HLG - Hallenstein Glasson

[couta1]

I'd be happy to hold a huge sized position again at $4ish or under but not at current price or above no matter how much enthusiasm, as always with the forum it oscillates between upramping and downramping but the truth lies in the middle somewhere.

[Waltzing]

"$4ish"

bargin....who wont be buying ... in fact thats our price on a small trading and holding position.. it just we did not have a lot to allocate at that time else we would have gone as big as possible without moving the share price else you have to order off market.

Did that man just cut the price? if hes not buying then who?

All the public seems to want to buy AIR!!! the share that going to be years away from profit and no one round the world want to buy an air line expect the new zealand public!!

[Beagle]

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

LOL Not worried about who said it first...very confident it will happen :) Sales up just on 11% year to date suggests we're on track for ~ $320m this year...all at a much better exchange rate than last year and a far cry from the ~ $200m turnover of just a few years ago.

[Waltzing]

well 50 cents? incredible... someone is going to be famous if it transpires as fact... not just famous... a man who sees the future.. it may come to pass! He who walks in the light!

[Snow Leopard]

....it oscillates between upramping and downramping....

That's BBB (Beagle's Boisterous Barking) for you :p

[winner69]

LOL Not worried about who said it first...very confident it will happen :) Sales up just on 11% year to date suggests we're on track for ~ $320m this year...all at a much better exchange rate than last year and a far cry from the ~ $200m turnover of just a few years ago.

Jeez - my abacus says $320m sales at 59% GM and controlled expenses gives EPS of 63 cents

[tim23]

...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

Assume you mean a gross yield?

[Beagle]

That's BBB (Beagle's Boisterous Barking) for you :p
lol. Sometimes the price might be a little bit affected by SSS (Snowcat's Serious Sledging) :p


Jeez - my abacus says $320m sales at 59% GM and controlled expenses gives EPS of 63 cents
Online sales are such a high percentage now, (30%) maybe expenses will be well controlled ?

[Waltzing]

"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"

is this based on low interest rates?

i would like to undertake a comparison of DIV to EPS over the last decade..

Im not convinced this share will move to such highs based on div %

[Cyclical]

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

Exactly what I was thinking and probably has a lot to do with this company's continued success...steady as she goes. Maybe the men's part does need some work, but I reckon we'll see some of the weaker competition fall to the wayside in these tough times which will ultimately see some more of those cylinders firing up for HLG...

[Waltzing]

What time frame are some of these "Goldielocks" company performance supposed to materialise. 10 dollars? Even when this stock has paid out high divs/eps the share price has not stayed at a peak for any length of time. Its true a global event occurred at the same time knocking its performance but at no time has retail ever been priced without a risk discount.

[Balance]

What time frame are some of these "Goldielocks" company performance supposed to materialise. 10 dollars? Even when this stock has paid out high divs/eps the share price has not stayed at a peak for any length of time. Its true a global event occurred at the same time knocking its performance but at no time has retail ever been priced without a risk discount.

The one big change from previous economic and valuation settings today is of course the unprecedented drop in interest rates.

Change that variable in your valuation calculations (cost of capital, dividend yield etc) and $6 ceiling of old for HLG is not a real barrier anymore - as long as the company can maintain earnings growth and pay dividends.

[Beagle]

The one big change from previous economic and valuation settings today is of course the unprecedented drop in interest rates.

Change that variable in your valuation calculations (cost of capital, dividend yield etc) and $6 ceiling of old for HLG is not a real barrier anymore - as long as the company can maintain earnings growth and pay dividends.

I think this is a very valuable point that is being lost of some investors hoping to see $4 again and treating this as a pure cyclical.
Firstly on the pure cyclical thing, that simply isn't supported by the numbers. There is real growth here, just have a look at the last 3 years profitability and turnover compared with the 3 before that. As I was saying yesterday, this company is heading for ~ $320m in sales in FY21 which is up substantially from the ~ $200m turnover of just a few years ago. It is abundantly clear that there is real brand power and growth in the Glassons brand, especially across the Tasman.

Any attempt to put a fair value on HLG today must in my opinion factor in the growth in recent years, supported by strong growth in sales of circa 11% year to date in FY21 even under lockdown conditions compared to no lockdown and nobody had ever heard of covid this time last year..
For anyone to try and make the contention HLG is not growing...I think they have their head in the sand but if people want to be silly, that's on them.

Next one needs to consider the financial advantage of the strong growth in online sales, up 80% in 2H FY20...very similar to Nike's strong growth in online sales, (which was warmly welcomed and responded to on the US markets). Its clear Glassons has genuine brand power which augers extremely well for the future.

Next we look at valuation as a function of where interest rates are. Fact is the 10 Govt stock year risk free rate yesterday was just 0.55% which is dramatically changed since before the Covid crisis. Ben Graham used to say a PE of 8.5 was right for a no growth company when the risk free rate was 4.0%. I would argue with risk free interest rates where they are now, just on 3.5% lower a fair PE for a no growth stock is now 12. (Earnings yield of 8.3% which approximates 0.55% risk free rate, 4.5% market risk premium and around a 2.3% sector / stock premium.

The market is saying Briscoes is worth a PE of 14.3 and is growing slower than HLG. I think a market PE of at least this figure is relevant for HLG. If they can do 50+ cents eps this year and I think they can, we should see north of $7 next year as well as 24 cents in fully imputed dividend in December and about the same in April 2021.

What's possible ? I think they could do circa mid 50 cents eps next year all going well and the market might respect HLG enough to them accord them with a PE of 15.
15 x 55 cps = $8.25.

[Waltzing]

"Change that variable in your valuation calculations (cost of capital, dividend yield etc) and $6 ceiling of old for HLG is not a real barrier anymore - as long as the company can maintain earnings growth and pay dividends."

i think that is the thoughts that we are wondering about. It has certainly increased the share price of other stocks but this stock has always had a big RIR factor, Retail Investor Risk factor.

"I think this is a very valuable point that is being lost of some investors hoping to see $4 again and treating this as a pure cyclical.
Firstly on the pure cyclical thing, that simply isn't supported by the numbers. "

and certainly in and after the GFC they continued to pay a good dividend with no or next to nothing debt.

Retail is Supppposed to be Cyclical..But as Keys has said it much bigger then then the GFC with bigger deficits.

We havnt yet seen the impact of this crisis in year on year GDP or in where the chips will fall. We only know its air lines and tourism but there must be other sectors.

However government stimulus has held the threads of society together and rural NZ has had agricultural sectors that have had some good returns.

Time to whatch the stats again on sectors and especially retail and credit card spending.

The aussi finance minister is on CNBC today. The Aussi patch is important for this stock.

As i have said before this professional ACA is shining a light...

" Ben Graham used to say a PE of 8.5 was right for a no growth company when the risk free rate was 4.0%. "

Where are these investors that will drive the price to 7 dollars? I dont think all those TD holders will want to risk there money on RIR stocks when they can buy ARG or take a punt on OCA and the man of light has highlighted the possible gains to be made there.

Sometime earning a reputation for accurate FA can mean the smart money will start to follow that advise but risk money on retail? Maybe they will split that valuable TD over a number of stocks with there Financial Advisors. I dont see them running to the market and throwing that money around like its a party stock like sky city and everyone fully vested.

But there are so few shares for sale the DIV might make them very carefully consider the buy here and slowly over time the share price may bang up to 7 and over by march.

But will the silly "SA" investor take any notice.. they are still buying AIR!

and "Briscoes" is appliances not shirts and thread stuff.. ever whatched the making Harris Tweed? You wont buy it at HLG. Well i dont think so anyway maybe they might order something for you !

[Beagle]

Glassons has the X Factor mate. Watch and see what happens. While watching I will be enjoying my estimated 50 cents per share per annum in fully imputed dividends.
Rumor has it that many of the senior staff are very cool people and could be models themselves. "Since time began sex and sexy sells" a fact not lost on HLG staff as you can see from their website
https://www.glassons.com/
Time for yet another think about Maslow's hierarchy of needs https://en.m.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needs#/media/File%3AMaslow's_Hierarchy_of_Needs2.svg
Level 3 - Everyone wants friends...translated to modern day language for this digital generation where most are on fakebook, (deliberately misspelled), Instagram, Tik Tok and other social media platforms, most people want to look good, be liked, fit in with their peer group and have lots of connections as well as having close friends. Glassons plays directly into those needs with their cool gear. (I knew that psychology stuff an Uni would be useful one day...)

What will propel it to $7+ ?. Earnings and dividend yield, you'll see mate.

[iceman]

HLG, Briscoes and others being discussed on Magic Talk this afternoon and many outraged listeners voicing their anger and suggesting boycotts at companies taking the wage subsidy while making decent profits and paying dividends. HLG is very guilty on this front and personally I think it is morally wrong.

[winner69]

Working Style probably been a thorn in Hallensteins side for a few years but they have co-existed ..maybe target market a bit different

Now Working Style Woman on the way

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12370631

No worries for Glassons - they don’t have X factor ....but they know what they sell clothes for - “Like all good tales of New Zealand ingenuity, the Working Style story revolves around satisfying a basic human need: the need to have a sartorial edge over your fellow man.”

[daveoi]

nobody else seems to have noticed Glassons have launched a US website? Maybe it's not just COVID increasing online sales...

*edit* removed screenshot image that didn't work - it was of the Glassons Footer, select country, showing NZ, Aus, and US*

[couta1]

HLG, Briscoes and others being discussed on Magic Talk this afternoon and many outraged listeners voicing their anger and suggesting boycotts at companies taking the wage subsidy while making decent profits and paying dividends. HLG is very guilty on this front and personally I think it is morally wrong. Yes I agree.

[Filthy]

HLG, Briscoes and others being discussed on Magic Talk this afternoon and many outraged listeners voicing their anger and suggesting boycotts at companies taking the wage subsidy while making decent profits and paying dividends. HLG is very guilty on this front and personally I think it is morally wrong.

One thing I am grappling with is who should actually be expected to pay for Covid? Employees (job losses, reduced hours, salary cuts), Companies (retail shareholders, institutions, kiwisaver), the Government (tax payers, future generations), or 'Other' (i.e. the rich, overseas companies, capital gains). My guess is that there are a lot of retirees who rely on those dividends for their spending income and it might have an economic flow-on effect if that tap was completely turned off or heavily reduced. I also wonder how many other unlisted businesses (big and small) have done the same - and the media are just picking on a couple of well known brands from the NZX to get website clicks. Although, I agree iceman, optically, its not a great look!!!!

https://www.stuff.co.nz/business/industries/122972883/accounting-professor-singles-out-nzx-companies-which-morally-shouldnt-have-taken-wage-subsidy

[Balance]

HLG, Briscoes and others being discussed on Magic Talk this afternoon and many outraged listeners voicing their anger and suggesting boycotts at companies taking the wage subsidy while making decent profits and paying dividends. HLG is very guilty on this front and personally I think it is morally wrong.

So let's review what happened, shall we?

The wage subsidy was made available to ALL companies based upon the criteria * below - so that employers and companies KEPT staff on, while still paying the staff Kiwisaver, ACC and holiday pay etc.

Nobody knew at that time how grave the downturn was going to be and how bad things were going to get.

But almost all non-essential companies met the criteria * because the lockdown resulted in many instances 100% drop in revenues, let alone 30% drop in revenues.

Some companies have gone into receivership, even after receiving the subsidy while some others like Briscoe & Hallenstein, because they are very well managed, have somewhat recovered the loss in revenues and profits due to the lockdowns.

What the 'outraged' listeners are effectively saying is that :

1. If a company or employer loses money and goes broke, and their employees lose their jobs - then that's okay for said companies to get the wage subsidy.

2. If a company manages to do well and keeps all their staff, then said companies are at fault?

I say to the 'outraged' listeners : Get ... and Get a life! You are going to reward losers but punish winners?

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

* Criteria :

"Your business has experienced a minimum 30% decline in actual or predicted revenue:

over the period of any month from January 2020 through to the end of this scheme when compared to the same month last year, or a reasonably equivalent month for any business operating less than a year;

and

that loss is attributable to the COVID-19 outbreak;

and

your business has taken active steps to mitigate the impact of COVID-19 on their business activities (such as engaged with your bank, Chamber of Commerce, industry association or the Regional Business Partner programme);

and

you agree you will, using best endeavours, retain the employees named in your application in employment on at least 80 percent of their regular income for the period of the subsidy."

[Beagle]

HLG, Briscoes and others being discussed on Magic Talk this afternoon and many outraged listeners voicing their anger and suggesting boycotts at companies taking the wage subsidy while making decent profits and paying dividends. HLG is very guilty on this front and personally I think it is morally wrong.

I disagree. HLG had to close their stores in Australia and New Zealand for an extended period of time. The wage subsidy was set up to keep employees in work which is what HLG used it for and I note their profits in 2H were well down on last year. If their profits increased in 2H FY20 compared to 2H FY19 there could be some moral dilemma that the spirit of the wage subsidy system had been breeched but the way I see it is HLG were well and truly entitled to claim the wage subsidy.

I'd go further and say good on HLG for taking the wage subsidy and keeping people in work when it clearly cost them money to do so, despite the wage subsidy reimbursing some of their costs.

[Balance]

I disagree. HLG had to close their stores in Australia and New Zealand for an extended period of time. The wage subsidy was set up to keep employees in work which is what HLG used it for and I note their profits in 2H were well down on last year. If their profits increased in 2H FY20 compared to 2H FY19 there could be some moral dilemma that the spirit of the wage subsidy system had been breeched but the way I see it is HLG were well and truly entitled to claim the wage subsidy.

