HLG - Hallenstein Glasson

[winner69]

Hallensteins didn’t feature in this bit on men’s summer fashions …their gear can’t be ‘cool and crisp’ enough

https://businessdesk.co.nz/article/the-life/fly-guy-summer-menswear-is-cool-and-crisp-with-a-nod-to-the-70s

[clearasmud]

HLG balance sheet will be strong after taking legitimate Covid Govt support and they will now enjoy a robust summer's trading. Looking forward to my dividend to be announced in the next month or so.
Disc: Added some more today as my view is the future growth rate of Glassons Australia and International is not priced into the shares.

Spoke to manager of an Aussie Hallensteins recently (theres only 4)
They still have high hopes for Australia.

[Beagle]

Spoke to manager of an Aussie Hallensteins recently (theres only 4)
They still have high hopes for Australia.

Thanks for that.

[see weed]

Hallensteins didn’t feature in this bit on men’s summer fashions …their gear can’t be ‘cool and crisp’ enough

https://businessdesk.co.nz/article/the-life/fly-guy-summer-menswear-is-cool-and-crisp-with-a-nod-to-the-70s
That makes me smile/snigger. $601 for a pair of rubber slippons. Maybe Hallensteins could import some from China for $2 a pair and sell them for $99 on special:D.

[winner69]

Lady from Glassons yesterday “Pretty gutted nobody queued up overnight outside our Auckland stores, just saying”

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/HLG/381792/357975.pdf

Yesterday I finally got around to reading our new CEO Stuart Duncan's report, (pages 6-9). Its a good read.
I can't help thinking the result they achieved is superb in the exceptionally challenging circumstances that prevailed in FY21 and they are getting set for a really bright future in FY23 and beyond. The well establish very strong growth of Glassons is the secret sauce here that the market is not pricing this correctly in my view.
Very good buying for the long term in my opinion. Can't help wondering if we'll get a dividend announcement soon ? (Was postponed pending reopening of Auckland, NSW and Victoria). Not too worried either way as cash retained in the business will drive growth in the years ahead.

SP has been very sluggish this year but to be honest I am not concerned.

[Waltzing]

Aussi job numbers out and it has taken a hit. Retail over the next 8 weeks in AUS will be a nail biter to see if it holds up.

[fastbike]

From page 7 of the report

"The first eight weeks of the new financial year have seen Group sales decline -18.90% on the prior year, this has been driven predominantly by multiple store closures across both New Zealand and Australia in response to the recent COVID-19 outbreaks in both countries."
This must impact at some stage on the share price ?

[winner69]

From page 7 of the report

This must impact at some stage on the share price ?

Market sees through that as they know there’s going to be a big catch up of pent up demand …..half year could see 26 weeks sales up about 10%

Probably know more in a few weeks time

[nztx]

Market sees through that as they know there’s going to be a big catch up of pent up demand …..half year could see 26 weeks sales up about 10%

Probably know more in a few weeks time


Have you tracked down where our missing dividends are hidden yet - Winner ? ;)

[fastbike]

Have you tracked down where our missing dividends are hidden yet - Winner ? ;)

The December 2020 dividend was announced 25 Sept of that year in the half year update. This time around directors consider it prudent to wait until lockdown is lifted, so could be a while yet.

[winner69]

Love companies that hold their ASM a day or so nefore Christmas ....obviously don't want many to turn up

And at a Rydges --- hope not an old MIQ place

[Beagle]

Yeah I was a bit surprised with the date of the ASM too. I think its the latest in the year its ever been.

A dividend before Christmas would be nice but I'm not over fussed either way. This is a very well run company with a laser focus on doing well over the medium to long run. Tim Glassons 20% stake can be relied upon to mean he has serious skin in the game and the company will be run with shareholders best long term interests at heart. He has massive experience / company stake means he is best placed to know whether its prudent to pay a dividend at this time or not.

[nztx]

Yeah I was a bit surprised with the date of the ASM too. I think its the latest in the year its ever been.

A dividend before Christmas would be nice but I'm not over fussed either way. This is a very well run company with a laser focus on doing well over the medium to long run. Tim Glassons 20% stake can be relied upon to mean he has serious skin in the game and the company will be run with shareholders best long term interests at heart. He has massive experience / company stake means he is best placed to know whether its prudent to pay a dividend at this time or not.


A surprise post-Christmas payout you reckon ? ;)

[dreamcatcher]

Yeah I was a bit surprised with the date of the ASM too. I think its the latest in the year its ever been.

A dividend before Christmas would be nice but I'm not over fussed either way. This is a very well run company with a laser focus on doing well over the medium to long run. Tim Glassons 20% stake can be relied upon to mean he has serious skin in the game and the company will be run with shareholders best long term interests at heart. He has massive experience / company stake means he is best placed to know whether its prudent to pay a dividend at this time or not.

Been an ex industry player for many years I would have to admire their resilience. Tim's 20% of dividends is a reoccurring bonus added to his wage.

[clearasmud]

Been an ex industry player for many years I would have to admire their resilience. Tim's 20% of dividends is a reoccurring bonus added to his wage.

HLG is showing signs of life on this down day.
We are receiving a dividend before Xmas aren't we?
I guess it will be 24c

[nztx]

HLG is showing signs of life on this down day.
We are receiving a dividend before Xmas aren't we?
I guess it will be 24c


Still have to declare one I think .. after northern sector lock down considerations :)

[winner69]

"………error in post

[Balance]

Media says NZD dropped on the RBNZ rate announcement …and continued to slide forvthevrest of the day

That could help HLG margins

Please to explain - HLG is an importer?

[winner69]

Please to explain - HLG is an importer?

Ha ha …got that wrong didn’t I …been a long day

And Hlg share price needed a bit of a push ;)

[Beagle]

https://www.nzx.com/announcements/383632

By my calculations its 85.4% imputed.
I guess they're running a little short of Imputation credits but I would expect that to be rectified with tax payments between now and 31 March 2022 so that the next 24 cent dividend in April 2022 can be fully imputed.

[Balance]

https://www.nzx.com/announcements/383632

Just heading out to do some Black Friday shopping so YESSSSSSSSS!

[winner69]

https://www.nzx.com/announcements/383632

By my calculations its 85.4% imputed.
I guess they're running a little short of Imputation credits but I would expect that to be rectified with tax payments between now and 31 March 2022 so that the next 24 cent dividend in April 2022 can be fully imputed.

Maybe because Glassons making too much in OZ?

[Beagle]

Maybe because Glassons making too much in OZ?
Yeah I started to wonder a bit about that too in terms of imputation percentages going forward. Your point is certainly not lost on me as lets face it, they're really hitting the ball out of the park over there.

We're going to have to "wing" this one for now because its not entirely clear but for what its worth here are the imputation credit account balances (note 6.3 from the last few years accounts).
I note 2021's balance is unusually low.
2021 $3,777
2020 $17,131
2019 $14,167
2018 $18,024
2017 $14,186
2016 $13,045
2015 $13,545

Good to see the dividend announcement as to me (although there's no explicit mention of a trading update), its does imply that things are trucking along in a satisfactory manner despite the lockdown's in previous months.

The announcement has certainly encouraged other dividend hounds to spring out of their kennels in excitement this morning which is nice to see.

[Balance]

Yeah I started to wonder a bit about that too in terms of imputation percentages going forward. Your point is certainly not lost on me as lets face it, they're really hitting the ball out of the park over there.

We're going to have to "wing" this one for now because its not entirely clear but for what its worth here are the imputation credit account balances (note 6.3 from the last few years accounts).
I note 2021's balance is unusually low.
2021 $3,777
2020 $17,131
2019 $14,167
2018 $18,024
2017 $14,186
2016 $13,045
2015 $13,545

Could be worthwhile dual listing in Oz to pass on the franking credits to investors over there.

