"Cash flow is the lifeblood of business, always has been, always will be" (Beagle)

[nztx]

Thanks mate. I've been following this one for many years and nearly fell off my chair yesterday when I saw they had just on $50m cash on their books at balance date....nothing anywhere remotely like that in previous years

On the new accounting for leases thing, yeah I think it's a pain in the backside too so I just ignore it. With HLG that's really simple because they have no debt and balance sheet is super easy to understand.

Agree on this Accountant's 'Contingent Leases" Nonsense with you & percy

Some strength in HLG SP today -- 572/576 buy/sell in past 20 mins .. goal posts are moving north

Have a considerable HLG weighting here .. north of 20% which I'm comfortable with

[King1212]

Been following uncle Jarden many times..so far never disappointing me... Freightway, Hlg....kogan....all got me rich...the latest one was pph....but was too busy n missed out

Also following master Beagle....also made money... thanks master!

[sb9]

Looks on course to $6 handle very soon and may be $7 handle just in time for Divvy to be paid in Dec.

[jimdog31]

Been following uncle Jarden many times..so far never disappointing me... Freightway, Hlg....kogan....all got me rich...the latest one was pph....but was too busy n missed out

Also following master Beagle....also made money... thanks master!

Im with direct broking does that mean I can access Jarden commentary also? I cant seem to find where?

[King1212]

Not sure...they sent out summary email every month....to my email. I did not pay for it... maybe my ac has heaps of zero at the back...lol

Don't worry..just follow master Beagle....u be okay!

[percy]

I may be wrong but I think percy's issue with leases is around the contingent liability that they pose, eg will they be enforced - rentals charged - on premises closed during lockdown; will rental reductions be allowed; can lease liabilities be excused or avoided? I have the same issues.

Yes correct.At this time we do not know what sort of arrangements tenants will make with landlords.not just for lockdowns but ongoing .
I read some landlords are working with tenants,some are not.In one ChCh mall it depends on your lease.Some leases have a clause that will help tenants through Covid 19, while other leases do not .Those without that clause are expected to "honour" their lease.[ie pay up]
Some malls may never see pre Covid 19 foot traffic,so ongoing rent relief will be reguired.However, that may be easier said than done.So leases are an ongoing area of concern.
Examples.WHS need to close a number of stores.I expect on the leases that come up for renewal over the next few years ,WHS will be play hard ball with their landlords.
Smiths City Colombo Street's landlord will not look at their rent.Therefore they are moving to Sydenham.
Lovisa which I have followed, failed to come to an arrangement with their Spanish landlords and are closing all their stores in Spain.
Australian newspapers are full of bun fights between tenants and landlords.
30% of HLG's last 6 months of sales were online .This means they can be very selective about where they open new stores,the rental they are prepared to pay and other terms of their leases.Some existing leases may be unsatisfactory.
At this time we are guessing all will be rosy.Investing on guesses is not wise.

[winner69]

Hope HLG got some rent relief from the landlord of their flagship CBD Christchurch store

[percy]

Hope HLG got some rent relief from the landlord of their flagship CBD Christchurch store

"No comment."...................lol

ps.Stories abound about ChCh CBD retailers struggling.

[Beagle]

30% of HLG's last 6 months of sales were online .This means they can be very selective about where they open new stores,the rental they are prepared to pay and other terms of their leases.Some existing leases may be unsatisfactory.


Growth in ecommerce sales was spectacular and is a massive advantage going forward. I haven't factored that into my upgraded valuation yet...probably need to upgrade again sometime in 2021.

[King1212]

That what my initial thoughts..all retailers will consolidate thier business to popular n big malls...close the one that in the town or central...n focus on shops that people tend to visit such as malls...

[percy]

Growth in ecommerce sales was spectacular and is a massive advantage going forward. I haven't factored that into my upgraded valuation yet...probably need to upgrade again sometime in 2021.

The online % of total revenue may decrease as more shops [thinking of Victoria here] re open.Yet I see the value in dollars only in creasing in the future.Covid 19 brought forward online e commerce by between two and five years.
Now I may be wrong, but I take it all those online sales are being serviced out of two centres,one in NZ, and the other in Aussie.[Incredible just two]
From what I learnt from CEO Mary Devine at last year's agm, the big online growth was coming from Glassons in Australia.Now that is the market that counts.[as Aussie landlords have a reputation of being vicious]
I see HLG revenue and margin growth coming from mainly online Aussie sales,which would be very positive..