I'd go further and say good on HLG for taking the wage subsidy and keeping people in work when it clearly cost them money to do so, despite the wage subsidy reimbursing some of their costs.

Exactly, Beagle - The Labour Government set the rules and now, we have Labourites fanning hatred against companies which managed to ride through the crisis & deliver returns for their shareholders - go figure 1.

Meanwhile, the PM is still defending the $12m to the private '$28,000 a year school fees' Green School as appropriate. Go figure 2.

[Waltzing]

"launched a US website"

Really no ! well i am frankly surprised they survived in AUS. NO surely they wont try and open a store in the US? no surely not! Id be absolutely thrilled for them if they managed to move beyond the south pacific!

From the man who walks in the light...

"What will propel it to $7+ ?. Earnings and dividend yield, you'll see mate."

well we might just have to hold!

The wage sub was required and HLG is the right sort of company to take that and keep it.

[iceman]

I disagree. HLG had to close their stores in Australia and New Zealand for an extended period of time. The wage subsidy was set up to keep employees in work which is what HLG used it for and I note their profits in 2H were well down on last year. If their profits increased in 2H FY20 compared to 2H FY19 there could be some moral dilemma that the spirit of the wage subsidy system had been breeched but the way I see it is HLG were well and truly entitled to claim the wage subsidy.

I'd go further and say good on HLG for taking the wage subsidy and keeping people in work when it clearly cost them money to do so, despite the wage subsidy reimbursing some of their costs.

Far enough but we will agree to disagree. I just want to be clear that I am not saying they did anything wrong and it most certainly is not limited to HLG. Far from it. I just find it morally reprehensible to keep the subsidy while paying out large dividends. But fully understand not everyone will agree.

[Balance]

Anyway, I am picking HLG's sp to be $6.50 to at least on 16 October 2020.

You guys will have to figure out for yourself what is likely to happen next week to drive the sp to that level!

It's actually quite obvious!

[Beagle]

Anyway, I am picking HLG's sp to be $6.50 to at least on 16 October 2020.

You guys will have to figure out for yourself what is likely to happen next week to drive the sp to that level!

It's actually quite obvious!

I'm going to take the bait..come on, spill the beans.

[Jantar]

HLG, Briscoes and others being discussed on Magic Talk this afternoon and many outraged listeners voicing their anger and suggesting boycotts at companies taking the wage subsidy while making decent profits and paying dividends. HLG is very guilty on this front and personally I think it is morally wrong.
When the lockdown first occurred no-one knew how long it would go on for. The purpose of the subsidy was to keep staff employed.

Would you have been happier in HLG did not take the subsidy and instead chose to lay off most retail staff, hoping to re-employ them after the lockdown ended?

[iceman]

When the lockdown first occurred no-one knew how long it would go on for. The purpose of the subsidy was to keep staff employed.

Would you have been happier in HLG did not take the subsidy and instead chose to lay off most retail staff, hoping to re-employ them after the lockdown ended?

I was very happy with Silver Fern Farms (one of my largest holdings) taking the subsidy but when things turned out better than expected, they paid it back in full before announcing dividends.

[couta1]

When the lockdown first occurred no-one knew how long it would go on for. The purpose of the subsidy was to keep staff employed.

Would you have been happier in HLG did not take the subsidy and instead chose to lay off most retail staff, hoping to re-employ them after the lockdown ended? I think its more about paying it back once your books show that you weren't down the specified percentages as set out in the criteria, many companies did pay it back and at the end of the day its taxpayers money(Whoops didn't see your post iceman)

[Jantar]

I was very happy with Silver Fern Farms (one of my largest holdings) taking the subsidy but when things turned out better than expected, they paid it back in full before announcing dividends. Silver Fern Farms did not have to close their doors during the lockdown. As a food processor and supplier they were able to continue almost as usual. Hence they did not meet the criterium of a 30% loss in revenue for that month and would have had to pay it back in due course anyway.

[ba9]

Absolutely agree that it was morally wrong for any company to take the wage subsidy when it wasn't required. I think everyone just applied for it because they fit into the criteria. This was nothing more than a handout in need.

[Balance]

I was very happy with Silver Fern Farms (one of my largest holdings) taking the subsidy but when things turned out better than expected, they paid it back in full before announcing dividends.


Silver Fern Farms did not have to close their doors during the lockdown. As a food processor and supplier they were able to continue almost as usual. Hence they did not meet the criterium of a 30% loss in revenue for that month and would have had to pay it back in due course anyway.

Exactly right, Jantar.

Silver Fern Farms - an essential industry which operated right through the lockdowns & enjoyed record revenues via export sales.

They repaid because their revenues were intact and did not drop 30%.

Alliance Meats only repaid half their wage subsidy because they did suffer revenue drop.

[Beagle]

When the lockdown first occurred no-one knew how long it would go on for. The purpose of the subsidy was to keep staff employed.

Would you have been happier in HLG did not take the subsidy and instead chose to lay off most retail staff, hoping to re-employ them after the lockdown ended?

Exactly. The moral outrage is misplaced. Nobody knew how long the crisis would go on for. Hindsight is 20/20 and its very easy to look back now and make moral judgement calls expecting the directors to have had perfect foresight in the midst of the Covid lockdown.

The fact is the Directors postponed the interim dividend due in April 2020, (a first for them as they paid dividends throughout the GFC) so they obviously viewed the lockdown at that time as extremely serious. HLG appears to have often had to pay rent for shuttered stores and pay employees their full wages. I reiterate that the wage subsidy only covered some of their employees costs, (exactly the ones the Govt mandated that should be covered).

[Balance]

I'm going to take the bait..come on, spill the beans.

Read your PM - decipher and decide!

Disclosure of interest - bought more today.

[winner69]

Anyway, I am picking HLG's sp to be $6.50 to at least on 16 October 2020.

You guys will have to figure out for yourself what is likely to happen next week to drive the sp to that level!

It's actually quite obvious!



Huge result from WHS on Thursday ...WHS shareprice zooms up .....and HLG follow suit

[Beagle]

Read your PM - decipher and decide!

Disclosure of interest - bought more today.

Hmmm...disclosure...I bought some more today too. Some information is too good to share, just buy before others do :D

[850man]

Hmmm...disclosure...I bought some more today too. Some information is too good to share, just buy before others do :D

Ramping gentlemen?

[sb9]

Ramping gentlemen?

That should help it through $6 mark for the day :p

[Waltzing]

Well sales might be up but did sales increase because people were sitting at home with nothing to do with Sub in the bank and thought great ill buy some more clothes on special discount prices? Next trading update will be the one to whatch.

[winner69]

Well sales might be up but did sales increase because people were sitting at home with nothing to do with Sub in the bank and thought great ill buy some more clothes on special discount prices? Next trading update will be the one to whatch.

Next update due early December

Just imagine what would happen to the share price if the +10% sales increase for Aug/Sep has increased to 15% for August/November

[winner69]

Really had to update this chart with latest share price and profit forecasts

Had to increase the scale to fit in expected shareprice of 750 to 800 :t_up:


And dancing man ...the whole chart is trending up .... highs are higher and lows are higher

[BlackPeter]

HLG, Briscoes and others being discussed on Magic Talk this afternoon and many outraged listeners voicing their anger and suggesting boycotts at companies taking the wage subsidy while making decent profits and paying dividends. HLG is very guilty on this front and personally I think it is morally wrong.

Agree, but admittedly I have (as non holder but tax payer) a conflict of interest.

Obviously - you could argue as well that the board is required to maximise shareholder returns - not taking free money from the taxpayer might be a violation of their duties to the shareholders? I am sure they did follow all the rules and guidelines.

Difficult ...

[winner69]

Aussie budget will see Glassons sales rocket ....tax cuts and all that boost retail spending big time

Glassonss AU disappointed of late but f21 will be the star of the Group stable.

[Beagle]

Really had to update this chart with latest share price and profit forecasts

Had to increase the scale to fit in expected shareprice of 750 to 800 :t_up:


And dancing man ...the whole chart is trending up .... highs are higher and lows are higher

Thanks Winner. The situation makes a lot of sense when you look at a 15 year chart like that, good work mate, much appreciated.

[Waltzing]

We look forward to the next market update. many thanks to the information published here by retail investors and financial professionals.

Those sell offs also had major global events in the background at each of them or other events, currency, gfc, retail pressure from global suppliers opening shops ect.

Yes the aussi budget even push the banks up and takes some doing..

[Waltzing]

6 dollars..

[Balance]

6 dollars..

Resistance at $6 very strong.

Wait for next week for decisive move above $6.00.

[sb9]

Resistance at $6 very strong.

Wait for next week for decisive move above $6.00.

C'mon, spill the beans for us....;)

[Beagle]

I have a long standing investment approach which looks at the yield in the medium term based on the net invested capital now. You won't read about it in any investment handbook, its my personal approach which I have found extremely rewarding over many years.

In a nutshell I look at the medium term and consider the sustainable dividend yield based on the net price of the share to me after treating any share trading cum dividend as if the near term dividend receivable is a partial return of my initial purchase price. In this day and age of almost zero interest rates even a 2 month delay in the final dividend for FY20 can be treated this way. My underlying thinking with this revolves around the fact that for any new shares purchased now I was not a shareholder in FY20 so am not really entitled to consider any dividend from that year as a dividend per se, its simply a partial return of my invested capital for FY21 and beyond dividends.

I find it very useful to distill my true medium term yield in this way because it drills down into the real essence of the medium to long term investment case.

The net investment at $6.00, looking at the yield for FY21 and beyond is thus $6.00 less the 24 cent fully imputed dividend due in December = $5.76.

My assessment as recently shared is I think they can pay fully imputed dividends in the foreseeable future at ~ 50 cents per annum so for FY21 and beyond my forward yield calculation is as follows. 50 cents fully imputed = 50 / 0.72 = 69.44 cps gross inclusive of imputation credits. My net purchase price above after adding back the cum dividend part of the purchase price at $6 is $5.76.

The gross yield to me for FY21 and beyond is thus 69.44 / 576 = 12.06% Gross Yield.

Whether you think my approach is technically correct or not, that's how I do my dividend hunting and I will stick with it because I know it works :)

[Waltzing]

yes balance.. with such small volumns ... making me kick myself for not buying big HM.... and converting to euros after the trade... big mistake... never mind... next global crisis...

hang on as i posted the ACA pro came on to make sure the local lucky country (not AUS) COVID free at almost any price... understands that they should pay a lot more for this well run company...

C={deleted}... look good to me...

[Beagle]

I have a long standing investment approach which looks at the yield in the medium term based on the net invested capital now. You won't read about it in any investment handbook, its my personal approach which I have found extremely rewarding over many years.

In a nutshell I look at the medium term and consider the sustainable dividend yield based on the net price of the share to me after treating any share trading cum dividend as if the near term dividend receivable is a partial return of my initial purchase price. In this day and age of almost zero interest rates even a 2 month delay in the final dividend for FY20 can be treated this way. My underlying thinking with this revolves around the fact that for any new shares purchased now I was not a shareholder in FY20 so am not really entitled to consider any dividend from that year as a dividend per se, its simply a partial return of my invested capital for FY21 and beyond dividends.

I find it very useful to distill my true medium term yield in this way because it drills down into the real essence of the medium to long term investment case.

The net investment at $6.00, looking at the yield for FY21 and beyond is thus $6.00 less the 24 cent fully imputed dividend due in December = $5.76.

My assessment as recently shared is I think they can pay fully imputed dividends in the foreseeable future at ~ 50 cents per annum so for FY21 and beyond my forward yield calculation is as follows. 50 cents fully imputed = 50 / 0.72 = 69.44 cps gross inclusive of imputation credits. My net purchase price above after adding back the cum dividend part of the purchase price at $6 is $5.76.

The gross yield to me for FY21 and beyond is thus 69.44 / 576 = 12.06% Gross Yield.

Whether you think my approach is technically correct or not, that's how I do my dividend hunting and I will stick with it because I know it works :)

Just wanted to add, where else are you going to get a 12% gross yield ?

[macduffy]

Thanks for sharing that, Beagle, your system has worked well for you. But like any approach to investing, it relies on making an educated guess as to future conditions, both company specific and for business generally. I think that's where the "edge" lies.

:)

[Balance]

Just wanted to add, where else are you going to get a 12% gross yield ?

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12371175

Negative interest rates in November?

Watch part of the $250 billion in NZ bank deposits move into high yielding stocks on the NZX!

[Waltzing]

"balance may indeed see his 7 and over"

money already flowing into property as in retirement , arg, gmt and others..even sky city moving up and it should be one of the last to recover ahead of tourism , banks and lastly air lines.

[dibble]

Just wanted to add, where else are you going to get a 12% gross yield ?

Run with what suits of course. But for something a little less opaque, for those who havent played with it, IRR in Excel takes timing into account. Just use 60 periods for 5 years instead of 5 periods, throw your $6 (and brokerage) outlay into period 1, do what you like with tax and plug in your expected divs over the other 59 periods. I imagine the answer wont differ enough to worry your bank manager tho.

[Beagle]

Run with what suits of course. But for something a little less opaque, for those who havent played with it, IRR in Excel takes timing into account. Just use 60 periods for 5 years instead of 5 periods, throw your $6 (and brokerage) outlay into period 1, do what you like with tax and plug in your expected divs over the other 59 periods. I imagine the answer wont differ enough to worry your bank manager tho.