Will expand the shareholders’ base - another boost to the sp to reach fair value of at least $10.

[see weed]

B..ger. Was hoping that announcement would come out next week. Have been accumulating for the last week but still want another 30,000:mellow:. I was drifting around Sylvia Park yesterday and stood outside Glassons store, for 15 mins., talking to one of the store ladies at the entrance. It was very busy customers going in one entrance and leaving by another exit. Same thing happening at Hallensteins at dressmart Onehunga this morning, very busy, and bought some jeans on special. Sp might get back up to $7.30 at this rate:t_up:.

[peat]

its kind of silly how that announcement affects price because in itself it shouldnt.
obvs reps confidence going forward but we knew that.

[see weed]

its kind of silly how that announcement affects price because in itself it shouldnt.
obvs reps confidence going forward but we knew that.
SP up 26c as I type. Some holders could sell their shares now and get an early div. ;)

[GlennS]

Effectively a double dividend! – 24c divvy plus HLG up 24c this morning.

[peat]

SP up 26c as I type. Some holders could sell their shares now and get an early div. ;)

yes but the money was always there lol

[peat]

Effectively a double dividend! – 24c divvy plus HLG up 24c this morning.

dont you think it might go down on ex date though?

[Beagle]

its kind of silly how that announcement affects price because in itself it shouldnt.
obvs reps confidence going forward but we knew that.
I think it removes a little bit of doubt about how they've been trading since balance date. Put it this way, if things were grim they wouldn't be paying it or the amount would be less than last year. The fact the dividend is the same as last year (notwithstanding the extraordinary length of lockdowns in Auckland, NSW and Victoria this year), speaks for itself and is something I find quite encouraging.

I do worry a bit about see weed hanging around outside women's clothes shops though...I think he has a bit of a reputation as a ladies man ;)

[winner69]

its kind of silly how that announcement affects price because in itself it shouldnt.
obvs reps confidence going forward but we knew that.

Seems normal behaviour (at least more times than not) that share prices go up by the size of an announced dividend …even KPG managed that trick…and look at GXH today

Just casual observations but a common occurrence …seems punters like buying dividends ..but no doubt market psychology is more complicated than that

[GlennS]

temporarily probably, but up 4.7% today when the market as whole is down 0.7% must bring a smile to the face of HLG investors. ��

[Waltzing]

HLG showing its pedigree and confidence.. With Phizer's new tablet another 12 to 16 months and this will be long in the rear mirror.

[Rawz]

Good to see HLG getting some runs on the board. Catching up to the other NZX retailers. Was looking dire for awhile there

[Waltzing]

retail is taking a bit of a breather as Bris, KMD ,WHS, MHJ all slipping perhaps on the prospect of incremental OCR rises.

[Rawz]

retail is taking a bit of a breather as Bris, KMD ,WHS, MHJ all slipping perhaps on the prospect of incremental OCR rises.

Probably not wrong Waltz. Also with living with covid maybe some retail money transferring to travel

[see weed]

dont you think it might go down on ex date though?
It may drop a wee bit, but not to worry, it should recover pretty fast. After the Christmas and New Year break and everybody back at work by half way through January and about 2 months after that, HLG will probably declare another dividend late March early April:t_up:. Drifted past Hallensteins Sylvia Park again today and was told by the same guy I was talking to yesterday, they had doubled their normal Friday income to $46,000 + for the day and still 2 hours till closing time. He also said they were selling to a lot more younger people from 10 years and up. It all sounds good to me, and wouldn't be surprised to see sp at $7.50 in the near future:).

[nztx]

Anyone looked at past years FY HLG Dividends ?

Partial Imputation for 17 Dec

Still very impressive pattern

47.0 cps for FY 2021 appears to be the highest across the past 6 years
with 44.0 cps for each of FY 2018 & 2019

[Waltzing]

bit of buying next week as the Dow takes a HIT.

Should be buys on the NZX and ASX.

The best prospect for retail is that inflation wont be at 5% in 2 years times.

The US 10 Year took a hit over night as markets took a pounding in europe..

You could see an opportunity to pick up some more retail next week.

Anyone who thought that with Delta a return to normal was coming soon has been dreaming.. It will take the pill maybe 2 years to wipe it out..

https://www.stuff.co.nz/business/127058559/the-2022-economic-muddle-and-a-world-that-is-not-getting-back-to-normal

[Habits]

I'm a happy dreamer Mr Waltz... another wait and see game coming

[Muse]

HLG a marvelous company for sure. Not a holder as invested a big whack into briscoes a while ago (& a predatory stake in KMD near the bottom) and always been content with that exposure, and watched HLG rightfully soar upwards. But regarding the retail sector more generally I'd be loathe to invest into anything at these levels. While not rocket science and obvious to many I was reminded again on why by a succinct article by Mark Lister this AM, summed up in a few bullet points:

* Inflation rising & the OCR to spend the next 3 years rising
* Massive household debt built up on house price run and high housing sales
* Approximately 2/3rds of fixed rate mortgages will be repriced in next 12 months
* For someone with an $700k mortgage the incremental hit @ a 5% mortgage will be $12,500, and when adjusting for marginal tax rate thats an $18,000 hit to after tax income
* That's a lot of money, will be a shock, and will have an impact on confidence, spending and the housing market.

I guess couple that with travel (maybe/maybe not thanks new covid strain) a lot of money likely to be rediverted from retail. You can't tell me that's not a worry.

I like blue chip retail exposure but I certainly like to know what side of the cycle I am buying on. I'm a long term holder so will probably suck it up but if I were a trader probably think about taking some profits in the near term.

[Waltzing]

And with that summary above one can understand why MR B is moving some money overseas.

Travel and Tourism will recover else where with the introduction of the Phizer little pill.

Ireland has a lower tax rate if you want to register any business in europe.

Government debt will only rise from here and Treasury has warned months ago, raise taxes or stop spending..

Retail should still perform well into april... and then a winter of ...

HLG give exposure to the AUS market in a BIG way and local retail does not.

You can invest even at these prices and get a very good exposure to the AUS retail market and low interest rates.

Its a Proxy share for AUS.

NSW has reached 94.5 double jabbed and no traffic light system. The aussie are out shopping already!!!

[Beagle]

Well said Waltz.

HLG trades at just 13 times last years earnings, cum a 24 cent dividend and has a superb track record of very strong growth with Glassons Australia over many years even during the pandemic ! It is second to none with its online systems, takes Govt support its entitled too, has no debt, is well managed and very well placed to weather the Covid pandemic.

Retail does have some headwinds from higher interest rates but its not all a one sided equation and investors with billions of term deposits will have more money to spend. In addition I expect new variants of the virus to prove to be an ongoing challenge for international ravel with the result that we'll see retail spend replacing a fair degree of international travel spend for quite some time to come.

To me, new variants were always going to be part of this and I have been investing accordingly, expecting that this is a multi year event and we're not going back to 2019 normality any year soon. Retailers with international diversification, first class online sales and delivery systems and management who are laser focused on the seriousness of the situation, (not for example sidetracked by excessive attention to greenwashing and ESG matters) are best placed.

The owners eye is most important here. Tim Glasson with his 20% stake and his son are massively experienced here and our new CEO Stuart Duncan seems like a very bright guy.

I take a lot of comfort from the above and the fact that HLG is the NZX's oldest listed company...they have traded well through all sorts of challenges over many, many decades and fundamentally they're extremely good value for a company with superb growth prospects going forward.

[Rawz]

HLG trades on 13 historical p/e which is the highest p/e they have had for 8 years. When HLG announced FY21 results they said; "the Group anticipates profitability in the current year will be adversely impacted compared to the period just completed. We will continue to be cautious in regard to the future impacts of COVID-19".