[Waltzing]

Are investors finally coming to this stock late in the day after reading comments from some of the best retail investors on the NZX. B, C AND P and others.

[percy]

Are investors finally coming to this stock late in the day after reading comments from some of the best retail investors on the NZX. B, C AND P and others.

Just take care.Some or perhaps a lot of issues remain.A few unanswered questions.
Some landlords may not be fair.
Some stores may suffer from less foot traffic,and have to close when their lease expires.[could be 2 to 3 years time].
Rising NZ $ main affect margins.
Ten days sick leave mean instead of three weeks holiday, five weeks off.[can't close the store because percy is on holiday,will have to pay Beagle to come in]

[Beagle]

Just take care.Some or perhaps a lot of issues remain.A few unanswered questions.
Some landlords may not be fair.
Some stores may suffer from less foot traffic,and have to close when their lease expires.[could be 2 to 3 years time].
Rising NZ $ main affect margins.
Ten days sick leave mean instead of three weeks holiday, five weeks off.[can't close the store because percy is on holiday,will have to pay Beagle to come in]

:lol: Now there's a thought...the Beagle helping attractive young women choose sexy new outfits and swimwear for summer...Hmmm, sounds like a really "tough" gig...crickey I'll work for free if you pay for the double dose of my heart pills :lol:
Rising dollar will help importers margins quite a LOT compared to last year ! HLG seem adept at extricating themselves from unprofitable stores...that owners eye of Tim Glasson with 20%, always busy looking after himself and shareholders !

[percy]

:lol: Now there's a thought...the Beagle helping attractive young women choose sexy new outfits and swimwear for summer...crickey I'll work for free if you pay for the double dose of my heart pills :lol:
Rising dollar will help importers margins quite a LOT compared to last year ! HLG seem adept at extricating themselves from unprofitable stores...that owners eye of Tim Glasson with 20%, always busy looking after himself and shareholders !

Whoops.....Should have said should NZ $ fall..
Tim Glasson.Funny watching him at the end of the top table at their agm.Forget the chairman,Tim controlled the meeting.!!!

[winner69]

Just take care.Some or perhaps a lot of issues remain.A few unanswered questions.
Some landlords may not be fair.
Some stores may suffer from less foot traffic,and have to close when their lease expires.[could be 2 to 3 years time].
Rising NZ $ main affect margins.
Ten days sick leave mean instead of three weeks holiday, five weeks off.[can't close the store because percy is on holiday,will have to pay Beagle to come in]

yep, 4 weeks leave / 10 days sick leave (probably) / 10 days family violence leave / extra public holiday .... employers forking out heaps thee days

[nztx]

yep, 4 weeks leave / 10 days sick leave (probably) / 10 days family violence leave / extra public holiday .... employers forking out heaps thee days


you missed the Bonus Extra Loyalty Week for blindly buying cheap Chinese Glitter to sprinkle on her ladyship ;)

[Waltzing]

"Just take care."

"could be 2 to 3 years time"

2 to 3 years!!!

we always sell retail.... the care we take is in our custom software.

Now H&M we should have bought last week.

But we bought Helle Glassons again a few months back. HLG we often buy and we often sell.. It was first purchased by my late father and ACA well over a decade ago.

We would hold but the market just doesnt seem to want to keep the share price where it should be.

futures going down...

[winner69]

Mander in The Herald

Not as enthusiastic and bullish as he usually is

Jeez, what a injudicious use of scaling on HLG gross margin ...makes it look like a disaster and an impending train wreck. You can do better place than that

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12369822

[winner69]

Even though Mander uses a scale on his chart that exaggerates the decline in HLGs margin the impact on the F20 result was $3.4m (negative) ...without that profits would have been up on F19

Not as bad as F19 when declining margins had an adverse impact of $3.8m

For what's it worth historical margins shown in my chart -- maybe a trend of lower margins developing but over time margins have been increasing.

I'll leave it to beagle to mention exchange rate

Only time will tell

[King1212]

Pretty sure they do foreign currency hedging? Great to see the writer mentioned.....HLG has no debts Ever as the writer could remember! Plus Master Beagle said they have $50m cash!