If its a BNZ manager they'll be happy to offer you a term deposit with a return of a maximum of 1.05%, (not a typo) instead :eek2:

[Balance]

If its a BNZ manager they'll be happy to offer you a term deposit with a return of a maximum of 1.05%, (not a typo) instead :eek2:

https://www.rbnz.govt.nz/statistics/s40-banks-liabilities-deposits-by-sector

$257 billion of NZers' funds in savings & term deposits at end of August per stats from RBNZ above.

Just 10% of that diverted to the NZX high yielding stocks - think of where stock prices are going to go to!

[Beagle]

https://www.rbnz.govt.nz/statistics/s40-banks-liabilities-deposits-by-sector

$257 billion of NZers' funds in savings & term deposits at end of August per stats from RBNZ above.

Just 10% of that diverted to the NZX high yielding stocks - think of where stock prices are going to go to!

50 cents fully imputed gibes 69.44 cps gross.
My goodness...$6.94 still gives 10% gross yield in HLG...maybe people will be quite happy with 8% gross yield which suggests $8.68 isn't out of the question and what happens if Glassons keeps growing and dividends increase in future years...oh my goodness.

[Cyclical]

https://www.rbnz.govt.nz/statistics/s40-banks-liabilities-deposits-by-sector

$257 billion of NZers' funds in savings & term deposits at end of August per stats from RBNZ above.

Just 10% of that diverted to the NZX high yielding stocks - think of where stock prices are going to go to!


50 cents fully imputed gibes 69.44 cps gross.
My goodness...$6.94 still gives 10% gross yield in HLG...maybe people will be quite happy with 8% gross yield which suggests $8.68 isn't out of the question and what happens if Glassons keeps growing and dividends increase in future years...oh my goodness.

Yep, and if we see $25b redirected towards the sharemarket, presumably there needs to be $25b worth of sales on the other side of the ledger, but really how many people want to be selling out atm? Which means huge upward pressure I would have thought.

[winner69]

Yep, and if we see $25b redirected towards the sharemarket, presumably there needs to be $25b worth of sales on the other side of the ledger, but really how many people want to be selling out atm? Which means huge upward pressure I would have thought.

Market cap only $175 billion so $25 billion new a lot

Where does the money coming out go to?

[Filthy]

Where does the money coming out go to?

I always thought it went to build new decks?

[Waltzing]

Allotments and share performance schemes - good time to cap raise a bit more. This is when you sell down those performance shares.

NZD - USD might move to HLG advantage over the next 2 years and the amount of money the FED and the Treasury , must provide is starting to awaken comments of a USD revaluing on the business talk shows.

[Cyclical]

I always thought it went to build new decks?

Haha, too true. Forestry stocks is where it's at ;)

[Cyclical]

NZD - USD might move to HLG advantage over the next 2 years and the amount of money the FED and the Treasury , must provide is starting to awaken comments of a USD revaluing on the business talk shows.

All countries are in on the same game though, right? No shortage of lolly scramble money here, asset prices going through the roof, minimum wages heading north, rising tide for the rest of us, talk of zero to negative interest rates...it will all serve to water down and keep a lid on the currency. It's not like only a few years back when our higher interest rates relative to our peers made the NZD look attractive (I think the 7th most traded currency or something like that). Probably the key thing making the NZD an attractive haven ATM is our handle on the covid, but we're still going to hurt big because of travel restriction's impact on our GDP (let's not mention the one way travel bubble).

[jg8512]

intrigued by this new director announcement: https://www.nzx.com/announcements/361256
I don't have personal experience of a Hartleys store but is Hartleys a competitor to glassons? And if not, why not?
I'm sure HLG (and Sandi) will have considered all this and it is not a problem ... but interested in on views on why it isn't!
PS. i like the appointment. Adding deep industry experience is a big plus.

[Beagle]

Its crossed my mind with HLG's cash mountain there could be an eps accretive acquisition coming up ! Could this appointment be a prelude to that ?
Other than that I would think there might be appropriate non competition and non disclosure clauses included within the terms of this new appointment. I think we can very comfortably rely On Tim Glasson's judgement in this area with his 20% stake in the company.

[Cyclical]

Its crossed my mind with HLG's cash mountain there could be an eps accretive acquisition coming up ! Could this appointment be a prelude to that ?

Hmm, that's an interesting concept you've sniffed out there, Beagle...could light another rocket under the SP :D We've probably been lulled into a sense of steady as she goes with HLG, but maybe this is the time to consider cash pile / cheap debt fueled growth by acquisition.

[macduffy]

A quick look at Hartley's website gives the impression that they and Glassons would appeal to different markets, rather like Hallensteins and Barkers. Different price points, different clientele.

[Beagle]

C'mon, spill the beans for us....;)


Hmm, that's an interesting concept you've sniffed out there, Beagle...could light another rocket under the SP :D We've probably been lulled into a sense of steady as she goes with HLG, but maybe this is the time to consider cash pile / cheap debt fueled growth by acquisition.

Speaking of rocket's under the share price...I wonder when Balance is going to spill the beans...I am very well positioned in anticipation ;)

[Balance]

Speaking of rocket's under the share price...I wonder when Balance is going to spill the beans...I am very well positioned in anticipation ;)

I am still buying so let's wait for Thursday next week, shall we?

[Beagle]

I am buying so let's wait for Thursday next week, shall we?

My lips are sealed...I know Nothing ! https://www.youtube.com/watch?v=izAqFoLtzKM

[Cyclical]

Speaking of rocket's under the share price...I wonder when Balance is going to spill the beans...I am very well positioned in anticipation ;)


I am still buying so let's wait for Thursday next week, shall we?


My lips are sealed...I know Nothing ! https://www.youtube.com/watch?v=izAqFoLtzKM

You guys are killing me. Still, with HLG making up about 30% of my stack atm, I'm not so poorly positioned myself :t_up:

[Snoopy]

My lips are sealed...I know Nothing !

OK someone has to spill the beans. On the 15th October Jacinda Ardern will announce that all of those entering quarantine in NZ will have to have all their clothes burned to avoid potential contamination and ongoing spread of Covid-19. Now we are entering spring, all quarantining can be done in the nude. This will also improve security by making it more obvious if a detainee escapes. At the end of two weeks detainees will get to rebuild their wardrobe, all paid for by the government, by ordering from NZ's best website equipped clothing retailer. And the company that has won that contract is - drum roil - HLG!

SNOOPY

[Beagle]

LOL how did you guess ;)
I've been sworn to secrecy...all I can say is I bought even more at $6 today.

[Waltzing]

If someone knows something that is board level only? or has someone got an ear to an insider? If MR B is buying we should be all ears? We night be temped to buy some in a portfolio just as a gamble for that would be what it is. A Rumour buy? now that is something professional investors dont usually do.

"I've been sworn to secrecy"

now this really is interesting? im tempted to move some money into a holding company and buy monday.

The actions of the 3 B's, the Brave Brilliant Mr B (a take on the movie Turner , the painter) tell us he really very "BULLISH" on HLG.

[winner69]

If someone knows something that is board level only? or has someone got an ear to an insider? If MR B is buying we should be all ears? We night be temped to buy some in a portfolio just as a gamble for that would be what it is. A Rumour buy? now that is something professional investors dont usually do.

Should always buy on rumours and speculation ....like FOMO eh

[percy]

Just a word of caution.
HLG received rent relief from landlords,what ,or how much we do not know.Some of the Malls HLG are in will not recover their pre Covid 19 foot traffic.
With HLG trading so well, AND paying a divie, I can not see landlords being too generous with on going rent accommodations.
That said, with so many fashion retailers [and many other retailers] in Aussie facing closure, Aussie landlords will look favourably to having Glassons as a tenant.Aussie is where I see HLG growth coming via Glassons.
Generally tougher times see lower margins,and with HLG's major customers, women and youth, being the most affected by a tighter economy, HLG do face headwinds.Just how strong those winds will be I do not know.
Should we see people continuing working from home ,this too should be taken into consideration, as we know it also affects HLG sales.

[winner69]

Just a word of caution.
HLG received rent relief from landlords,what ,or how much we do not know.Some of the Malls HLG are in will not recover their pre Covid 19 foot traffic.
With HLG trading so well, AND paying a divie, I can not see landlords being too generous with on going rent accommodations.
That said, with so many fashion retailers [and many other retailers] in Aussie facing closure, Aussie landlords will look favourably to having Glassons as a tenant.Aussie is where I see HLG growth coming via Glassons.
Generally tougher times see lower margins,and with HLG's major customers, women and youth, being the most affected by a tighter economy, HLG do face headwinds.Just how strong those winds will be I do not know.
Should we see people continuing working from home ,this too should be taken into consideration, as we know it also affects HLG sales.

Reading between the lines and from some of the numbers in the accounts the rent 'relief' in H2 could have been about $4m/$5m

[Beagle]

I think I need to hose down this thing a bit to be fair to others. Balance has shared some information with me because we're mates. Its not inside information, its not board level and the outcome is not certain. He asked me to keep it quiet and i am respecting that request, its up to him when he wants to share. Clearly based on my action yesterday and earlier this week with buying at about $6 I think what might happen that he has shared has its merits but to be absolutely clear I am buying on the compelling fundamental's only and I think trading at $6 cum a fully imputed dividend of 24 cps the market is not yet pricing those fundamental's in for where interest rates are.

Investors should stick to the fundamental's and make their own assessment on HLG based on its merits.
I re-summarize my investment thesis below.
1. The company has demonstrated tremendous resiliency during Covid. This is deeply impressive and was a real surprise to me.
2. It is now clear they have demonstrated real brand power with the Glassons brand with extremely strong growth in online sales.
3. I think the advantage of selling 30% online will be both sticky and will confer a very meaningful advantage going forward. I doubt this is currently being valued by the market. (Online is the holy grail of retail and these guys are very smart with their digital platforms and marketing).
4. Much more favorable exchange rates and lower logistical costs this year,.
5. FY21 year to date sales up 11% compared to last year before anyone had even heard of Covid, frankly I find that remarkable
6. I expect in FY21 HLG will comfortably exceed last years profit, I see 50 cps as a fairly safe forecast with the risk to the upside.
7. That's a forward PE of just 12, (which is a no growth PE so the market is not pricing HLG correctly in my view).
8. With interest rates at 100 year lows, I think a forward PE of 12 is too cheap and this deserves at least the same PE as Briscoes (14.3) which suggests at least $7.15 is fair value
9. Their very strong cash position, ~ $50m as at balance date which is deeply impressive for a company of this size, and with no debt means HLG are well capable of paying all earnings or the vast majority of them out as dividends going forward. This is also supported by an apparent lack of need for any meaningful capex in the current environment with their focus on online sales and having recently completed new distribution center's in both N.Z. and Australia
10. 50 cents fully imputed per annum or very close to that appears sustainable for the foreseeable future given the growth of Glassons.
(whether they do pay the full 50 cents out or not, we can take considerable comfort from Tim Glasson's 20% stake that he has the owners eye, (as Percy calls it) on HLG and whatever they decide it will be in the best interests of shareholders.
11. If they pay all the eps out the shares are on a net basis, (look through the next dividend), HLG are on a 12% gross yield. I think this phenomenal.
12. No debt, excellent stock turn, strongly growing brand with Glassons and potential to turn around Hallensteins to where it used to be.

Better to invest on fundamental's than rumors and that's what I am doing when I'm buying at $6 because at a net price of $5.76, (adding back the dividend receivable shortly), I believe there is deep value remaining with HLG.

Remiss if I didn't mention risks. Yes, absolutely there is a risk of another Covid breakout but they have demonstrated tremendous resiliency with coping with this to date and one must also consider the opposite, that a vaccine might be available next year and then its onward and upward. One also needs to keep in mind there's risks with all stocks.

When I compare the above fundamental's with other opportunities on the NZX I think there's a compelling case for a decent portfolio allocation to HLG primarily as a yield stock but there's growth there too so to my mind this is a classic GARP stock, (Growth at a reasonable price).

GARP stocks are a rare thing in this market.

[winner69]

What's point 13 beagle

[Beagle]

LOL mate, I've said enough but how's this ?
13. Caveat - All predictions about the future including what Balance has suggested might happen are always fraught with considerable uncertainty and all one can do is assess the risks, rewards, opportunities and threats as best as they see them and invest based on the balance of probabilities :)

Balance might tell you 14 late this coming week ;)

[winner69]

Its crossed my mind with HLG's cash mountain there could be an eps accretive acquisition coming up ! Could this appointment be a prelude to that ?
Other than that I would think there might be appropriate non competition and non disclosure clauses included within the terms of this new appointment. I think we can very comfortably rely On Tim Glasson's judgement in this area with his 20% stake in the company.

Flash back a few years " She established Storm under Hallenstein Glassons’ ownership in 2006 as “a fashion boutique to bridge the gap between high end fashion and chain stores.”

Think it ended in tears

Maybe this time would be different ...hmmm

[Beagle]

Flash back a few years " She established Storm under Hallenstein Glassons’ ownership in 2006 as “a fashion boutique to bridge the gap between high end fashion and chain stores.”

Think it ended in tears

Maybe this time would be different ...hmmm

Yes absolutely ! That crossed my mind too. Often better to stick to one's knitting isn't it ! I think the way Glassons is growing they don't need to do anything different from what they're currently doing.