So could be trading on a forward p/e of 14 or 15? Too much?

Hopefully an update is provided at the annual meeting later this month and hope its really positive with indication that there has been a massive catch up in sales! Hopefully no more lockdowns during FY22 as clothing doesnt sell well when people are locked down. No point in dressing up in new gear! A lot of hopes to come true or SP will sit around 7 bucks for another year

[Biscuit]

........ I take a lot of comfort from the above and the fact that HLG is the NZX's oldest listed company.......

Hazard a guess what's NZX's second oldest listed company? Apparently it is Mercer Group, listed 1959.

Brian Gaynor: NZX shelf life shockingly brief for too many - NZ Herald (https://www.nzherald.co.nz/business/brian-gaynor-nzx-shelf-life-shockingly-brief-for-too-many/N4Y3ZAEYTV7ZHK4EOMZSURZFRQ/)

I wonder if Mercer shareholders take comfort from the long listing of their company?

[nztx]

Hazard a guess what's NZX's second oldest listed company? Apparently it is Mercer Group, listed 1959.

Brian Gaynor: NZX shelf life shockingly brief for too many - NZ Herald (https://www.nzherald.co.nz/business/brian-gaynor-nzx-shelf-life-shockingly-brief-for-too-many/N4Y3ZAEYTV7ZHK4EOMZSURZFRQ/)

I wonder if Mercer shareholders take comfort from the long listing of their company?


Mercer is now known as MHM Automation

[Beagle]

In 2018 they traded at $6.30 on eps of 45.87, (PE of 13.7). Since then we've seen three more years proof of the outstanding growth of Glasson's Australia which is the key to understanding the attractiveness of the investment case for HLG. I think HLG doesn't get the recognition it deserves as a GARP stock, (growth at a reasonable price). When you have a good look at the very encouraging growth rate in Aust over the last 4-5 years and consider the very low store penetration rate there I get quite excited about the growth prospects going forward and that's before we consider their expansion plans into America. Current year indications subtract just 10 cents per share off the DCF value of HLG in my opinion.

When I first got into HLG in a sizeable way in August 2016 @ ~ $2.75 all I was really expecting was the gross 15% yield, which in and of itself was an absolutely compelling reason to invest...it really was just a pure yield buy for me. Its been really satisfying to see how they're grown Glassons Australia since then and I'm very confident in the medium to long term that gratifying growth will continue. Here's the thing. HLG is not priced as a growth stock based on FY21 earnings and they have a very good record of showing great resilience with their trading performance in this pandemic.

The fabulous dividends are frankly a huge help to me in being a very patient investor, (patience doesn't come naturally to me lol).

[winner69]

You can see why Glassons AU excites Beagle - stunning sales growth since Di sorted them out 4 to 5 years ago

And as Beagle says penetration is low - like <1% of the addressable market - huge opportunity going forward


Pity Hallensteins remains a dog and a stilla drag on group performance

[Beagle]

Deeply impressive. Let's not forget that they were struggling to break even with Glasson Au in 2014-2016. Contrast that now with just over 49% of group profitability coming from over the ditch! Glassons Au earned 27.5 cps last year and the CAGR in eps over the last 3 years has been 27% per annum. (Can't use my standard 5 year eps growth measurements as growth in eps from a loss of $1.9m in 2016 gives a nonsense answer).

What we can say with quite some assurance is that they have really cracked the Au market and that much was not completely obvious back in 2018 when the shares were trading on a PE of 13.7. Further, the potential for ongoing strong growth in Australia with their very lite existing store footprint and a total addressable market of more than 5 times the size here seems obvious.

In my opinion the key to understanding the value embedded within the group is to break it into valuing two segments.
Choose you own PE for Glassons Au which had 27.5 cps earnings last year and eps CAGR of 27% per annum.
Then choose your PE for the rest of the group (eps 28 cps last year) that has been ostensibly flat for many years.

There is no analyst coverage so people have to work this out for themselves.

Do I think Balance has become unbalanced for thinking of this in due course as a $10 stock ? Absolutely not !!...but good things take time and in the meantime there's those handsome dividends to enjoy :t_up:

[Waltzing]

Been a retail trading stock for us. Now with NZ interest rates getting far ahead of the rest of the world and a long way ahead of AUS.

Its a defensive trade on one country draining liquidity and another country not..

Therefore as the authority on this stock MR B says growth is not built in therefore this coming week its a BUY on the DIPS if not in the portfolios.

[see weed]

You can see why Glassons AU excites Beagle - stunning sales growth since Di sorted them out 4 to 5 years ago

And as Beagle says penetration is low - like <1% of the addressable market - huge opportunity going forward


Pity Hallensteins remains a dog and a stilla drag on group performance
Hallensteins Sylvia Park sold $46,000 of product last Friday, $37,000 yesterday and probably the same today. Not to mention all the other stores. Sounds like a good little dog at the moment. They are catering for the younger now from 9 or 10 year olds and upwards.

[Muse]

Deeply impressive. Let's not forget that they were struggling to break even with Glasson Au in 2014-2016. Contrast that now with just over 49% of group profitability coming from over the ditch! Glassons Au earned 27.5 cps last year and the CAGR in eps over the last 3 years has been 27% per annum. (Can't use my standard 5 year eps growth measurements as growth in eps from a loss of $1.9m in 2016 gives a nonsense answer).

What we can say with quite some assurance is that they have really cracked the Au market and that much was not completely obvious back in 2018 when the shares were trading on a PE of 13.7. Further, the potential for ongoing strong growth in Australia with their very lite existing store footprint and a total addressable market of more than 5 times the size here seems obvious.

In my opinion the key to understanding the value embedded within the group is to break it into valuing two segments.
Choose you own PE for Glassons Au which had 27.5 cps earnings last year and eps CAGR of 27% per annum.
Then choose your PE for the rest of the group (eps 28 cps last year) that has been ostensibly flat for many years.

There is no analyst coverage so people have to work this out for themselves.

Do I think Balance has become unbalanced for thinking of this in due course as a $10 stock ? Absolutely not !!...but good things take time and in the meantime there's those handsome dividends to enjoy :t_up:

I’d say there is one analyst (at least) - thats you beagle. Good commentary.

[Waltzing]

Changing retail trends in the US. After 6 weeks still havnt had a Off/On road trek repaired with parts shipping from AUS. Supply chains are broken for some types of products.

https://www.cnbc.com/2021/11/28/shoppers-are-buying-from-resale-retailers-more-than-ever-heres-why.html

[LaserEyeKiwi]

Had some money come into today - very happy to get back into HLG at essentially the same price I sold out at months ago. Looking forward to that upcoming Divi.

I find all the chatter about rising mortgages rates absolutely hilarious. Despite the recent increases, rates are still near all time lows, and far below pre-pandemic level. Anyone thinking a 1 yr fixed rate of 3.65% is somehow a burden is in dreamland!

13264

[boysy]

Had some money come into today - very happy to get back into HLG at essentially the same price I sold out at months ago. Looking forward to that upcoming Divi.

I find all the chatter about rising mortgages rates absolutely hilarious. Despite the recent increases, rates are still near all time lows, and far below pre-pandemic level. Anyone thinking a 1 yr fixed rate of 3.65% is somehow a burden is in dreamland!

13264

Unless you are a first buyer or any one else up to their eye balls in debt (Not sure how may people out there with $1M+ mortgages are getting 15-20k pay rises this year to simply afford the higher interest costs), i would expect these parties and their Children could very well be the stereotypical HLG shopper .....

[Muse]

Had some money come into today - very happy to get back into HLG at essentially the same price I sold out at months ago. Looking forward to that upcoming Divi.

I find all the chatter about rising mortgages rates absolutely hilarious. Despite the recent increases, rates are still near all time lows, and far below pre-pandemic level. Anyone thinking a 1 yr fixed rate of 3.65% is somehow a burden is in dreamland!