[Beagle]

"It's Hallenstein Glasson's unwavering focus on profitable, steady growth that makes the most difference for investors in the current uncertain world".

Nice concluding remark that beautifully encapsulates the essence of the company.

"Cash flow is the lifeblood of business, always has been and always will be" (Beagle)

[percy]

Thanks again to ChCh City Libraries' Press Reader, I have managed to read Oliver Mander's HLG Weekend Herald article.
As always an excellent article that covers everything,including possible Glsssons expansion in Australia,which I found interesting.Nothing I can add to.

[King1212]

Anyone want the article just Pm me

[Balance]

Pretty sure they do foreign currency hedging? Great to see the writer mentioned.....HLG has no debts Ever as the writer could remember! Plus Master Beagle said they have $50m cash!

Not quite right - actually $49.6m 😜

[King1212]

400k is mine share top up..lol

[dibble]

I agree, Beagle. But it's the perception that matters.

I wish that were the case but I suspect it will blow over. Perhaps we can thank Trump (at least in part) for making blow-over-ability a new (and for me highly unsavoury) fundament for tactics. I cant see clothes punters turning their noses up at the door because of that and investors will just see it as free money given the business is solid. May be a risk of a massively influential group mounting some sort of wage subsidy boycott movement, but even that would only last until the next big talking point, e.g. Greenland melting (HLG wetsuits?).

[winner69]

Looking through the financials it appears as they might have received a few million in rent relief during Covid

Good eh

[Oliver Mander]

Even though Mander uses a scale on his chart that exaggerates the decline in HLGs margin the impact on the F20 result was $3.4m (negative) ...without that profits would have been up on F19

Not as bad as F19 when declining margins had an adverse impact of $3.8m

For what's it worth historical margins shown in my chart -- maybe a trend of lower margins developing but over time margins have been increasing.

I'll leave it to beagle to mention exchange rate

Only time will tell

Not my scale :-)! The NZH do the graphics...I should have mentioned the longer term trend though.
I think you've picked up the point I was trying to make - there is a margin impact between F19 and F20.
Interesting you didn't see it as bullish...bit of a worry! Part of the message should have been its a great stock to hold in these current times...I think they've done a stellar job on their business.

[winner69]

Not my scale :-)! The NZH do the graphics...I should have mentioned the longer term trend though.
I think you've picked up the point I was trying to make - there is a margin impact between F19 and F20.
Interesting you didn't see it as bullish...bit of a worry! Part of the message should have been its a great stock to hold in these current times...I think they've done a stellar job on their business.

Suppose doing opinion pieces for the general populus does mean one needs to be more ‘general’ and less detailed otherwise they’d not read through to the end. Levels of concentration are falling I’m told

But in opinion pieces the ‘columnist’ is allowed to get excited and say what you said as great stock to hold’ and ‘done a stellar job’

That margin decline is a bit of a worry and not just for F29 but in F19 as well. As I said above the impacts on profit have been significant - $3.8m in F19 and $3.4m in F20 - a real drag on profit growth after the stellar F18 year. Wouldn’t want to see another $3m to $4m hit this year would we

Somebody mentioned the exchange rate doesn’t matter as they are hedged. However worth recalling that the low margin in F16 (see my chart above (or below) was because of hedging going the wrong way and costing them heaps. Hedging not always favourable.....and what was the share price at the end of 2016/2017.

Mr Mander ...I look forward to your column on Oceania

[Habits]

Not my scale :-)! The NZH do the graphics...I should have mentioned the longer term trend though.
I think you've picked up the point I was trying to make - there is a margin impact between F19 and F20.
Interesting you didn't see it as bullish...bit of a worry! Part of the message should have been its a great stock to hold in these current times...I think they've done a stellar job on their business.

You made the tortoise v hare contrast in the article (btw great article) between HLG and KMD. Clearly HLG was the winner over the last ten years even it had a low compound growth rate. Looking forward I would be interested to know what's your gutfeel pick. Both are in highly competitive markets.

[Beagle]

Mr Mander ...I look forward to your column on Oceania

The resident top gun team are on standby for free consultation regarding this, no vested interest whatsoever :D Not an easy one to understand at all...probably the hardest of any set of accounts from an NZX listed company whereas HLG used to be one of the easiest before the silly new lease accounting standard.