[Airw0lf]

I think I need to hose down this thing a bit to be fair to others. Balance has shared some information with me because we're mates. Its not inside information, its not board level and the outcome is not certain. He asked me to keep it quiet and i am respecting that request, its up to him when he wants to share. Clearly based on my action yesterday and earlier this week with buying at about $6 I think what might happen that he has shared has its merits but to be absolutely clear I am buying on the compelling fundamental's only and I think trading at $6 cum a fully imputed dividend of 24 cps the market is not yet pricing those fundamental's in for where interest rates are.

Investors should stick to the fundamental's and make their own assessment on HLG based on its merits.
I re-summarize my investment thesis below.
1. The company has demonstrated tremendous resiliency during Covid. This is deeply impressive and was a real surprise to me.
2. It is now clear they have demonstrated real brand power with the Glassons brand with extremely strong growth in online sales.
3. I think the advantage of selling 30% online will be both sticky and will confer a very meaningful advantage going forward. I doubt this is currently being valued by the market. (Online is the holy grail of retail and these guys are very smart with their digital platforms and marketing).
4. Much more favorable exchange rates and lower logistical costs this year,.
5. FY21 year to date sales up 11% compared to last year before anyone had even heard of Covid, frankly I find that remarkable
6. I expect in FY21 HLG will comfortably exceed last years profit, I see 50 cps as a fairly safe forecast with the risk to the upside.
7. That's a forward PE of just 12, (which is a no growth PE so the market is not pricing HLG correctly in my view).
8. With interest rates at 100 year lows, I think a forward PE of 12 is too cheap and this deserves at least the same PE as Briscoes (14.3) which suggests at least $7.15 is fair value
9. Their very strong cash position, ~ $50m as at balance date which is deeply impressive for a company of this size, and with no debt means HLG are well capable of paying all earnings or the vast majority of them out as dividends going forward. This is also supported by an apparent lack of need for any meaningful capex in the current environment with their focus on online sales and having recently completed new distribution center's in both N.Z. and Australia
10. 50 cents fully imputed per annum or very close to that appears sustainable for the foreseeable future given the growth of Glassons.
(whether they do pay the full 50 cents out or not, we can take considerable comfort from Tim Glasson's 20% stake that he has the owners eye, (as Percy calls it) on HLG and whatever they decide it will be in the best interests of shareholders.
11. If they pay all the eps out the shares are on a net basis, (look through the next dividend), HLG are on a 12% gross yield. I think this phenomenal.
12. No debt, excellent stock turn, strongly growing brand with Glassons and potential to turn around Hallensteins to where it used to be.

Better to invest on fundamental's than rumors and that's what I am doing when I'm buying at $6 because at a net price of $5.76, (adding back the dividend receivable shortly), I believe there is deep value remaining with HLG.

Remiss if I didn't mention risks. Yes, absolutely there is a risk of another Covid breakout but they have demonstrated tremendous resiliency with coping with this to date and one must also consider the opposite, that a vaccine might be available next year and then its onward and upward. One also needs to keep in mind there's risks with all stocks.

When I compare the above fundamental's with other opportunities on the NZX I think there's a compelling case for a decent portfolio allocation to HLG primarily as a yield stock but there's growth there too so to my mind this is a classic GARP stock, (Growth at a reasonable price).

GARP stocks are a rare thing in this market.

Hey Beagle, been watching this stock from afar and tend to share your views. However I keep thinking to myself that online retailers (from overseas) are a big risk to this business in the long run. What are your thoughts? I know a number of people who enjoy shopping at Glassons but there are others who just don't shop from many local retailers much at all and plug into the latest trends (whether they be high fashion or fast fashion) from overseas. I also share the sentiment on here that whilst Glassons is doing well, Hallensteins is a bit average and doesn't quite hit its target segments very well for some reason (Speaking as someone who should be in Hallensteins' target segments I never shop there but friends of the opposite sex do shop at Glassons.)

[Waltzing]

"Cramer says something does not come from talks then market goes down"

Mr P says this time a rebound in retail sales faces head winds as this GGFC (Gaint Global FC) is the second in a decade but covered by brought forward government spending.

Unless something really big is coming i dont see more than 7.50 THIS YEAR END 31 december 2022 because even if Mr B is correct this stock seems to always be discounted and not priced by the insto's as defensive or growth even if it does have good growth potential and has a winning formula for selling to human beings of a certain age and demographic .

Over the last ten years they have shown they do seem to have a formula for bring the customers to their counter.

Balance sheet has some current liabilities. Is that 50 million free cash with no payments to come?

[winner69]

"Cramer says something does not come from talks then market goes down"

Mr P says this time a rebound in retail sales faces head winds as this GGFC (Gaint Global FC) is the second in a decade but covered by brought forward government spending.

Unless something really big is coming i dont see more than 7.50 THIS YEAR END 31 december 2022 because even if Mr B is correct this stock seems to always be discounted and not priced by the insto's as defensive or growth even if it does have good growth potential and has a winning formula for selling to human beings of a certain age and demographic .

Over the last ten years they have shown they do seem to have a formula for bring the customers to there counter.

Balance sheet has some current liabilities. Is that 50 million free cash with no payments to come?

Hey mate - it's a mountain of cash

[Beagle]

Hey Beagle, been watching this stock from afar and tend to share your views. However I keep thinking to myself that online retailers (from overseas) are a big risk to this business in the long run. What are your thoughts? I know a number of people who enjoy shopping at Glassons but there are others who just don't shop from many local retailers much at all and plug into the latest trends (whether they be high fashion or fast fashion) from overseas. I also share the sentiment on here that whilst Glassons is doing well, Hallensteins is a bit average and doesn't quite hit its target segments very well for some reason (Speaking as someone who should be in Hallensteins' target segments I never shop there but friends of the opposite sex do shop at Glassons.)

Various people have been suggesting this is an emerging problem since I first bought in 2016 at $2.70. Since them HLG has grown its sales and profits substantially. Maybe the rising online trend is like a rising tide that lifts all good boats, (except the ones with holes in them that are not executing well of which WHS springs readily to mind). I made the point when I bought in August 2016 that my intention is this is a yield stock and therein lies its primary attraction still. The degree to which this has grown in the last 4 years, (most of which was during a time when overseas online retailers had the advantage of not having to charge GST) and the resiliency in the face of overseas product online offers has been very pleasing. Overseas retailers now have to charge GST on online sales here so that recent change has levelled the playing field for HLG and is another positive factor going forward. Honestly I am not concerned. Glassons has its own sexy brand power as you can see https://www.glassons.com/

[winner69]

Just a word of caution.
HLG received rent relief from landlords,what ,or how much we do not know.Some of the Malls HLG are in will not recover their pre Covid 19 foot traffic.
With HLG trading so well, AND paying a divie, I can not see landlords being too generous with on going rent accommodations.
That said, with so many fashion retailers [and many other retailers] in Aussie facing closure, Aussie landlords will look favourably to having Glassons as a tenant.Aussie is where I see HLG growth coming via Glassons.
Generally tougher times see lower margins,and with HLG's major customers, women and youth, being the most affected by a tighter economy, HLG do face headwinds.Just how strong those winds will be I do not know.
Should we see people continuing working from home ,this too should be taken into consideration, as we know it also affects HLG sales.

NZ businesses combined have not grown market share for years ...been about 5% share from Stats NZ retail data .... but they do keep up with how well or bad the overall market is doing ... generally tied to how well the economy is doing

And

[Beagle]

"Cramer says something does not come from talks then market goes down"

Mr P says this time a rebound in retail sales faces head winds as this GGFC (Gaint Global FC) is the second in a decade but covered by brought forward government spending.

Unless something really big is coming i dont see more than 7.50 THIS YEAR END 31 december 2022 because even if Mr B is correct this stock seems to always be discounted and not priced by the insto's as defensive or growth even if it does have good growth potential and has a winning formula for selling to human beings of a certain age and demographic .

Over the last ten years they have shown they do seem to have a formula for bring the customers to there counter.

Balance sheet has some current liabilities. Is that 50 million free cash with no payments to come?

Aside from the growth the potential for as much as 12% yield is more than sufficient reason alone for me to hold a sizeable position. You don't get a yield like that without some risk.

[Beagle]

NZ businesses combined have not grown market share for years ...been about 5% share from Stats NZ retail data .... but they do keep up with how well or bad the overall market is doing ... generally tied to how well the economy is doing

And

Correct but that's not the whole story by any means. The growth of Glassons in Australia in recent years has been very impressive and's its a very large market with a shrinking number of competitors.

[winner69]

Correct but that's not the whole story by any means. The growth of Glassons in Australia in recent years has been very impressive and's its a very large market with a shrinking number of competitors.

Glassons AU a bit of a puzzle in my mind - jury is still out

Di did wonders in F17 and F18 taking sales from $41m to $78m

Since then annual sales growth has been 14% in F19 and 8% in F20 - hardly 'impressive' considering the hype

But what worries me is that they have not converted sales growth into very much profit the last 2 years - sales are up $18.1m from F18 but profit up a miserable $1.3m - declining margins and higher expenses

But then F21 on fire - sales probably up 15% so no worries

[Waltzing]

MR B has made the point and on a small market NZX this is clearly a high performance stock by any measure. Investing should always be for a good time horizon with some stocks for trading (your formula) and some for long term holds. This sits somewhere in between but has show with history to be edging to the later. If it repeats the story of the GFC it will be heroic!

Profit does seem to come in seasons amd then drying up until the next change of image like birds of paradise in a David Attenborough doco.

Or as Mr B alludes the pull of social interaction. Prehaps we should be looking at this stock from the lens of social science and not economic demand and supply.

[Beagle]

Fair comment mate but 8% growth during a Covid crisis is pretty good. Maybe they have been discounting to get market penetration ?
Time will tell but I am quite comfortable with their prospects. Been very rewarding for a share I only ever bought for the yield at $2.70 in late 2016. Been some huge dividend feeds along the way and I am quite confident that will continue.

[jimdog31]

Why I love Beagles view on stocks is because its from a birds eye view, with a bean counter and investors perspective.

For a different perspective - Im a retailer (and an ex bean counter) with a number of stores around NZ (and a website that contributes 30 % to turnover) i can give some perspective on why I think HLG is nailing it.

1. Overseas travel $ being allocated elsewhere. This is huge, so many customers are spending money on retail therapy that they would have spent on an overseas trip.

2. Buy now pay later emergence as a payment method. Especially in HLGs case, this is having a massive growth impact on FMCG. The growth here is not done.

3. Websites that incorporate 2. as payment methods are experiencing massive transactional growth and increased IPS (items per sale)

4. GST law changes as already mentioned. This has really started to impact positively on NZ retailers witha good ecommerce setup. We are creating sticky customer relationships

5. Low interest rates are meaning home owners have more free cashflow for discretionary spend.

6. Cost rationalisation brought on by Covid. Its caused the entire retail sector to get ruthless on costs, advertising, staffing, rent negotiations. similarly it happened in 09, and then slowly unwound with increased confidence over the last few years. I spent 5 weeks of lockdown scaling everything i could back.

I can’t actually see any headwinds for HLG other than more lockdowns but I think that only compounds the effect a few factors above.

This stock is only going one way.

Just my take, but for the next 12 months as a Retailer, im the most bullish Ive ever been on the sector.

Disc: I bought more at $6 too, and its 25% of my holdings

[Beagle]

Thank you very much for your thoughts and valuable insights from the retail coalface jimdog31. Great post. Very well said and some very useful insights there, much appreciated.

(This is a great example of why I love and am quite frankly, addicted to this forum. Everyone doing their very best to share their best insights from their own experience and perspective and contributing to the greater knowledge of this investment community).

There should be a button for adding double reputation points, some posts definitely deserve it !

[Waltzing]

an ex ACA that buys or run 6 franchise stores in retail. Someone try to pick what retail would an accountant move into. And why would you buy another retail stock if your own retail also returns % else you want even more exposure and your own retail sales are not dented by lockdown or was dented by lockdown and you need returns to cover lockdown dent.

Fashion retail is image. Lets see that birds of paradise.

[macduffy]

Yes, thanks for an insightful post, jimdog. Good to hear from someone with actual current experience of retailing!

:)

[jimdog31]

an ex ACA that buys or run 6 franchise stores in retail. Someone try to pick what retail would an accountant move into. And why would you buy another retail stock if your own retail also returns % else you want even more exposure and your own retail sales are not dented by lockdown or was dented by lockdown and you need returns to cover lockdown dent.

Fashion retail is image. Lets see that birds of paradise.

I treat my business income and investment portfolio seperately, so I dont mind if I have some exposure to retail in it as its mutually exclusive. I’m in retail but a different sub category, not fashion.

Covid was the best thing thats happened to retail in NZ. If you listen to Rod Dukes interview awhile back I mirror exactly his sentiment, alot of posters on the forum were taken aback by his positivity but I had a smile on my face listening to him. Sales havent been dented overall, but have accelerated YOY And I know for a fact other retailers across many sub categories are saying that too.

A couple more adds to my post that i think should have been 7. and 8. and an add to 3.

3. With most overseas websites not having BNPL as an option this has been hugely beneficial to Nz ecommerce.

7. Support local. This was and is a big help coming out of lockdown, especially with web sales. I think this will continue for some time but will eventually decline as things return to normal. Most Nz retailers will have gained new ecommerce customers and seen a big increase in web sales so will put more and more focus here. HLG is ahead of that game and will look to capitalise. NZ retailers have been taking a hiding from overseas ecommerce operators for the last 5 years. They have paid no GST, no income tax , AND most importantly are not subject to NZ consumer law, ie CGA, Fair trading act. Its been pretty hard to compete with overseas sites who advertise bogus discounts and are not subject to NZ consumer law. This support local impact has been a welcome, overdue relief.