13264

yeah I'm not so sure about that but regardless HLG's australian exposure is attractive. Their interest rates outta rise slower than ours but HLG's ability grow faster than adverse effects from inflation/interest rates is an interesting one to consider.

[LaserEyeKiwi]

Unless you are a first buyer or any one else up to their eye balls in debt (Not sure how may people out there with $1M+ mortgages are getting 15-20k pay rises this year to simply afford the higher interest costs), i would expect these parties and their Children could very well be the stereotypical HLG shopper .....

You are understating how ridiculously cheap mortgages were over the last 12 months when they briefly even broke below 2%. In many cases even highly indebted homeowners were paying far less than they would in rent. Now with 1 & 2 year rates in the 3.5%-4% range, even highly indebted people are still facing very low mortgage interest rates by any standard. It’s basically almost the same payments on a $1 million mortgage now as people were paying on $600,000 6 years ago.

And very few homeowners are anywhere near that level of debt ($1 million) - Instead most home owners are sitting on huge equity increases of several hundred thousand dollars on their properties over the last 12 months, creating a massive wealth effect.

Meanwhile, the 40% of the population who are renting have seen minimal rent increases while their wages have increased significantly, and unemployment has dropped to near zero for the “employable” population.

Household savings are at all time highs while credit card balances are at ten year lows and overseas travel still remains firmly off the table for the year ahead.

Am I worried about NZ retail industry. Not at all.

[Rawz]

I think the retail dash is largely done. All nzx retailers had 30-50% gains this year. Not HLG and maybe KMD but certainly WHS, BGR and MHJ.

If you are staying retail you want it to be in growth mode and Beagle and W69 have made the case for glassons across the ditch, must admit it’s quite compelling.

HLG probably be nzx retail stock winner next year.

LEK don’t underestimate the pinch of rising rates. There is a reason the reserve bank puts rates up. Sucks a lot of money out of household spending budgets

[LaserEyeKiwi]

I think the retail dash is largely done. All nzx retailers had 30-50% gains this year. Not HLG and maybe KMD but certainly WHS, BGR and MHJ.

If you are staying retail you want it to be in growth mode and Beagle and W69 have made the case for glassons across the ditch, must admit it’s quite compelling.

HLG probably be nzx retail stock winner next year.

LEK don’t underestimate the pinch of rising rates. There is a reason the reserve bank puts rates up. Sucks a lot of money out of household spending budgets

Yes i know the intent of rising OCR is to attempt to cool the economy.

However the simple fact is that OCR and interest rates are lower than 2019, and the population has lower retail debt, higher savings, effectively full employment, and a much higher amount of discretionary income available for retail spending than in 2019. A massive rise in government spending vs 2019 level also in support.

Yes I can see spending vs 2020/2021 is a big unknown as to how exactly that comparison shakes out, but I have little doubt NZ retail spending in the next 12 months will still be significantly higher than 2019 levels.

[see weed]

Hey Beagle, shall we see if we can massage that sp back to $7.30. I'll start the ball rolling and put in a 4000 order:).

[Beagle]

Hey Beagle, shall we see if we can massage that sp back to $7.30. I'll start the ball rolling and put in a 4000 order:).

I was hoping to buy some more at $7 with irrational fear over the new Covid variant.

[Waltzing]

Back channel to May 2017 the chart right now is in the bottom vector if you ignore the covid dip which should be backed out of the charts.

Which means all price movement data from March 2020 should be ignored really until about 12 months from now.

Its a buy unless this bottom price point breaks down.

[see weed]

I was hoping to buy some more at $7 with irrational fear over the new Covid variant.
The trouble with HLG is it is too illiquid and is like watching a 10 meter long snail race, and as you know I like a bit of action, which reminds me, have been invited to join a booked table at the Crab Shack on Sat. afternoon. Will be interesting to see people out and about on Friday, out of lock down shopping and pubbing and cafeing. It might be like a mini VE day:t_up:.

[see weed]

I was hoping to buy some more at $7 with irrational fear over the new Covid variant.
It may or may not go back to $7, unless you wait until after the 24c div, but then HLG is due to pay another div of about 24c again a few months later. And a good YLD of 6.4% plus. I think you were right by saying, quite a few months ago, that HLG should have a share split.

[Waltzing]

"HLG should have a share split."

YES! its a shocker at the moment.. 1 : 3 or 4 and bring it down to MHJ and KMD range..

[nztx]

"HLG should have a share split."

YES! its a shocker at the moment.. 1 : 3 or 4 and bring it down to MHJ and KMD range..


I want to see some more shocking results to shock the SP up towards FPH / EBO / MFT levels ;)

Pressure on a small vessel (full of HLG shares) is better than less pressure on a larger jar :)

[Waltzing]

less shares means harder to trade in any YTDQTY.

[Balance]

The trouble with HLG is it is too illiquid and is like watching a 10 meter long snail race, and as you know I like a bit of action, which reminds me, have been invited to join a booked table at the Crab Shack on Sat. afternoon. Will be interesting to see people out and about on Friday, out of lock down shopping and pubbing and cafeing. It might be like a mini VE day:t_up:.

“The stock market is a device for transferring money from the impatient to the patient.” Warren Buffett

“Time is the friend of the wonderful business, the enemy of the mediocre.”

“One clear and simple investment edge that anyone can choose to take advantage of is patience.”

Been quietly adding on a few HLG shares over the last few months on the days the share was sold down by the impatient.

[Rawz]

Has HLG advised how many stores they are looking to open in Aussie over the next 12 months?

[Waltzing]

Slowly Slowly Catchy Money...

[Beagle]

“The stock market is a device for transferring money from the impatient to the patient.” Warren Buffett

“Time is the friend of the wonderful business, the enemy of the mediocre.”

“One clear and simple investment edge that anyone can choose to take advantage of is patience.”

Been quietly adding on a few HLG shares over the last few months on the days the share was sold down by the impatient.
Great post mate. I like your style, I have been doing the same.


The trouble with HLG is it is too illiquid and is like watching a 10 meter long snail race, and as you know I like a bit of action, which reminds me, have been invited to join a booked table at the Crab Shack on Sat. afternoon. Will be interesting to see people out and about on Friday, out of lock down shopping and pubbing and cafeing. It might be like a mini VE day:t_up:. I wouldn't be averse to a share split but I doubt it will happen.


Slowly Slowly Catchy Money...
I really like the way they are very cautiously expanding. With HLG management, (unlike some companies), there is never any doubt whatsoever that they are acting in the best interests of shareholders at all times. I put this down to the the retail legend Tim Glasson having his 20% stake and his own son James doing such an outstanding job running the Australian operation. James doesn't have any problem with finding a great mentor for advice any time he wants does he !

[see weed]

“The stock market is a device for transferring money from the impatient to the patient.” Warren Buffett

“Time is the friend of the wonderful business, the enemy of the mediocre.”

“One clear and simple investment edge that anyone can choose to take advantage of is patience.”

Been quietly adding on a few HLG shares over the last few months on the days the share was sold down by the impatient.
Likewise here. Have bought 11 parcels of shares over the last couple of months. Can't see sp dropping too much over the next few months, with 2 juicy 24c divs in the pipe line to be paid out in the next 4 months.

[LaserEyeKiwi]

If one is invested in a high dividend yield company, and intends to reinvest all dividends back into said company - then it should be viewed as a good thing for the share price to be lower, provided there is no underlying change in the company fundamentals and growth expectations.

Why is it good for the share price to be lower? For the obvious reason that if you are reinvesting dividends into the company then the lower the share price the more shares you get from the re-invested dividends.

That is the viewpoint I have for all the high dividend payers I hold.