[macduffy]

Somebody mentioned the exchange rate doesn’t matter as they are hedged. However worth recalling that the low margin in F16 (see my chart above (or below) was because of hedging going the wrong way and costing them heaps. Hedging not always favourable.....and what was the share price at the end of 2016/2017.

Very true, Beagle. It's sometimes assumed that hedging FX exposures takes care of the risk. Yes, it does, but there's always the cost of the hedge and sometimes the double whammy of hedging away what would otherwise be a favourable FX trend. I'm sure HLG take good advice in this regard but you can never be sure of the outcome. Not since Muldoon and his "creeping devaluation" regime, that is!

[stoploss]

Very true, Beagle. It's sometimes assumed that hedging FX exposures takes care of the risk. Yes, it does, but there's always the cost of the hedge and sometimes the double whammy of hedging away what would otherwise be a favourable FX trend. I'm sure HLG take good advice in this regard but you can never be sure of the outcome. Not since Muldoon and his "creeping devaluation" regime, that is!
A, good example is AIR NZ , thought they would need x amount of jet fuel , so hedge for that . Then the rest is history .......

[winner69]

Updated some HLG stuff

Always good to see how they make more or less money - is it from selling more or margin changes or less expenses or property sales etc.

Gives on an insight how things are tracking and where things might be heading

Its all the table below

See the impact of declining margins in the last 2 years that Mr Mander was referring to ...and profits from property activities have been quite significant

Another insight is that they've only had two boomer years - both when Di was running the show

To me a that signals a business model/strategy content on generating a decent divie for the big shareholders - rather than growing / world domination. Nothing wrong with that as a strategy

I think its interesting and good fundamental analysis but most of you will think its all a load of the proverbial and rather useless nfo

[winner69]

Beagle mentioned HLG's stockturns the other day

In F20 HLG managed 4.9 stockturns. Pretty good but not as good as they have achieved in the past.

Relative to their peers they are best - Briscoes manage 4.7 turns / Warehouse Group 3.9 turns / Kathmandu a miserable 1.8 turns

But where HLG really excel is that for every $1 of stock they generate nearly $7.00 of Gross Margin. Thats a great return on their investment in stock.

Briscoes manage just over $3 gross margin per $1 of stock / Warehouse Group about $2.00 and Kathmandu about $2.70

Easy to see who has the best cash generating and return on investment model eh ....and they have a business model that seems to run by numbers ....buy something for $1 and sell it for $2.50 and keep expenses to about 46% of sales and hey presto you can give shareholders about 7 cents out of every buck that goes through the cash register as a divie --- year in and year out

Just reinforces my view their main strategic aim is to ensure decent divie every year rather than growth.

Cant complain about that."

[Snow Leopard]

Updated some HLG stuff

Always good to see how they make more or less money - is it from selling more or margin changes or less expenses or property sales etc.

Gives on an insight how things are tracking and where things might be heading

Its all the table below

See the impact of declining margins in the last 2 years that Mr Mander was referring to ...and profits from property activities have been quite significant

Another insight is that they've only had two boomer years - both when Di was running the show

To me a that signals a business model/strategy content on generating a decent divie for the big shareholders - rather than growing / world domination. Nothing wrong with that as a strategy

I think its interesting and good fundamental analysis but most of you will think its all a load of the proverbial and rather useless nfo

Looks like a drunken walk along the path of profitability.
Which would mean a lurch to the downside coming up ;)

Disc: #3 in SL-NZX portfolio

[Beagle]

Classic dividend hounds stock. Super high and reliable fully imputed dividends. What's not to like with interest rates at unprecedented lows and heading lower still.

Looking forward to my 24 cent fully imputed dividend in time for Christmas and another 24 cents in April 2021.

[Waltzing]

If you do get a sell off its a back up the truck... that growth comes from waiting for the sell offs. The dividend is stunning!

[winner69]

A bit more from my HLG files


Numbers at a group level look OK but it’s always interesting to look at profit in each of the segments they report and how that changes over time.

Table shows the change in profit by segment each year for the last few years. Red cells are when profit declines from prior year, green when profits increase.

Main observation is that rarely does HLG ‘fire on all cylinders’. Even Glassons AU didn’t really improve profitability in F19.

A bit of history -



Storm sold during F18
Di got Glassons NZ and AU back on track through F17 and F18 and there’s only been modest profit growth the last 2 years
Hallensteins has seen declining profits in recent years. In spite of things apparently ‘improving’ early in F20 this was one of their worst years for a while.
Property sales / revaluations was main reason for improved group profit in F19 and helped support F20 profitability.