8. Commercial property relationships. Something that became evident with lockdowns was how much Landlords needed tenants. With returns from TDs and bonds so abysmal , I think Landlords have become a little more realistic with the returns they are looking to make from their properties, many that I know of have become more flexible around rent reviews, CPI increases or even rent reductions going forward. So again, costs have got better. Now in HLG’s case I imagine the majority of their landlords are KPG, stride etc. They too need glassons and hallensteins for foot traffic so Id imagine behind closed doors their will be ongoing relief if necessary, or rent reviews being delayed or waived.

[percy]

Always pleasing hearing from a retailer doing well.Well done.
Perhaps others like yourself, will take advantage of the abundance of retail opportunities available in ChCh, which has a growing number of empty shops.
All the Malls.Westfield Riccarton,Northlands,The Palms,South City,Eastgate,Barrington,and offcourse City Mall have plenty of space to lease.

[winner69]

Was once a busy part of Lower Hutt

Sad

[percy]

Was once a busy part of Lower Hutt

Sad

And to think I thought it was just a ChCh problem....lol.

[winner69]

And to think I thought it was just ChCh....lol.

Was down Lambton Quay the other day ....hardly anybody around just before lunch time

Didn’t see anybody in the big Hallenstein Glasson store had no customers in it .... no worries as all buying on line eh

Only matter of time that David Jones pulls the plug on Wellington

[jimdog31]

Always pleasing hearing from a retailer doing well.Well done.
Perhaps others like yourself, will take advantage of the abundance of retail opportunities available in ChCh, which has a growing number of empty shops.
All the Malls.Westfield Riccarton,Northlands,The Palms,South City,Eastgate,Barrington,and offcourse City Mall have plenty of space to lease.

Currently doing due dilligence on a site just out of northlands.

ChCh amazes me. Its our best performing region, attributable IMO to mortgage to salary affordability, plus the golden years of insurance money flowing in. Malls don’t seem to be as attractive for prospective tenants comparative to Auckland , TGA and Waikato. The quakes have definitely changed the retail landscape for both Wellington and Chch

[percy]

Currently doing due dilligence on a site just out of northlands.

ChCh amazes me. Its our best performing region, attributable IMO to mortgage to salary affordability, plus the golden years of insurance money flowing in. Malls don’t seem to be as attractive for prospective tenants comparative to Auckland , TGA and Waikato. The quakes have definitely changed the retail landscape for both Wellington and Chch

If the site is in Langdons Road which includes Briscoes and KMart, and other very strong retailers. it is a great site.
[depending on your business].
I have not mentioned Hornby, as it is years since I have been out there.

[winner69]

Optometrist told me people who couldn’t travel overseas this year are getting really expensive glasses ...and he also said that his audiologist mate was busy as supplying the top end expensive hearing aids

So spending goes on ....and they hopefully buying some new clothes as well.

[winner69]

Hey jimdog

As a matter of interest do traffic counts / footfall mean much these days when assessing sites or has virus impacts made them less meaningful.

Curious as retired now and been out of retail management for a few years

[jimdog31]

Hey jimdog

As a matter of interest do traffic counts / footfall mean much these days when assessing sites or has virus impacts made them less meaningful.

Curious as retired now and been out of retail management for a few years

Depending on the sub-category of retail , yes.

Fashion - footfall is a must, generally speaking it's more of an impulse buy. I can't think of many specialist fashion retailers that do well that aren't in the malls. That's why there are so many empty high street shops across the country, which will only get worse with Covid changes (ie remote working - Plenty of articles in paper about this) When you think of Warehouse, Kmart etc they act as a mini mall in their own right, youre there for something else and no matter where you walk in those stores, clothes racks never leave your sight.

Niche/specialist retail - traffic counts/visibility/parking are what counts. We definitely are a destination shop, Parking makes a massive difference. Some of my best performing shops are the ones in which when a customer walks in the door there can be no doubt that the customers have walked in the doors for a reason!

In my field what I actually spend more time analyzing when looking at potential sites is population demographics, Median incomes, Age demographics etc. I have been surprised (both good and bad) after the fact, but for the most part the demographics have not let me down yet.

Now more than ever if you can do either footfall or destination retail well + a good local website (many brands are still making the mistake in NZ of trying to rebadge their overseas site) you will do well in retail.

Coming back to why I think HLG is doing so well, check out https://www.similarweb.com/. Search them compared to their competitors and you'll see in both NZ & Aussie they are strong comparatively and will only get stronger.

Interestingly some brands you would have assumed would have picked up on this still haven't moved to keep up. H & M springs to mind.

https://www.stuff.co.nz/business/114429955/its-2019-shouldnt-these-10-shops-have-an-online-store-by-now

https://www.goodmorningamerica.com/style/story/hm-closing-250-stores-amid-coronavirus-pandemic-73386341

"Brick and click" is the only modelmaking money currently.

[Waltzing]

"BNPL"

there is a european company that does this for retailers but there is of course a cost.

Many thanks for the post and very very insightful as i imagine many of us invest with a certain element of risk awaiting some guidance from the companies.

We cant sit outside a store and count traffic or its not a great solution and on line mean we await statistic on retail and or guidance updates.

Fashion is not buying food distribution or other basic services and you can always buy from the op shop or Sally Army Shop.

[Balance]

Two outstanding posts for those keen to review why some of us are invested in HLG:




Investors should stick to the fundamental's and make their own assessment on HLG based on its merits.
I re-summarize my investment thesis below.
1. The company has demonstrated tremendous resiliency during Covid. This is deeply impressive and was a real surprise to me.
2. It is now clear they have demonstrated real brand power with the Glassons brand with extremely strong growth in online sales.
3. I think the advantage of selling 30% online will be both sticky and will confer a very meaningful advantage going forward. I doubt this is currently being valued by the market. (Online is the holy grail of retail and these guys are very smart with their digital platforms and marketing).
4. Much more favorable exchange rates and lower logistical costs this year,.
5. FY21 year to date sales up 11% compared to last year before anyone had even heard of Covid, frankly I find that remarkable
6. I expect in FY21 HLG will comfortably exceed last years profit, I see 50 cps as a fairly safe forecast with the risk to the upside.
7. That's a forward PE of just 12, (which is a no growth PE so the market is not pricing HLG correctly in my view).
8. With interest rates at 100 year lows, I think a forward PE of 12 is too cheap and this deserves at least the same PE as Briscoes (14.3) which suggests at least $7.15 is fair value
9. Their very strong cash position, ~ $50m as at balance date which is deeply impressive for a company of this size, and with no debt means HLG are well capable of paying all earnings or the vast majority of them out as dividends going forward. This is also supported by an apparent lack of need for any meaningful capex in the current environment with their focus on online sales and having recently completed new distribution center's in both N.Z. and Australia
10. 50 cents fully imputed per annum or very close to that appears sustainable for the foreseeable future given the growth of Glassons.
(whether they do pay the full 50 cents out or not, we can take considerable comfort from Tim Glasson's 20% stake that he has the owners eye, (as Percy calls it) on HLG and whatever they decide it will be in the best interests of shareholders.
11. If they pay all the eps out the shares are on a net basis, (look through the next dividend), HLG are on a 12% gross yield. I think this phenomenal.
12. No debt, excellent stock turn, strongly growing brand with Glassons and potential to turn around Hallensteins to where it used to be.

Better to invest on fundamental's than rumors and that's what I am doing when I'm buying at $6 because at a net price of $5.76, (adding back the dividend receivable shortly), I believe there is deep value remaining with HLG.

Remiss if I didn't mention risks. Yes, absolutely there is a risk of another Covid breakout but they have demonstrated tremendous resiliency with coping with this to date and one must also consider the opposite, that a vaccine might be available next year and then its onward and upward. One also needs to keep in mind there's risks with all stocks.

When I compare the above fundamental's with other opportunities on the NZX I think there's a compelling case for a decent portfolio allocation to HLG primarily as a yield stock but there's growth there too so to my mind this is a classic GARP stock, (Growth at a reasonable price).

GARP stocks are a rare thing in this market.


Why I love Beagles view on stocks is because its from a birds eye view, with a bean counter and investors perspective.

For a different perspective - Im a retailer (and an ex bean counter) with a number of stores around NZ (and a website that contributes 30 % to turnover) i can give some perspective on why I think HLG is nailing it.

1. Overseas travel $ being allocated elsewhere. This is huge, so many customers are spending money on retail therapy that they would have spent on an overseas trip.

2. Buy now pay later emergence as a payment method. Especially in HLGs case, this is having a massive growth impact on FMCG. The growth here is not done.

3. Websites that incorporate 2. as payment methods are experiencing massive transactional growth and increased IPS (items per sale)

4. GST law changes as already mentioned. This has really started to impact positively on NZ retailers witha good ecommerce setup. We are creating sticky customer relationships

5. Low interest rates are meaning home owners have more free cashflow for discretionary spend.

6. Cost rationalisation brought on by Covid. Its caused the entire retail sector to get ruthless on costs, advertising, staffing, rent negotiations. similarly it happened in 09, and then slowly unwound with increased confidence over the last few years. I spent 5 weeks of lockdown scaling everything i could back.

I can’t actually see any headwinds for HLG other than more lockdowns but I think that only compounds the effect a few factors above.

This stock is only going one way.

Just my take, but for the next 12 months as a Retailer, im the most bullish Ive ever been on the sector.

Disc: I bought more at $6 too, and its 25% of my holdings

[winner69]

HLG cash pile grew by $33m in F20 to a mountain of cash of $50m

My mum always told me (again and again) ”look after the pennies and the pounds will look after themselves”

That’s how Mary and her team make cash mountains in tough times

[couta1]

Lol there's just as much hype talk now as there was trash talk a few months back, no wonder newbies get confused, the key is to sell into the hype and buy into the trash talk.

[winner69]

Lol there's just as much hype talk now as there was trash talk a few months back, no wonder newbies get confused.

Last time the HLG share price took off like this it was that Aussie outfit who thought they had a bargain and bought in big time

Wonder if something like this is happening again?

[Biscuit]

Lol there's just as much hype talk now as there was trash talk a few months back, no wonder newbies get confused, the key is to sell into the hype and buy into the trash talk.


There is a lot of truth to that! There is a bit of a tendency for posters to take a black-or-white view. Always worth listening but need also to do ones own thinking.

[Beagle]

HLG cash pile grew by $33m in F20 to a mountain of cash of $50m

My mum always told me (again and again) ”look after the pennies and the pounds will look after themselves”

That’s how Mary and her team make cash mountains in tough times

That's 83 cents cash a share on a $6 share price. Hmmm You think that might underwrite future dividends, just a "little" ;)

Much hype on another thread about a $854 cash mountain, (all of which was built up by never once paying a dividend) unlike HLG who have a stellar track record in that regard. Amounts to $1.15 per share but that's not a huge percentage of a $15.80 share is it !

[Waltzing]

Last time i checked their balance sheet they did have a section termed "Current Liabilities" and i always like to have that section in my charts advanced summery totals when events are generated that section does get printed in excel.

Still a 90 cent margin left on current pricing surely as MR B has pointed out its undervalued as per dividend. It really should be a 7 dollars share until market summer update .

WHO is recommending no lockdowns world wide which give the governments around the world he green light to develop new strategies to harden societies to threats with out cutting business off at the ankles.

DISC: Not saying i support it.

[Beagle]

Last time i checked there balance sheet they did have a section termed "Current Liabilities"

Which are mostly related to stock and covered twice over by stock.

No wonder Winner is using the term "cash mountain" then eh mate :)

Funny thing is they're still negotiating with landlords over covid...got to hand it to them, they're nothing if not persistent.
Hope none of those landlords read the balance sheet lol

[couta1]

That's 83 cents cash a share on a $6 share price. Hmmm You think that might underwrite future dividends, just a "little" ;)

Much hype on another thread about a $854 cash mountain, (all of which was built up by never once paying a dividend) unlike HLG who have a stellar track record in that regard. Amounts to $1.15 per share but that's not a huge percentage of a $15.80 share is it ! Lots of trash talk around A2 at the moment and thats why its a buy or in my case sell and buy back more shares, look at the performance of the stock over the last few yrs, speaks for itself.

[Waltzing]

Its a very very strong position to be in for sure!!!!

ATM TA shows a buy but if it does hold else its down to the 13's... I am constantly amazed that even on the NZX TA related to FA seems to have some regard to buying and selling.

China recovering , US under pressure and NZD should hold here and gradually strengthen favouring HLG stock buying.

I do not consider MR B comments as anything other than highly considered and accurate FA.

Investors will find nothing confusing there.

[Beagle]

Lots of trash talk around A2 at the moment and thats why its a buy or in my case sell and buy back more shares, look at the performance of the stock over the last few yrs, speaks for itself.

I'm in no comment mode on that thread as you know mate. I was merely comparing the much talked about cash mountain in ATM with the hardly ever talked about cash mountain of HLG on a comparative basis. It wasn't intended as a criticism of ATM, merely observing the two cash mountains on a relative basis compared to their share prices. All the very best with your strategy. I genuinely hope it works out really well for you.
Disc: I have a significant position in Kingfish warrants, (exercisable in March 2021), and one of their biggest positions is ATM so our interests are aligned mate :)

[couta1]

I'm in no comment mode on that thread as you know mate. I was merely comparing the much talked about cash mountain in ATM with the hardly ever talked about cash mountain of HLG on a comparative basis. It wasn't intended as a criticism of ATM, merely observing the two cash mountains on a relative basis compared to their share prices. All the very best with your strategy. I genuinely hope it works out really well for you.
Disc: I have a significant position in Kingfish warrants, (exercisable in March 2021), and one of their biggest positions is ATM so our interests are aligned mate :) Thanks mate, both great stocks to own and a compliment to each other in many ways, A2 currently finds itself on the dark side of the moon but fortunately the moon isn't still.