[BIRMANBOY]

Did someone hack into Balance's a/c? Well excellent post so whomever you are keep it up. :D
“The stock market is a device for transferring money from the impatient to the patient.” Warren Buffett

“Time is the friend of the wonderful business, the enemy of the mediocre.”

“One clear and simple investment edge that anyone can choose to take advantage of is patience.”

Been quietly adding on a few HLG shares over the last few months on the days the share was sold down by the impatient.

[Waltzing]

" reinvesting dividends into the company then the lower the share price the more shares you get from the re-invested dividends."

interesting i wonder what MR B thinks about this investment strat...

well after the panic sell off on the DOW last night the HLG NZX retail is UP!!!


AUS house hold saving are up....big increase in bank deposits.

[Panda-NZ-]

Even more delays to plane travel so good for retailers.

No travelling anywhere, ever again.

[Waltzing]

special equipped 747's or A380's will get you there...

JULY 2022... sky's will be standing room only..

[Beagle]

" reinvesting dividends into the company then the lower the share price the more shares you get from the re-invested dividends."

interesting i wonder what MR B thinks about this investment strat...

well after the panic sell off on the DOW last night the HLG NZX retail is UP!!!


AUS house hold saving are up....big increase in bank deposits.

I've signed up to all dividend reinvestment plans for companies that have them in which I am invested. Some companies have such a well oiled business model they don't need fresh capital from DRIP's so you have to run you own program ;)

[Waltzing]

Well there you have it folks... straight from the horses mouth... ummm dogs bark...and a wag of the tail.

Well never see 7.00 again..:eek2:

[winner69]

ERoad seen as a better bet than HLG and added to the NZX50

HLG will just have to try harder

[Beagle]

Not worried, slow and steady wins the race. WHS missed out too.

[percy]

ERoad seen as a better bet than HLG and added to the NZX50

HLG will just have to try harder

I think going by their chart, ERD are going to have to get their A into G to reverse the downtrend their share price is in, before they have a chance to enter the NZ50.

[Rawz]

HLG poor man’s MHJ. Maybe next year

[Beagle]

I think going by their chart, ERD are going to have to get their A into G to reverse the downtrend their share price is in, before they have a chance to enter the NZ50.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NZXO/384135/361026.pdf

[percy]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NZXO/384135/361026.pdf

Well they may have to get their A into G to stay there.?..

[Ferg]

Well they may have to get their A into G to stay there.?..

It's a relatively hard club to get into and consequently hard to get out of unless there something drastic happens.

[Waltzing]

" slow and steady wins the race"

but beagles are never slow else they would have been replaced as a hunting dog of choice....

[winner69]

It's a relatively hard club to get into and consequently hard to get out of unless there something drastic happens.

HLG got booted out of the club a few years ago.

PEB replaced them ….lol

[LaserEyeKiwi]

God knows how sky tv remains in the index…

[winner69]

Even allowing for the shareprice still being CD it’s not too far away from it’s all time high

No doubt a sales update at ASM ……that’ll get things moving when punters see again how fast Glassons AU are growing

[Beagle]

“The stock market is a device for transferring money from the impatient to the patient.” Warren Buffett

“Time is the friend of the wonderful business, the enemy of the mediocre.”

“One clear and simple investment edge that anyone can choose to take advantage of is patience.”

Been quietly adding on a few HLG shares over the last few months on the days the share was sold down by the impatient.

For me this was the post of the week, last week. This particular highlighted quote from Warren Buffet is not one I had committed to memory until you posted it. Thank you. Reflecting on this over the weekend this is something that's very apt for HLG.

[LaserEyeKiwi]

Not sure if mentioned already, but October retail sales in Australia had this nugget:


Clothing, footwear and personal accessory retailing soared 27.7%

[winner69]

Not sure if mentioned already, but October retail sales in Australia had this nugget:

Clothing, footwear and personal accessory retailing soared 27.7%


The joy of seasonality adjusted numbers .... love it

In actual $s October up 4.3% on last year. At least it was a positive month after 3 consecutive months of negative

[winner69]

The joy of seasonality adjusted numbers .... love it

In actual $s October up 4.3% on last year. At least it was a positive month after 3 consecutive months of negative

Doesnt really matter what the number is because Glassons AU are killing the competition and growing share big time

Hallensteins probably a drag still but they don't have too many stores anyway

[LaserEyeKiwi]

The joy of seasonality adjusted numbers .... love it

In actual $s October up 4.3% on last year. At least it was a positive month after 3 consecutive months of negative

I thought it was referring to month on month increase from Sep to Oct?

[winner69]

I thought it was referring to month on month increase from Sep to Oct?

Yes it was .... 27.7% increase in October from September in seasonally adjusted terms (actual $ increase was even more impressive at 34.6%)

Huge growth .... soaring as the commentary goes

But in reality October month was only 4.3% on last year (and the way Briscoes and Warehouse talk was only 2.2% up on Oct 2019)

First 3 months HLG fiscal year is Aug/Sep/Oct - AU sector sales for these 3 months are down 7.8% on 2020 and down 14.3% down on same 3 months in 2019. Lock downs still hurting but good sign numbers are looking more positive

It seems that clothes buying has not been top of mind for Australians .... sector recovery much slower than other discretionary spending

[Rawz]

It seems that clothes buying has not been top of mind for Australians .... sector recovery much slower than other discretionary spending

That's because there is no point in buying clothes when you cant go out. I have said this before. BRG WHS and MHJ sell goods that you can actually use during lockdown. New t-shirts, shorts, dresses etc... why bother..

Anyways im getting worried about retail in general. I went out in the weekend and the shops looked so so busy. Easy to see santa for the little ones. Usually have to queue for an hour. Maybe christmas trading will be a flop?

[winner69]

That's because there is no point in buying clothes when you cant go out. I have said this before. BRG WHS and MHJ sell goods that you can actually use during lockdown. New t-shirts, shorts, dresses etc... why bother..

Anyways im getting worried about retail in general. I went out in the weekend and the shops looked so so busy. Easy to see santa for the little ones. Usually have to queue for an hour. Maybe christmas trading will be a flop?

There was signs of weakness in NZ retail sales number in May/June/July and then lock downs arrived ....so Rawz you could be right about getting worried about retail in general

[winner69]

That's because there is no point in buying clothes when you cant go out. I have said this before. BRG WHS and MHJ sell goods that you can actually use during lockdown. New t-shirts, shorts, dresses etc... why bother..

Anyways im getting worried about retail in general. I went out in the weekend and the shops looked so so busy. Easy to see santa for the little ones. Usually have to queue for an hour. Maybe christmas trading will be a flop?

I wouldn't think queuing up and sitting on santa's lap would be the safest thing to do in these covid times ..... though I haven't been to see santa for years

[winner69]

Rawz - bear in mind that this century on a rolling 4 quarter basis Core Retail sales in NZ have never gone backwards .... growth fell to 0.1% once

So your 'worry' may only mean subdued sales growth ..... but in saying that many retailers plead poverty when this happens

[BlackPeter]

I wouldn't think queuing up and sitting on santa's lap would be the safest thing to do in these covid times ..... though I haven't been to see santa for years

Heard recently on the radio that 700 Santas died last year alone in the US of Covid. Dangerous job - while this year might be better (at least they had a chance to vaccinate) it might be better they stop this nonsense before the world runs out of Santas ... which probably would not be good for business ...

https://www.koin.com/news/health/coronavirus/bah-humbug-covid-takes-a-toll-on-santa-claus/

[Rawz]

Rawz - bear in mind that this century on a rolling 4 quarter basis Core Retail sales in NZ have never gone backwards .... growth fell to 0.1% once

So your 'worry' may only mean subdued sales growth ..... but in saying that many retailers plead poverty when this happens

Thats interesting W69.