That’s all historical - wonder what the future brings?

[Filthy]

Main observation is that rarely does HLG ‘fire on all cylinders’.

very hard to get your product mix 100% correct. fashion and styles change so fast, that by the time you go from concept & design to manufacture, ship and display items in-store, the customer base has moved onto the next latest trend that their insta influencers are wearing. they do a pretty damn good job though and I would never expect them to nail everything - the clothing market is just not conducive to that sort of thing. great summary though W69!

[peat]

it’s always interesting to look at profit in each of the segments they report and how that changes over time.



Us men need to buy more clothes.

[DazRaz]

Us men need to buy more clothes.

What? The old ones haven't worn out yet!

[Beagle]

Hallensteins profit in FY20 definitely affected by Covid...men less inclined to buy clothes on the internet.

FY21 Year to date sales up ~ 11% with Melbourne and Auckland having been in lockdown. The future looks very promising to me.

[Jantar]

Us men need to buy more clothes. I called into Hallensteins in Blenheim last week to get a couple of nice summer weight jerseys. They had no jerseys in stock at all, just some hoodies, and that is not what I wanted. Went to Farmers and got two nice light weight Merino ones.

I hope the Blenheim store is not indicative of the whole country.

[Getty]

Sadly, it is,
You dont fit their demographic market.
Were you tempted to buy some chino's while you were there?

[peat]

What? The old ones haven't worn out yet!

you are part of the problem buddy! :p

[Getty]

What? The old ones haven't worn out yet!

Yeah, you're supposed to chuck out everything you like & value, and replace it with new gear.

Then, to appease your conscience, get a Greenpeace sticker, to put on the back of your SUV, to show you care for the planet.

Thats what everyone else is doing, especially women.
Well. maybe not you & I.

[Jantar]

No, not tempted at all. I did get some socks though.

Previously the last items I bought there was a bow tie and a pair of braces.

[Getty]

Welcome to the forum ,Peter Dunne.

[winner69]

very hard to get your product mix 100% correct. fashion and styles change so fast, that by the time you go from concept & design to manufacture, ship and display items in-store, the customer base has moved onto the next latest trend that their insta influencers are wearing. they do a pretty damn good job though and I would never expect them to nail everything - the clothing market is just not conducive to that sort of thing. great summary though W69!

Appreciate all that filthy .. tough market to play in.

I was trying to point out that at a brand/geography level the group doesn't often fire on all cylinders

Like F19 Glassons AU had a 13% sales increase but profit was same as F18 but Glassons NZ and a property sale pulled the group through

Still a worry that Hallensteins profit has declined 4 of the last 5 years but recently Glassons saved the day.

Probably a good thing they have 2 brands and operate in 2 countries - a bit of 'diversification' helps ...but just imagine if all segments performed well and they made a bit on property activities .... Beagle might get his 50 cents EPS

[Beagle]

Just a heads-up, Beagle thinks he's going to get his 50 cents earnings easily in FY21 and it ALL going to be paid out as dividends...remember who said it first.

[winner69]

Just a heads-up, Beagle thinks he's going to get his 50 cents earnings easily in FY21 and it ALL going to be paid out as dividends...remember who said it first.

Just keeping in case you change your mind

Mind you I mentioned 50 cents plus before you did :t_up:;)

Must be going to happen then

Just need jeremy to confirm and it’s all honky dory

[winner69]

...and if punters are happy with a 5% yield share price could go to $14

Ok let’s settle for 7% ....share price could go to $10

Stranger things have happened

[Waltzing]

"50 cents earnings easily in FY21 and it ALL going to be paid out as dividends...remember who said it first."

oh... its noted. Does that mean that unlike last time and the time before that we dont sell at above 6 Dollars.

We have noted that on or around each of the tops there were global events occurring or there was a doom and gloom notification of some sort, currency... every retailer from europe turning up . .... US Dollars .... e...c...t


"share price could go to $10"

if we look at the GFC there was a sell off a few years later.. this time everything is running on a shorter time scale.

WHEN? the market has never paid full price for this share.

Its always been discounted and there is nothing to say it will ever be otherwise. In fact at times it might be argued it was an almost 50% discount.