[BlackPeter]

Lol there's just as much hype talk now as there was trash talk a few months back, no wonder newbies get confused, the key is to sell into the hype and buy into the trash talk.

quote of the day!

[winner69]

That's 83 cents cash a share on a $6 share price. Hmmm You think that might underwrite future dividends, just a "little" ;)

Much hype on another thread about a $854 cash mountain, (all of which was built up by never once paying a dividend) unlike HLG who have a stellar track record in that regard. Amounts to $1.15 per share but that's not a huge percentage of a $15.80 share is it !

Jeez - so Enterprise Value of HLG about $5.20 / share

Or less than $5 cum dividend

Need another coffee

[winner69]

HLG always been good at managing cash but the chart shows what happens when in tough times (could be crisis times) you 'watch the pennies and let the pounds look after themselves' - you get 83 cents a share of cash

Note I've taken $17m of lease payments from Finance Cash Flow and put up to Operating Cash Flows ....reported FCF was $64m

For dividend hounds cool that they over the timeframe of the chart dividends have averaged 129% of FCF (keep paying dividends during the GFC)

[Biscuit]

..... the key is to sell into the hype and buy into the trash talk.

So, you'll be selling now? :ohmy:

[winner69]

So, you'll be selling now? :ohmy:

Wouldn't want to sell now

I've added the dividends paid to the FCF chart I posted a while ago

The right of chart has this huge gap between cash generated and diviies paid out --- looks almost like a wide open mouth about to spew out mountains of cash

Maybe a special divie to relieve the pressure

[Beagle]

Jeez - so Enterprise Value of HLG about $5.20 / share

Or less than $5 cum dividend

Need another coffee

:lol: That's the quote of the day !

[Waltzing]

Decade TA says sell now , BUT all other factors are saying NO dont sell BUY! Its a triple top and those are rare. Triple bottoms are sells and dont touch it. This is 3x Top with everything saying BUY. With all that cash coming to market as the nervous investors consult there advisors a % of income will be allocated to all strong sectors and it wont take much cash to drive this higher.

Div should increase next time as MR B has hinted.

BUY.

[Beagle]

Wouldn't want to sell now

I've added the dividends paid to the FCF chart I posted a while ago

The right of chart has this huge gap between cash generated and diviies paid out --- looks almost like a wide open mouth about to spew out mountains of cash

Maybe a special divie to relieve the pressure

That image is a thing of real beauty.

[Beagle]

Decade TA says sell now , BUT all other factors are saying NO dont sell BUY! Its a triple top and those are rare. Triple bottoms are sells and dont touch it. This is 3x Top with everything saying BUY. With all that cash coming to market as the nervous investors consult there advisors a % of income will be allocated to all strong sectors and it wont take much cash to drive this higher.

Wonder which share might go into the NZX50 when MET disappears ? Opps :blush: I might have said too much...

[Waltzing]

"NZX50 " open a french champagne and start playing .

https://www.youtube.com/watch?v=0feNVUwQA8U

[winner69]

Wonder which share might go into the NZX50 when MET disappears ? Opps :blush: I might have said too much...

I’ve heard it’s likely to be PEB

[Waltzing]

HLG is deserving but i suppose it numbers first in ...

[Beagle]

I’ve heard it’s likely to be PEB

I'm well positioned either way lol...but the skuttlebuck chatter is they haven't had enough liquidity for long enough.
MET exit is one thing and likely to happen later this month which i understand necessitates an immediate adjustment but then there's the rebalance of the NZX50 on the third Friday of each quarter, next one in December.

I have a decent quinella ticket for both possible index changes ;) Hope Balance not annoyed with me, did try and PM him twice today to ask him to take my muzzle off, (his PM box full)...Beagle's can only tolerate a muzzle for so long and then they shake it off and its back to barking freely :t_up:

Disc: Bought even more HLG this morning. Might as well believe my own barking...its seems to be working out pretty well :)

[couta1]

HLG is deserving but i suppose it numbers first in ... Liquidity would be the big problem.

[Waltzing]

it looks like the hunt is now off galloping across the lush green fields of ZEALANDIA in search of game... the hounds are about to bark...

[Beagle]

Liquidity would be the big problem.

If it gets into the NZX50 liquidity will be a nice big "problem" for existing shareholders lol

[Waltzing]

is anyone getting any work done this month... its starting to feel like a big party is starting this summer...stalls are set up and i can hear the calls at the fair ground.

sun screen will be in big demand.. desk chairs at the ready and summer is nearly here.

it has the feel of the roaring twenties..is about to start.

[Cyclical]

is anyone getting any work done this month... its starting to feel like a big party is starting this summer...stalls are set up and i can hear the calls at the fair ground.

sun screen will be in big demand.. desk chairs at the ready and summer is nearly here.

it has the feel of the roaring twenties..is about to start.

LOL, my billable hours haven't been great...not through lack of work mind.

[Cyclical]

If it gets into the NZX50 liquidity will be a nice big "problem" for existing shareholders lol

You're not wrong there, this has not been a stock that's been heavily traded, and for funds to suddenly start needing a piece, it will be wild.

[Beagle]

You're not wrong there, this has not been a stock that's been heavily traded, and for funds to suddenly start needing a piece, it will be wild.

Really wild...like this https://www.glassons.com/animal-cross-over-bikini-top-ga45963ttl-two-tone-leopard Wonder if Mrs B would fit into that anymore ?

"Sexy sells"...anyone wondering why Glassons sales are on fire need look no further, unless they want too :D

Wonder if styles like that we worn in the 1920's era ?

Anyway...I better not have a coffee for afternoon tea...some nice calming herbal tea might be the order of the day for afternoon tea lol

[winner69]

Been on a zoom to Melbourne to see how our biz is going and what’s coming up.

Seems politics will win out and lock down and other restrictions will be all over soon. Cox Plate / Caulfield Cup /Melbourne Cup coming up ..... you wouldn’t want those to be at empty tracks.

So Glasson stores reopening soon ...just in time for race outfit and new party clothes

[Waltzing]

"nice big "problem"

i think the NZX would want PEB in there first, better for the NZX in terms of future global prospects.

"The calculation of the free-float capitalisation excludes blocks of shares greater than 20% and blocks between 5% and 20% that are considered strategic."

NZX 50


15 cents special div at least surely..only 59 mil shares.

[Cyclical]

Really wild...like this https://www.glassons.com/animal-cross-over-bikini-top-ga45963ttl-two-tone-leopard Wonder if Mrs B would fit into that anymore ?

"Sexy sells"...anyone wondering why Glassons sales are on fire need look no further, unless they want too :D

Wonder if styles like that we worn in the 1920's era ?

Anyway...I better not have a coffee for afternoon tea...some nice calming herbal tea might be the order of the day for afternoon tea lol

Wow, I was beginning to think you spend too much time on that site, frequently posting up links...I took the bait this time and now understand :ohmy:

[winner69]

Jacinda mobbed by her fans at The Base in Hamilton

Anybody get a shot of her quick dash into Glassons .....will probably be buying what she saw online tonight

She sure is popular this Jacinda

[Waltzing]

or should that be a 20 cent special? when did they last pay one?

[nztx]

What is going on the NZX site:

At the moment -

High Bid Quote $6.25
Low Offer Quote $5.80

LOL ;)

Have one of canine furries got in there & pulled out a cord somewhere ?

You guys look to have broken it!

[Waltzing]

Hate to be paying for a data feed....better to use a free API feed with an HTTP client request. Yahoo used to be free but you have to sign up now.

yes prehaps a request to the NZX for an explain.

[winner69]

What is going on the NZX site:

At the moment -

High Bid Quote $6.25
Low Offer Quote $5.80

LOL ;)

Have one of canine furries got in there & pulled out a cord somewhere ?

You guys look to have broken it!

End of day action .....we’ve been through this before

[nztx]

Connection restored & back to delayed reality now:

Buy 6.06 / Sell 6.10

[Waltzing]

ive chirped up on special DIV. end of 21 ? surely its got to be a reality with so much cash sloshing about compared to shares issued.

[Beagle]

To the best of my knowledge they have never paid a special dividend before but to be honest, all their dividends are pretty special ;)

12% gross yield I am forecasting is very special, I am sure you would agree :)

[Waltzing]

Yes MR B and that maybe why im still waiting for my buy today in the holding company... did not get in quick enough.

Prehaps there will be an increase in the DIV , but i think they must know this special div exists and to keep 30 - 50 odd million lying around is a waste of share holder money..it actually belongs to the shareholders.

they could at least return 10 million. I may be being a bit high minded here as an only sometimes holder.

but id buy a LOT more if i could if i knew they had some policy as to special divs.

[couta1]

Yes MR B and that maybe why im still waiting for my buy today in the holding company... did not get in quick enough.

Prehaps there will be an increase in the DIV , but i think they must know this special div exists and to keep 30 - 50 odd million lying around is a waste of share holder money..it actually belongs to the shareholders.

they could at least return 10 million. I may be being a bit high minded here as an only sometimes holder.

but id buy a LOT more if i could if i knew they had some policy as to special divs. Lol I wouldn't speak too loud about all this extra cash sloshing around, Labour might do a few targeted door knocks post election trying to recover wage subsidies.

[Beagle]

HLG's claim looks well within the law and the spirit of the law to me. Massive numbers of shops were shuttered and online sales channels shut down for many weeks.
A reminder that their second half profit inclusive of the wage subsidy that covered only part of the cost of keeping staff employed, was significantly lower than the previous half year.

Your comment seems highly implausible. Sour grapes ?

[Waltzing]

Oh dear are those supporters that lurk on other sites here to? Do they have someone monitoring from the labour unions?

lets face it the balance sheet of HLG is just amazing, only 59 million share issued, 50 million in cash. Surely one of the strongest on the NZX.

PE only 13.. EPS 46 .. well its been said here often surely when AUS opens up again, well ...

[Beagle]

Oh dear are those supporters that lurk on other sites here to? Do they have someone monitoring from the labour unions?

Coutts used to have truckloads of these but doesn't appear to now own many / any. Sellers remorse ?

[winner69]

HLG's claim looks well within the law and the spirit of the law to me. Massive numbers of shops were shuttered and online sales channels shut down for many weeks.
A reminder that their second half profit inclusive of the wage subsidy that covered only part of the cost of keeping staff employed, was significantly lower than the previous half year.

Your comment seems highly implausible. Sour grapes ?

Glassons NZ H2 profit up 10.7% in H2 v pcp / Glassons AU H2 profit up 19.4% in H2 v pcp -- great performance

Hallensteins a real disaster - H2 profit down 51.4% V pcp

Overall Group H2 profit down 4.9% v pcp ...but then it was down 3.6% in H1

The Glassons numbers should hearten you for for other reasons than wage subsidies - just as well Hallensteins made things look really bad and justified the wage subsidies.

[couta1]

Lighten up guys, was just a cheeky comment although I did read an article in the weekend that Audits are going to occur. PS-I do still have some but they are mostly ones I manage on behalf of a family member and a friend.

[Waltzing]

ATM doesnt pay a DIV. Growth only on 30 PE...

HLG has growth and DIV only 13 PE.

We had all the best shares and found good reasons to sell them all. These days we dont sell till the rockets are fuelled and lifting off..

Why would you sell a share that performed in the GFC and has a strong balance sheet... Accounting 101

We even bought KMD and trade it.

We dont own many retail as per a 6% allocation for each retail stock.

Im sure he sleeps better at night not having huge allocations tied up.

How ever you dont make the big money without big bets or you can take a more measured approach over the long term and settle for less risk.

After all you have with some luck decades of investing to come well into middle and old age.

HLG held 6 dollars from october till feb this year. It may well have moved up from there but for covid.

We should see it test new highs this summer.

[nztx]

Onwards & upwards - today's close $6.15 , the day's high $6.18

looks like $7 or north of that could be ahead & well justified based on Div yield

[winner69]

Onwards & upwards - today's close $6.15 , the day's high $6.18

looks like $7 or north of that could be ahead & well justified based on Div yield

All time high 638 later this week I reckon

It's looking like Beagle was spot on where this heading

cool eh

[Cyclical]

All time high 638 later this week I reckon

It's looking like Beagle was spot on where this heading

cool eh
If you're talking the rumour that was meant to put a rocket under the SP, I think it was balance and I'm afraid the NZX50 inclusion this time round goes to PEB.

[Beagle]

If you're talking the rumour that was meant to put a rocket under the SP, I think it was balance and I'm afraid the NZX50 inclusion this time round goes to PEB.

Missed this time (I have some PEB too), but there's always next time which is the regular quarterly index adjustment, next coming up to be announced on the second Friday in December (which is just under 2 months away).

I recently outlined my reasons for adding including my forecast of 12% gross yield which must surely be the highest yield in the market !

Just as an aside...I was reviewing my main trading banks call account interest rate yesterday, BNZ business call rate 0.05% per annum. That's 20 years to earn 1% or 240 years to earn what you can earn in one year with HLG ! One wonders what the BNZ and other trading banks are going to pay on their call accounts when the OCR goes negative next year ? Will we have to pay them to keep our money "safe" :eek2:

[peat]

All time high 638 later this week I reckon

It's looking like Beagle was spot on where this heading

cool eh

648!