I wonder if the rolling avg will change this time and show that it has gone backwards? Because of the covid situation. In normal times we usually have 300k overseas visitors in the country on any given month. Spending a portion of their travel money in retail shops. During initial covid outbreak and right up until March this year we have had less than 10k per month. The nz consumer revenge spend covered last year but I am now starting to think that all that pent up demand is waning and some tough OR sluggish times are ahead for retail in nz and aus.

HLG management said profits will be down this year compared to last. Could be trading on a high 14-15 forward p/e? Probably too much for retail ay?

Disc. Hold WHS and MHJ but posting my thoughts on retail to see the counter arguments

[Beagle]

Deeply impressive. Let's not forget that they were struggling to break even with Glasson Au in 2014-2016. Contrast that now with just over 49% of group profitability coming from over the ditch! Glassons Au earned 27.5 cps last year and the CAGR in eps over the last 3 years has been 27% per annum. (Can't use my standard 5 year eps growth measurements as growth in eps from a loss of $1.9m in 2016 gives a nonsense answer).

What we can say with quite some assurance is that they have really cracked the Au market and that much was not completely obvious back in 2018 when the shares were trading on a PE of 13.7. Further, the potential for ongoing strong growth in Australia with their very lite existing store footprint and a total addressable market of more than 5 times the size here seems obvious.

In my opinion the key to understanding the value embedded within the group is to break it into valuing two segments.
Choose you own PE for Glassons Au which had 27.5 cps earnings last year and eps CAGR of 27% per annum. 30 ?
Then choose your PE for the rest of the group (eps 28 cps last year) that has been ostensibly flat for many years. 11 ?

There is no analyst coverage so people have to work this out for themselves.

Do I think Balance has become unbalanced for thinking of this in due course as a $10 stock ? Absolutely not !!...but good things take time and in the meantime there's those handsome dividends to enjoy :t_up:

I answered your question a while back Rawz. To help you out I have added common multiples for stocks with CAGR's in blue. I'll leave you to do the maths.

[Waltzing]

really its a BARGAIN still...

AUS OCR isnt going anywhere for a while until inflation data Kanga kicks the F.... out of the central bank...

Bit like china got sick of trying the thump the heck out of them... KANGA's just bounce back.... they just dont know when there beaten..]

They are loud... and not silly... just look at that AUSSI icon...actress Rebel Watson.. she just never gives up..

Aussi are going to shop and nothing is going to stop them...

[Rawz]

I answered your question a while back Rawz. To help you out I have added common multiples for stocks with CAGR's in blue. I'll leave you to do the maths.

Ah yes I forgot about this post thanks for the reminder Beagle, its an excellent way of breaking down the lofty (lol) multiple. Okay I accept the HLG multiple is fair.

I think I was just thrown by my trips around Auckland this weekend just gone. Got me down on retail in general. I feel like my head/gut is firmly with the majority of how middle class NZ is thinking and i/we spent up large last 12 months. New fridge, new home office setup, new couch & ottoman, new trampoline, new bikes, new dining room table and chairs omg im scaring myself as the list could go on lol- also got some art work. Now I dont really need to buy anything for awhile. Looking to do more restaurant/bar spending and domestic tourism instead.

I think construction, service sector and financials could be better home for money going into 2022. Retail has had a great year after all. Could be flat now.

[Beagle]

Ah yes I forgot about this post thanks for the reminder Beagle, its an excellent way of breaking down the lofty (lol) multiple. Okay I accept the HLG multiple is fair.

I think I was just thrown by my trips around Auckland this weekend just gone. Got me down on retail in general. I feel like my head/gut is firmly with the majority of how middle class NZ is thinking and i/we spent up large last 12 months. New fridge, new home office setup, new couch & ottoman, new trampoline, new bikes, new dining room table and chairs omg im scaring myself as the list could go on lol- also got some art work. Now I dont really need to buy anything for awhile. Looking to do more restaurant/bar spending and domestic tourism instead.

I think construction, service sector and financials could be better home for money going into 2022. Retail has had a great year after all. Could be flat now.

I don't disagree with you mate...people have spent up large on nesting in the last 2 years but not much on apparel :D Surely all the handsome and pretty young people will want new outfits to make a splash ? https://www.glassons.com/

[winner69]

Hope Grant wasn’t advising some not to go to Glassons or Hallensteins

New Zealand's private debt levels remain high compared to the rest of the world and some borrowers will have to "cut their cloth" with rising interest rates, Deputy Prime Minister Grant Robertson says.

https://www.nzherald.co.nz/business/wallet-squeeze-high-home-loan-rates-will-mean-some-have-to-cut-their-cloth-grant-robertson-says/G65EVGR5T47RE7EK5AEABA7CIU/

[Waltzing]

"private debt levels"

of course they are...

pot calling something else black.... HLG is AUS powered, who cares... its the AUSSI retail shopper that powers HLG.

[nztx]

it took a while for the market to recognise HLG SP was Ex Div today - anyone else notice that ? ;)

[Beagle]

it took a while for the market to recognise HLG SP was Ex Div today - anyone else notice that ? ;)

Yes but I am holding long term and not interested in trading this. I bought a few more cum divvy and am happy to add some more on any untoward weakness.

[winner69]

it took a while for the market to recognise HLG SP was Ex Div today - anyone else notice that ? ;)

Weird eh …early trades look like punters were unaware of that ….maybe a bonus for a few sellers

[see weed]

Yes but I am holding long term and not interested in trading this. I bought a few more cum divvy and am happy to add some more on any untoward weakness.
Same here, not enough buyers anyway. Very illiquid. It is getting close to your $7 BBB= Beagle Buy Back. Looking forward to next div in 16 weeks. SP will zoom back up after new years to catch the next wave. Funny how a few thousand shares can push sp down 25c. Beagle, the oysters I had last Saturday at the Crab Shack were quite big about 6 to 7 cm long by about 2 cm thick. Lucky I got a big mouth:eek2:. They were a bit dearer now $3 each, and half price jugs of beer, happy hour 4pm to 8pm.

[Beagle]

Same here, not enough buyers anyway. Very illiquid. It is getting close to your $7 BBB= Beagle Buy Back. Looking forward to next div in 16 weeks. SP will zoom back up after new years to catch the next wave. Funny how a few thousand shares can push sp down 25c. Beagle, the oysters I had last Saturday at the Crab Shack were quite big about 6 to 7 cm long by about 2 cm thick. Lucky I got a big mouth:eek2:. They were a bit dearer now $3 each, and half price jugs of beer, happy hour 4pm to 8pm.

Sounds good mate. Probably a bit late for a catch-up before Christmas but lets do something in the new year.

[Waltzing]

OCR hikes might be hitting this one but the Yield could become very very inviting..

[see weed]

Sounds good mate. Probably a bit late for a catch-up before Christmas but lets do something in the new year.
Oyster and Chop :cool:

[Beagle]

Oyster and Chop :cool:

Better not be a politically incorrect dog.

[Waltzing]

cheap as chips....

[dreamcatcher]

cheap as chips....

As our NZ dollar

[Beagle]

Learned a new term yesterday "Peacocking" The meaning is self evident and after being cooped up for such a long time I think all the young shiny people will be really keen to buy new clothes and do exactly that. I predict a boom summer for apparel sales.

[winner69]

my goodness gracious - from the November Electronic Card data for November --- apparel, up $119 million (53.5 percent)

'Peacocking' really does happen

[Rawz]

my goodness gracious - from the November Electronic Card data for November --- apparel, up $119 million (53.5 percent)

'Peacocking' really does happen

From October? Or? What’s the adjusted number?

[Beagle]

my goodness gracious - from the November Electronic Card data for November --- apparel, up $119 million (53.5 percent)

'Peacocking' really does happen

WOW !! Looks like people are really going to get out and about and strut their stuff on the social scene this summer.

[Balance]

WOW !! Looks like people are really going to get out and about and strut their stuff on the social scene this summer.

HLG would know that when the 24c dividend was declared.

Then, there’s Australia to come.

[winner69]

From October? Or? What’s the adjusted number?

The 53.5% is November v October on seasonally adjusted numbers

In actual dollars sales up 65% -- wow

While watching the races later on might run the HLG share price through a seasonal adjustment model to see what it is now.

[Muse]

The 53.5% is November v October on seasonally adjusted numbers

In actual dollars sales up 65% -- wow

While watching the races later on might run the HLG share price through a seasonal adjustment model to see what it is now.

That is good news anyway you slice it. I wouldnt be surprised if consumer buying patterns have changed a little bit, pulling forward sales from dec, as online shopping increases, and people are wary of shortages, but around the edges stuff.

This release coincides with a report just released by UBS Labs summarising a poll of 1500 and what they expect to spend big on. Will post a summary of thr article i read about it on business desk but in summary: cars, housing surprisingly strong, casinos big time, apparel, and outdoor goods (particularly KMD)

[Beagle]

Glassons even seem to encourage "Peacocking" with phrases like "Show it Off" on their home page https://www.glassons.com/
I reckon their marketing department are a bunch of very talented people.

Dividend is to be paid next Friday (17th) (superbly timed for Christmas / Holiday costs) and the annual meeting is 21 December, (gosh that's a bit late in the year) but will nevertheless give us a better insight into how trading has been going year to date.

I think they can pay another 24 cents in April so lets just have a wee look at the gross yield (assuming 85% imputation rate) and remembering that this is a growth stock with Glassons Aust growing very strongly in recent years.

48 cents per annum at 85% imputation = 0.28 x 0.85 = average imputation rate 23.8% so gross up is 1-0.238 = 0.762
48 / .762 = 62.992 cps gross

62.992 / 710 = 8.87% Gross yield.

We are being paid very handsomely indeed while we enjoy outstanding future growth with Glassons Australia. My rating is BUY for a strong recovery in apparel sales this year and strong growth with Glassons Australia in future years.

[winner69]

Last announcement in September they said 'The first eight weeks of the new financial year have seen Group sales decline -18.90% on the prior year'

No doubt an update at ASM a few days before Christmas and they'll say 'The 20 weeks of the new financial year have seen Group sales grow X% on the prior year'


Any guesses as to what X will be?

[Beagle]

Difficult question to answer and would only result in a wild guess. Sorry to bring up the old chestnut of Covid support again but regardless of one's opinion on this sort of thing the fact is that in terms of FY22 profitability we need to be thinking of this on a Covid support inclusive basis and I think they can go close to last years $33m = ~ 56 cps.

If so, that puts them on a forward PE of just 12.7 which is dirt cheap when you consider the components that make up the group.

In my opinion the key to understanding the value embedded within the group is to break it into valuing two segments.
Choose you own PE for Glassons Au which had 27.5 cps earnings last year and eps CAGR of 27% per annum. 30 ? = $8.25
Then choose your PE for the rest of the group (eps 28 cps last year) that has been ostensibly flat for many years. 11 ? = $3.08


Any way you slice and dice it I think the prospects look very encouraging. Short term people who have been lounging around their home in their old duds will have worn out a lot of their old clothes and be keen to freshen up their wardrobe, the young shiny ones will be feeling a tremendous urge to go out "peacocking" and even us crusty old dogs have worn out a lot of their wardrobe and apart from the basics of needing new socks and T shirts and other basic items, wouldn't mind getting something more colorful to celebrate escape from covid prison. Longer term its clear Glassons Austraia has huge scope for ongoing strong growth and then there's America !
That graph looks super impressive for apparel
https://www.stats.govt.nz/information-releases/electronic-card-transactions-november-2021

[winner69]

In NZ this year they don't appear to 'taken' anywhere as much in corporate welfare as last year (MOH employer website search)

No idea about Australia

[Beagle]

I'm not really worried about it either way to be honest mate as I'm not really focused on the short term with this one. Clearly the real excitement in the years to come is international growth and the market is not pricing this into the stock at present, in my opinion. I'm fine with that as I wouldn't mind trying to nick some more at (just under $7 please Santa).

[BlackPeter]

I'm not really worried about it either way to be honest mate as I'm not really focused on the short term with this one. Clearly the real excitement in the years to come is international growth and the market is not pricing this into the stock at present, in my opinion. I'm fine with that as I wouldn't mind trying to nick some more at (just under $7 please Santa).

Just curious - what moat do you see for HLG on the international stage? What do they have which other international rag retailers don't?

[Beagle]

Just curious - what moat do you see for HLG on the international stage? What do they have which other international rag retailers don't?

Nobody has a moat in the apparel trade but they have their own niche. Looking at the way they've grown in Australia its clear as a brand Glassons is gaining real traction with Australian women. Australia has always been a tough market for N.Z. companies to crack but its clear that Australian women are really embracing the value and style that Glassons offer. The market there is more than 5 times the size here yet the retail footprint there is only about the same as here. The potential is clear to me and they now have a proven multi year track record of very strong growth over there. What I know about women's fashion could fit on the back of a postage stamp but its clear the team at Glassons are firing on all cylinders.

[BlackPeter]

Nobody has a moat in the apparel trade but they have their own niche. Looking at the way they've grown in Australia its clear as a brand Glassons is gaining real traction with Australian women. Australia has always been a tough market for N.Z. companies to crack but its clear that Australian women are really embracing the value and style that Glassons offer. The market there is more than 5 times the size here yet the retail footprint there is only about the same as here. The potential is clear to me and they now have a proven multi year track record of very strong growth over there. What I know about women's fashion could fit on the back of a postage stamp but its clear the team at Glassons are firing on all cylinders.

Fair enough ... while I am myself not particularly drawn to buy my stuff with Hallensteins, I remember their AGM (I think a couple of year ago) and the Leadership team was young (i.e. probably well tuned into their demographics) and came across as pretty switched on.

On the other hand ... clothing retail is a cyclical business - and while I realize that HLG is around for a long time, they had their ups and downs as well.

Anyway - good luck ... and certainly a case of making hay while the sun shines :):

[winner69]

If Glassons AU maintain its sales growth trajectory sales in F23 will be over $200m

That would generate about $50m gross margin than in F21 and lead to another $15m over F21 levels

Even if teh rest of the group goes nowhere HLG group profit will be over $50m in F23

Seems on the cards I reckon .... EPS more than 80 cents ....I leave it to Beagle and his yield calculator what divie we can expect

Balance says a $10 share ..... that's even cheap on where they will likely be in F23

[Rawz]

Why has NZ sales stalled?
Will this happen to Aus?

[Beagle]

FY16 $13.7m
FY17 $17.3m
FY18 $27.3m
FY19 $29.0m
FY20 $27.8m (Covid affected)
FY21 $33.3m (Covid affected)

Overlay that with considerations of sales growth with Glassons Aust and what I see is a trend with a CAGR of just over 19% per annum, not a cyclical company. I'm not pretending for one minute there won't be challenges along the journey but as Winner has alluded too above I'm really excited about what the next 5 years will bring.

Rawz - I would say our market is already well served. HLG are not looking to expand their retail footprint here whereas in Australia for about the same number of Glassons stores as here they are smashing the ball out of the park and there's heaps of room to grow with a total dressable market of more that 5 times N.Z.

[winner69]

Why has NZ sales stalled?
Will this happen to Aus?

From Stats NZ Retail Trade data - If the Clothing and Footwear sector is a proxy for market size then HLG NZ sales are struggling to keep up with market growth. In other words losing share. Glassons are winning share sightly / Hallensteins losing share.