HLG.NZ (https://www.directbroking.co.nz/DirectTrade/dynamic/quote.aspx?qqsc=HLG&qqe=NZSE)
04/12/2019
SELL

641.82

[winner69]

Stats NZ Card Spend data for September had bank economist / commentators happy as spending was pretty robust

Digging down into the data and the apparel industry Sept spend was 6.7% up on last year but that follows August being down 21.4%.

Combined Aug/Sep sales were down 7.8% on last year

That's the period that HLG say group sales are up 10% - history would suggest that HLG NZ stores haven't grown much share if any so the data from NZ sort of says Aussie must be going gangbusters for HLG

Trend wise apparel sales in NZ dropped 12% (annual sales) during lockdown and the market is still running at this level - ie no big catch up spend yet.

Go Glassons AU - we need you to be big heroes.

[Beagle]

Huge addressable market in Australia with a significantly reduced amount of competition. Extremely hot looking website, (where's my heart pills ;). ) "Sexy Sells"...no worries.

[winner69]

Huge addressable market in Australia with a significantly reduced amount of competition. Extremely hot looking website, (where's my heart pills ;). ) "Sexy Sells"...no worries.

Suppose the market in Australia is ‘dressable’

[Beagle]

LOL, you're on good form this morning :)

[Waltzing]

Surely they are working on lifting brothers performance?

[Beagle]

Yes they certainly are. They made mention that second half Hallensteins performance was affected more by the lockdowns on both sides of the Tasman. I think its readily apparent guys are not so inclined to shop online as women are. Melbourne lockdown due to end 26 October, as I understand it.

Really looking forward to my 24 cent divvy in December. Its going to be a very big Christmas bonus this year !!!!

[Cyclical]

If Glassons is going after the trendy hot young things that litter the big cities in Oz, they will have to be on their game as far as fashion goes, which should have positive flow on effects for the NZ stores too, provided they don't swing too far in that direction and end up alienating a good chunk of their NZ customer base (the more conservative types).

[winner69]

Huge addressable market in Australia with a significantly reduced amount of competition. Extremely hot looking website, (where's my heart pills ;). ) "Sexy Sells"...no worries.

They say that addressable market is about $17 billion

And HLG only have $100m -- thats only 0.6% share

Jeez imagine what the divie will be be they get to 3% or even 5% share

I'd hazard a guess that most websites in this market are just as 'sexy' as Glasson's one

Your task for this week is to rreview competitors web presence and report back how Glassons stack up

[Beagle]

They say that addressable market is about $17 billion

And HLG only have $100m -- thats only 0.6% share

Jeez imagine what the divie will be be they get to 3% or even 5% share

I'd hazard a guess that most websites in this market are just as 'sexy' as Glasson's one

Your task for this week is to rreview competitors web presence and report back how Glassons stack up

I better go to the doctor first and get some more heart pills lol

[850man]

2.6% SP dip this morning - weak hands disappointed that HLG didn't make it into the NZX50?

[Waltzing]

well thats good news, yes the male probably is not a shop till they have there click touch appendages RSI'd...

Our xmas is going to be very boring testing our new equities stock control module... oh well..that's what comes from not being a government department...

[Beagle]

2.6% SP dip this morning - weak hands disappointed that HLG didn't make it into the NZX50?

Yes...there are always some speculators looking for instant gratification. Me...I bought for all the attractive fundamental reasons previously outlined.

[peat]

Yes...there are always some speculators looking for instant gratification. Me...I bought for all the attractive fundamental reasons previously outlined.

Those nasty nasty speculators lol

[Davexl]

2.6% SP dip this morning - weak hands disappointed that HLG didn't make it into the NZX50?

Thought I had missed out, but left a large order on the market in case of profit taking etc. Got a nice big block at 6.03. Very happy.
Along for the long ride up and / or divvie. Patience sometimes wins the race, and a little luck methinks...:)

[Waltzing]

if it pulls back in to the low 5's its a back up the truck...

we always dump retail... always been able to go back to 4 and buy every few years... low 5's would now be our new 4 but we arnt selling this time.... for a while..

i dont think they should return more than 10 million to shareholders this time round.

[jimdog31]

Yes...there are always some speculators looking for instant gratification. Me...I bought for all the attractive fundamental reasons previously outlined.

Topping up!! Keep it coming

[jimdog31]

Topping up!! Keep it coming

See MHJ's announcement confirming what I'm saying re retail.... Surprised also to see BGP have a slight pullback.

[Leftfield]

2.6% SP dip this morning - weak hands disappointed that HLG didn't make it into the NZX50?


Yes...there are always some speculators looking for instant gratification. Me...I bought for all the attractive fundamental reasons previously outlined.

Beagle.. you are beginning to sound like me over on the ATM thread. ;)

[Waltzing]

MHJ - Great performance ... have walked past shops wondering. We now have the answer.

[Beagle]

Beagle.. you are beginning to sound like me over on the ATM thread. ;)

Touché lol (I've banned myself from that thread for quite a while and I'm actually finding it quite refreshing. What's the bet I'm not the only one finding that refreshing :lol: )

[Leftfield]

Touché lol (I've banned myself from that thread for quite a while and I'm actually finding it quite refreshing. What's the bet I'm not the only one finding that refreshing :lol: )

Always good to take a break from social media IMHO.........I do it often...tho no one notices. lol.

[Beagle]

Always good to take a break from social media IMHO.........I do it often...tho no one notices. lol.

Yes...a healthy thing.

Anyway...back to HLG. As Winner inferred earlier today we need those Australian women to get out shopping at Glassons and it would seem their budget has helped boost confidence. https://thewest.com.au/business/economy/consumers-applaud-budget-but-will-they-spend-ng-b881691743z?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Wednesday+1 4+October+2020

[Cyclical]

Touché lol (I've banned myself from that thread for quite a while and I'm actually finding it quite refreshing. What's the bet I'm not the only one finding that refreshing :lol: )

No comment.

LOL

[Cyclical]

if it pulls back in to the low 5's its a back up the truck...

Tell em he's dreamin.

Hope i didn't just jinx it by saying that! It would take a pretty good change in fundamentals for that to happen now I think...and a massive uptick in interest rates (was going to use that word normalisation, but not sure what it means anymore).

[Biscuit]

Look at the HLG share price graph. It has bounced around from $3 - $6 forever. I bought in back in 2010 at around $3. Unless you are a trader or are not serious about making money, what is the point of buying this kind of share?

If you are a trader, what's the point of buying this kind of share at $6?

[Jantar]

...
If you are a trader, what's the point of buying this kind of share at $6? The point is a 10% return on investment at a $6 purchase price. Where else do you get this sort of income?

My average buy price is $4.27 so I am getting at least 14% gross return.

[peat]

The point is a 10% return on investment. Where else do you get this sort of income?

and the chance that it will go to $8 this time (or higher)

[Cyclical]

If you are a trader, what's the point of buying this kind of share at $6?


The point is a 10% return on investment at a $6 purchase price. Where else do you get this sort of income?

That's right, the point is fundamentally things are different now, because of interest rates. And as Peat implies, the possibility that it's headed somewhat north of here is very real as some of those billions of expiring TD's go looking for yield like they've never had to before. I'd been doing pretty well I thought trading this stock since March, but now I wish I'd held every single one.

[Biscuit]

and the chance that it will go to $8 this time (or higher)


I'm not a trader and not much into TA, so I will accept your judgement you see a reasonable possibility that HLG will go from $6 to $8 over the short term.

[Biscuit]

The point is a 10% return on investment at a $6 purchase price. Where else do you get this sort of income? ......


Any of the many companies that have sustained NPAT growth greater than 10%.

[winner69]

That's right, the point is fundamentally things are different now, because of interest rates. And as Peat implies, the possibility that it's headed somewhat north of here is very real as some of those billions of expiring TD's go looking for yield like they've never had to before. I'd been doing pretty well I thought trading this stock since March, but now I wish I'd held every single one.

Those punters you mention with expiring TDs could think they are in heaven if they got 5% grosss

Even with a miserable 40 cent divie to get that 5% they could buy HLG for $10 plus

[Biscuit]

Those punters you mention with expiring TDs could think they are in heaven if they got 5% grosss

Even with a miserable 40 cent divie to get that 5% they could buy HLG for $10 plus

I wouldn't argue that people looking for TD substitutes won't pay high prices for HLG, I'd just argue that they shouldn't, IMHO.

[Davexl]

I wouldn't argue that people looking for TD substitutes won't pay high prices for HLG, I'd just argue that they shouldn't, IMHO.

I'm personally in a situation where I can't simply buy & hold - I need to make the capital do some work...

[Beagle]

I stand by my previous comments that buying at $6 now is likely to give you an effective gross return of 12%. If you want to see how I work that out go back a few pages and see my previous thoroughly articulated calculations and reasoning. Its underwritten by 83 cents per share of cash on the balance sheet and a company that's trading well ahead of last year. Surely the best yield on the NZX and has a history of being very reliable unlike many other shares !

[Biscuit]

I'm personally in a situation where I can't simply buy & hold - I need to make the capital do some work...

The capital is working hardest where it is growing the fastest, not where it is paying the highest dividend.

I'm not offering advice, and everyone's situation is different, I'm just spouting off the top of my head as I mull things over. Also, I still do hold HLG - I tend not to sell unless I develop a really negative view of a company. Leveraged property investment aside, looking back over decades of investment, it is the growth companies that make you money.

[Davexl]

The capital is working hardest where it is growing the fastest, not where it is paying the highest dividend.

I'm not offering advice, and everyone's situation is different, I'm just spouting off the top of my head as I mull things over. Also, I still do hold HLG - I tend not to sell unless I develop a really negative view of a company. Leveraged property investment aside, looking back over decades of investment, it is the growth companies that make you money.

With HLG at the right point in the cycle (and yearly quarter) you can achieve both. I also have been switching more capital to growth shares over time, particularly in Aust, though right now is not a good time to be taking much risk on growth stocks with the US Election & it's aftermath coming up. (Looks like Trump will be wiped out, but he's beaten the odds before).

eg sticking to a nice boring gentailer (AST) in Aust over the next month among other stocks.
I also happen to agree with Beagle's thesis, on the wall of money from TD's looking for a lower risk home (within shares), which is where div stocks should appreciate in value...Just my personal opinion...

[Leftfield]

The capital is working hardest where it is growing the fastest, not where it is paying the highest dividend. .... looking back over decades of investment, it is the growth companies that make you money.

I'm in total agreement. Some investors like the 'security' of div/yield stocks.

Others (like me) prefer to have my capital working hard.

Here's an example to consider..............

Back in 2017 in an interesting coincidence, three different companies spiked my attention and I placed them in my watch list.

The following chart shows the % cap gains returns since (if you add in the HLG divs it reaches about 100% gain... roughly speaking. )




Date In
In SP
Current SP
# Weeks
% gain


HLG
1/12/17
$3.56
$6.00
150
68%


SKO
2/10/17
$0.64
$4.87
158
660%


PLX
1/10/17
$0.175
$1.56
158
791%



Of course this is backward looking and the future performance of these shares may be much different..... but it does highlight what Biscuit is saying.

[Biscuit]

.... Looks like Trump will be wiped out..... I also happen to agree with Beagle's thesis, on the wall of money from TD's looking for a lower risk home (within shares), which is where div stocks should appreciate in value...

What people do with their money is, like their vote, unpredictable to me. I know that the decisions I make do not often follow my rational thoughts and I expect other people's decisions are even less likely to.

[Biscuit]

...... Of course this is backward looking and the future performance of these shares may be much different.....

Looking forwards, companies that plan and strive for world domination from day one may fall over, but, until they achieve world domination, they are likely better investments than companies that plan to distribute their income as dividends.

[Davexl]

What people do with their money is, like their vote, unpredictable to me. I know that the decisions I make do not often follow my rational thoughts and I expect other people's decisions are even less likely to.

Unbelievable...

[Biscuit]

Unbelievable...

Unbelievable: that people's choices are a mystery to me; that I don't do what I think I logically should do; or that other people don't do what I think they should do? People are irrational, I don't think you can use logic to work out what people are going to do (just look at all the people who own HLG shares - including me - that is an irrational choice).

[winner69]

Really positive signs for Glassons AU

Australia October consumer sentiment surges to two-year high in "extraordinary" result

https://www.reuters.com/article/australia-economy-consumersentiment-int/australia-october-consumer-sentiment-surges-to-two-year-high-in-extraordinary-result-idUSKBN26Y372

[Waltzing]

I keep thinking nothing to comment. But what is irrational about buying share that pays a dividend higher than 5% and has no debt much to speak of.

Its got to be the most logical thing to do. buy HLG.

if Crammer was doing a NZX segment i can imagine the sound effects every time they pay a dividend....Id turn it up as loud as possible and that is very loud considering the sound system that is plugged in.

[Beagle]

I'm in total agreement. Some investors like the 'security' of div/yield stocks.

Others (like me) prefer to have my capital working hard.

Here's an example to consider..............

Back in 2017 in an interesting coincidence, three different companies spiked my attention and I placed them in my watch list.

The following chart shows the % cap gains returns since (if you add in the HLG divs it reaches about 100% gain... roughly speaking. )




Date In
In SP
Current SP
# Weeks
% gain


HLG
1/12/17
$3.56
$6.00
150
68%


SKO
2/10/17
$0.64
$4.87
158
660%


PLX
1/10/17
$0.175
$1.56
158
791%



Of course this is backward looking and the future performance of these shares may be much different..... but it does highlight what Biscuit is saying.

Comparing apples and oranges. There's been plenty of tech wrecks over that timeframe too.
FWIW I first got into HLG in Aug 2016 at ~ $2.70 on a yield of 15% gross. Its more than doubled its money in the last four years and its paid two massive dividends every year unlike many other companies.

Horses for courses. I'm in the twilight of my working career and want some stocks that pay me monster dividends so I can enjoy beautifully aged Scotch by the riverside parked up in my new German made campervan :cool:

Its very tempting to go even more overweight and get even more of my portfolio working at 12% gross...sure beats working for a living :)

[Waltzing]

the giant over budget government tech wrecks of the late 80, 90's....

the more dynamic and better the technology the skies the limit..the more profitable the software ...its like kfc. Killer technologies that are both dynamic and cost effective are rare. They have to be morphic. The higher the profit on a software solution the more i suspect its ingredients.

Like clothes that dont last long but sell well.

[couta1]

Comparing apples and oranges. There's been plenty of tech wrecks over that timeframe too.
FWIW I first got into HLG in Aug 2016 at ~ $2.70 on a yield of 15% gross. Its more than doubled its money in the last four years and its paid two massive dividends every year unlike many other companies.

Horses for courses. I'm in the twilight of my working career and want some stocks that pay me monster dividends so I can enjoy beautifully aged Scotch by the riverside parked up in my new German made campervan :cool:

Its very tempting to go even more overweight and get even more of my portfolio working at 12% gross...sure beats working for a living :) My advice to you Mr Beagle as a former Top 10 shareholder in this company is to stop p****** around and Go Big or Go Home. PS-I may make a comeback on this one once I'm able to empty the milk bath im currently submerged in somewhat.

[Beagle]

My advice to you Mr Beagle as a former Top 10 shareholder in this company is to stop p****** around and Go Big or Go Home. PS-I may make a comeback on this one once I'm able to empty the milk bath im currently submerged in somewhat.

Thanks mate. I hold twice as many currently as I have ever held before but I still believe a reasonably well diversified portfolio gives the optimum return for the more moderate risk involved.

[Leftfield]

Comparing apples and oranges...
Horses for courses. I'm in the twilight of my working career and want some stocks that pay me monster dividends so I can enjoy beautifully aged Scotch by the riverside parked up in my new German made campervan :cool:

Its very tempting to go even more overweight and get even more of my portfolio working at 12% gross...sure beats working for a living :)

It was simply coincidence that those 3 shares entered my watch list at that time however I find it useful to back-check performance from a capital gains point of view.

Of course it's all horses for courses and each to their own.

[Biscuit]

Comparing apples and oranges. .... FWIW I first got into HLG in Aug 2016 at ~ $2.70 on a yield of 15% gross.....

Sure, more like comparing a ham sandwich with a Blackforest gateaux IMHO. I know which I prefer :).

[couta1]

Sure, more like comparing a ham sandwich with a Blackforest gateaux IMHO. I know which I prefer :). I think with Mr Beagles blood pressure issues the ham sandwich is the best option.:eek2:

[Biscuit]

I think with Mr Beagles blood pressure issues the ham sandwich is the best option.:eek2:

Maybe, then, he is better to stick with the apples and oranges!

[Beagle]

LOL, lets move on.

[Cyclical]

Thanks mate. I hold twice as many currently as I have ever held before but I still believe a reasonably well diversified portfolio gives the optimum return for the more moderate risk involved.

Subtle. LOL.

Good to see everyone's on form this morning.

Meanwhile, looks like HLG is over the disappointment of being p***** on by the CX Bladder team around the NZX50 inclusion...onwards and upwards.

[Waltzing]

HLG has profits and a record of it, balance speaks volumes.

Still havnt got enough based on balance sheet , tiny holding compared to past holdings due to the completely 1920's market euphoria. eye watering recovery. We went much bigger then before on defensives like ARG ect. MR B went to cash before entering back a bit later after observing the hurricane wind swept seas.

[fastbike]

Following the events of Sat night I think there will be pressure to repay wage subsides:
Hallensteins = 2,487,184.80
Glassons = $2,697,806.40 (+ another very small extension)

So that's about $5m gone from the balance sheet.
Not sure of the effect on sp ? From an accounting POV about 10 cents, but maybe more from a reputational damage POV ?

[Balance]

Following the events of Sat night I think there will be pressure to repay wage subsides:
Hallensteins = 2,487,184.80
Glassons = $2,697,806.40 (+ another very small extension)

So that's about $5m gone from the balance sheet.
Not sure of the effect on sp ? From an accounting POV about 10 cents, but maybe more from a reputational damage POV ?

Why?

Because NZ has a government who punishes those who are successful and reward those who are not?

[kiwico]

Following the events of Sat night I think there will be pressure to repay wage subsides:
Hallensteins = 2,487,184.80
Glassons = $2,697,806.40 (+ another very small extension)

So that's about $5m gone from the balance sheet.
Not sure of the effect on sp ? From an accounting POV about 10 cents, but maybe more from a reputational damage POV ?

I realise it's a Labour government but all the likes of HLG did was follow the rules of what was offered to them. It might be an incompetent Finance Minister being too free and easy with our money (never I hear you say) but if the likes of HLG shouldn't have been able to get the wage subsidy or should have had to pay it back then this should have been part of the rules. The government allowing such companies to meet the rules for the subsidy and then whinging when they take it seems a very strange way to go about rule making.

[Jantar]

Following the events of Sat night I think there will be pressure to repay wage subsides:
Hallensteins = 2,487,184.80
Glassons = $2,697,806.40 (+ another very small extension)

So that's about $5m gone from the balance sheet.
Not sure of the effect on sp ? From an accounting POV about 10 cents, but maybe more from a reputational damage POV ?
I disagree. HLG were not permitted to trade during the Level 4 lockdown, and only had restricted trade during Level 3. All the while they kept their staff employed and still had to meet other costs. As a result, for that period of time revenue was decimated due to the governments call. Now we know that the decision and rules made by the government were not even legal during the first part of all this.

I am pleased that HLG continued to employ their staff and accepted the government subsidy to do that. Would you have preferred that staff be instructed to take leave without pay at best, or even laid off completely as an alternative?

[King1212]

HLG wages subsidy is justified as they closed down all NZ stores for almost 60 days.....

[couta1]

You may find the market will price in a payback scenario so could go back to $5.50ish.

[macduffy]

HLG wages subsidy is justified as they closed down all NZ stores for almost 60 days.....

Yes, HLG were justified in claiming the subsidy at the time. Now that it has been shown to have been unnecessary, they should pay it back as others have done.

[Davexl]

Comment from Aust on re-purposed buying power - good for HLG...

“But you know I think our cautiousness around the consumer has probably been ill-placed. Remember too that Australians as a whole used to spend some $40 billion or so travelling offshore in any given year. That equates to about 12 per cent of retail sales.”

[Waltzing]

great statistics to post, thank you.

[Balance]

Yes, HLG were justified in claiming the subsidy at the time. Now that it has been shown to have been unnecessary, they should pay it back as others have done.

Unnescessary?

All non-essential companies which had to close down lost sales and lost money during the lockdown period.

[Filthy]

All non-essential companies which had to close down lost sales and lost money during the lockdown period.

oh yes, but all of those rich shareholders of NZX companies should be paying for COVID, not the government or any other company

[Davexl]

Comment from Aust on re-purposed buying power - good for HLG...

“But you know I think our cautiousness around the consumer has probably been ill-placed. Remember too that Australians as a whole used to spend some $40 billion or so travelling offshore in any given year. That equates to about 12 per cent of retail sales.”


Despite disappointing GDP out of China, the relative performance of it's Retail sector is instructive as a Reference baseline:

"...And retail sales were also the highest since December - up 3.3 per cent and beating expectations of 1.8 per cent growth."

Applicable to NZ as a well managed Covid country IMO...

[Beagle]

Issuer Details
Registered Name: Hallenstein Glasson Holdings Limited
Short Name: HALGLASS
Issuer Code: HLG
End of Financial Year: 08
First Listed Date: 01/10/1947

Wow...isn't that something quite special ! Investors starting to load up and think about collecting that lovely juicy 24 cent fully imputed dividend due in December ?

[Waltzing]

orders for rowing blades for manufactures from australia are up as schools stayed home and decided to spend money on over due items for repair and new.

Just shows that in many sectors people are spending that money on home repairs, new curtain, floors, carpets and clothes? and outdoor sporting equipment?

garden centre spending for spring would be interesting to know.

[Beagle]

Mine arrived today...I love a good hard copy to read and it certainly made for interesting reading.
Even a few pages in there for the greenies about sustainability.
https://www.hallensteinglasson.co.nz/online-annual-report/annual-report-2020/18
Disc: Well positioned and happy holder.

[Waltzing]

result without the little disruptions would have been ? anyone want to stammer out a number? Mr B thinks enough to increase the Div. Stats for Xmas will be very very interesting.

Did we know this already?

"The first eight weeks of thenew financial year have seenGroup sales grow +10.71% onthe prior year, this has beendriven predominantly byonline sales as physical storegrowth has been slower,particularly in CBD locations."

[jimdog31]

result without the little disruptions would have been ? anyone want to stammer out a number? Mr B thinks enough to increase the Div. Stats for Xmas will be very very interesting.

Did we know this already?

"The first eight weeks of thenew financial year have seenGroup sales grow +10.71% onthe prior year, this has beendriven predominantly byonline sales as physical storegrowth has been slower,particularly in CBD locations."

That would be reflective of Auckland level 3 and melbourne. Still managing to make up for that via online method. More of the same good news!

[Waltzing]

Yes JIM , i must admit im a little stunned at the results. Finding it rather hard to believe.

[Beagle]

Undoubtedly one of the most attractive annual reports I've read all year in more ways than one ;)

[winner69]

Undoubtedly one of the most attractive annual reports I've read all year in more ways than one ;)

Wonder how much the cash mountain has shrunk by

[couta1]

Wonder how much the cash mountain has shrunk by 5 mill if they pay back the wage susidy.:cool:

[winner69]

5 mill if they pay back the wage susidy.:cool:

As long as they don't pay back the Aussie subsidies it will be sweet as

Probably paying rent now as well after having a holiday or two

[winner69]

5 mill if they pay back the wage susidy.:cool:

You have to admire those kids who do circular deliveries collecting the wage subsidy while in lockdown eh

Got $350 a week when they probably would have only got a pittance of work was available

[Jantar]

5 mill if they pay back the wage susidy.:cool: HLG did not get the subsidy. Their employees got it. Are you asking the employees to pay it back?

[couta1]

HLG did not get the subsidy. Their employees got it. Are you asking the employees to pay it back? Did Briscoes employees pay it back? Lol

[Beagle]

Wonder how much the cash mountain has shrunk by

Note 1 to the accounts is very interesting....among other things "Placing capital projects on hold"
I can't help but wonder how much they normally spend on capex in a year ?
Maybe the cash mountain is growing ?

[bull....]

i think its outragous that hallensteins paid a dividend and took the wage subsidy at the same time. they should be boycotted for not paying it back

[winner69]

Note 1 to the accounts is very interesting....among other things "Placing capital projects on hold"
I can't help but wonder how much they normally spend on capex in a year ?
Maybe the cash mountain is growing ?

Averages $8m odd a year ....but did spend $20m in 2019 (distribution centre OZ?) but only $7m in 2020

Betcha cash mountain nowhere near $50m next report

[Beagle]

Averages $8m odd a year ....but did spend $20m in 2019 (distribution centre OZ?) but only $7m in 2020

Betcha cash mountain nowhere near $50m next report

I'll take that bet if nowhere near is defined as being outside a range of $40 - $60m. Put a beer on it. I think their financial position will remain extremely robust.
Fact is we know that the ~ $50m on hand at balance date included the interim dividend which had been held back ($9m) so adjusted for that it was $41m.
Supplier payment terms change is likely to be enduring so I will assume no change there at the half year point, no capex, so there's say $5m saved in a so called "normal" half year and the 24 cent divvy to be paid in December is highly likely to be less than the earnings in this six months so all up I think the cash on hand at the half year point will be quite similar to the extremely robust cash position they were in at balance date which represented cash on hand of 83 cps.
(N.B. Depreciation was $8.4m per annum in 2019 before the accounting change came in).

[Cyclical]

I'll take that bet if nowhere near is defined as being outside a range of $40 - $60m. Put a beer on it.
Fact is we know that the ~ $50m on hand at balance date included the interim dividend which had been held back ($9m) so adjusted for that it was $41m.
Supplier payment terms change is likely to be enduring so I will assume no change there at the half year point, no capex, so there's say $5m and the 24 cent divvy to be paid in December is highly likely to be less than the earnings in this six months so all up I think the cash on hand at the half year point will be quite similar to the extremely robust cash position they were in at balance date which represented cash on hand of 83 cps.

And if you lose the bet, Beagle, hopefully it's because they've handed out a fair bit of that cash by way of a special divvy...a possibility I think you may have alluded to a while back :t_up:

[Beagle]

And if you lose the bet, Beagle, hopefully it's because they've handed out a fair bit of that cash by way of a special divvy...a possibility I think you may have alluded to a while back :t_up:

I think that's quite unlikely but keep your eyes open for a record sized interim dividend in April 21 ! I reckon Tim Glasson loves those huge divvies with his 20% stake just as much as other shareholders do :)