HLG sales in NZ have grown at 4.2% pa while market growth has been 5.0%

NZ consistently generates $16m/$18m of profit .... thats pretty good and then add on the strongly increasing Glassons profit and the Group is
powering ahead

And you never know NZ might come right big time --- the $50m profit in F23 could be $60m
t

[Beagle]

All this growth with the same (just 59.6m) shares on issue year after year after year after...
eps and dividends per share could be "very interesting" in 5 years time :cool:

[winner69]

All this growth with the same (just 59.6m) shares on issue year after year after year after...
eps and dividends per share could be "very interesting" in 5 years time :cool:

EPS could easily be $1.00 per share in f24 …let alone waiting 5 years for that

[Muse]

It's cool to see so many 'big dogs' of sharetrader here as fans of HLG. It's got me interested in the company - one I've always admired but not been close to. May have to do some work on the business and particularly the sustainability of their growth in Australia as its the engine of the business.

None of these are meant to be nags or in particular directed towards HLG - more just items that have swirled around my and probably other investors heads as they consider the retail apparel sector

* cotton prices are sky high. Most retailers don't actually source the cotton or yarn themselves - their factors do - but inevitably that will flow through. As I understand it local wages in China, Vietnam, and particularly Bangladesh are rising quickly so manufactured cost is on the rise
* Supply chain: bluewater deliveries taking 4-5 months longer to land in Australasia than before covid (can't sell what you dont stock), with container costs up 6x - so landed costs have & will continue to rise
* minimum wages definitely on the rise in NZ. Not currently au fait with what is happening in AU
* NZ interest rates will rise faster than AU - wouldn't be surprised to see further appreciation of the kiwi against the aussie which will erode Australia's profits when translated back into NZD
* most product sourced in USD. at NZD 0.68 thats not bad. Better in the 70s but can not bad buying at spot
* Costs of ESG: not so much concerned about HLG's ESG practices (they seem to do a good job at first glance) but there is a cost to doing that. Not just the handful of production FTE's they have to hire but the cost of responsible cotton/better cotton initiatives, extra factory audits, etc
* retail highly operationally leveraged - once your footprint is established in a country its bloody hard to even maintain profits, let alone grow. Eeeking out those extra dollars, that margin, when you have all the stores you have, and your stores are mature, is extremely difficult. Margins can fall incredibly quickly off a small slip in turnover once stores reach that level. A good online operation key to offset the bleed. There is nothing worse than being a shareholder in a retailer with no where left to grow. Obviously HLG has a big market in Australia to grow into - but it can reach saturation there too - so while a long term hold probably not a forever hold
* pricing power - sounds a bit counter intuitive but some retailers/apparel actually have a bit of pricing power, enough to offset some inflation. Is that HLG? Will HLG's customers accept double digit price increases to offset increased cotton and offshore production costs and recover higher overheads, so HLG can maintain its margins?
* womenswear traditionally much, much more difficult then menswear but Glassons doing well in Australia
* never underestimate how important the key designers are. Keeping their product on trend, without going off on too many tangents building up unsold stock and subsequent write offs. Keeping them in sync with production teams critical, and losing them has doomed other once strong retailers (like max fashions). HLG seem to have this nailed, but its when they lose their mojo things go off track fast. keeping the design & production team efficient and tight also key - don't want loads of designers designing loads of products that won't sell. I also recall what happened to pumpkin patch - after reading the liquidators report they had something like 60 designers - just a crushing overhead.
* I see some further gains in NZ retail - it would be hard not to envisage a sugar rush as people are released and some good spending over the next 12 months.
* But I do wonder if we will see peak retail spend in NZ next 12 months. Interest rates and inflation et al. From there is how far will spending fall when considering the vast amounts of savings that have been built over the last 18 months. Rents are rising and first homeowners will come under strain with higher mortgage rates.
* Australia will probably be better for longer for a lot of reasons, and a huge market if HLG can continue to grow their niche. But I dont know the retail landscape there in HLG's demographic so will probably have a poke about.

Lots of macro headwinds will impact different parts of this business at different times - for me - I would need to get comfortable the growth opportunity in Australia can outpace them. The glassons are top notch and mary devine one of the most savvy retailers out there so I can see the appeal. Company has been a performer for a long time and its yield is world class so there is a lot to like.

[winner69]

Long list of things to ‘consider’ re HLG there moose.

HLG Have been going since 1873. Sine then they’ve been World Wars, flu pandemics, depressions, many global financial crises, earthquakes and other natural disasters etc etc.

Even managed margins when NZD has collapsed, when there’s been oil shocks, when in 2010 cotton prices were double what it is today ans even when coffee prices have gone through the roof.

Still thriving after all that’s been thrown at them over the years …….and paid a decent divie most years

No worries here …and exciting times ahead

[Beagle]

Excellent post Fiordland Moose. There are challanges with any business at present and there will always be challenges to navigate.

This from an earlier post of mine
I really like the way they are very cautiously expanding. With HLG management, (unlike some companies), there is never any doubt whatsoever that they are acting in the best interests of shareholders at all times. I put this down to the the retail legend Tim Glasson having his 20% stake and his own son James doing such an outstanding job running the Australian operation. James doesn't have any problem with finding a great mentor for advice any time he wants does he !


I believe James is degree qualified in some Royal College of fashion and apparel in London (forgive me I forget the exact details). My point is that although he's obviously Tim's son, (which to some will bring up the ugly thought of nepotism) but he's not without excellent high level training and a brilliant legendary mentor whenever the occasion presents for some advice. The proof is there, he's smashing the ball out of the park with Glasson Australia and I believe we can look forward to much, much more of the same in the years ahead. Ultimately Tim has to leave some of his shares to someone and I'll give you one guess who that might be ;)

I don't pretend to understand women's fashion and they way Women interact but I do believe that once a brand find's acceptance and momentum women talk amongst their friendship and social media groups and that talk leads to more momentum which leads to more talk and more...you get the idea.

I believe HLG have the highest percentage of online sales of any retailer in N.Z. To me that's "Gold" as we navigate our way through this pandemic.
You will have noticed earlier how I value the company but as Winner has alluded too, I also wouldn't rule out this possibility either that Glassons N.Z. and Hallensteins could easily start hitting their stride again contemporaneously with strong growth with Glassons Australia.

I've been mightily impressed with how Glassons Australia has grown during the pandemic notwithstanding all the headwinds you've mentioned. When you start thinking about how they will grow in the future and the possibility of further international expansion and its implications for the DCF valuation now...the forward PE looks very cheap compared to other N.Z. retailers (especially those who don't have international growth prospects...I'm looking at you WHS and Briscoes).

Way back in the 80's I did some work in the optional investment analysis paper I did at Auckland Uni comparing the performance of a group of companies wherein the directors or management had a sizeable stake (like Tim Glasson's 20% stake) to those that didn't.

The results were starkly different. Never underestimate the benefits to minority shareholders when management or the directors have a huge slice of their own money on the line. Forgive me if this comes across as unduly cynical but with HLG and companies like Briscoes with Rod Duke's stake you're never left in any doubt that they're running the company with a laser focus on what's best for shareholders. Far too often I see management running companies in a way where you'd be easily forgiven for thinking they either have their own best interests at heart or are there to make grandiose ESG directives as their key motivation. I see this so often I have serious trust issues with a lot of companies.

HLG is a company that I never lose a moments sleep wondering who they are looking after. On a forward PE materially lower than some other retailers in N.Z. and with better international growth prospects I think HLG are a very good long term hold. Arguably the best GARP (growth at a reasonable price) stock on the NZX.

Its plain to see I am quite excited about the future for HLG as we head into the next more open phase of the economy. That apparel growth statistic the other day was stunning and when you think about it, it makes perfect sense. Most of us have worn out a lot of our old clothes while we sloth around our houses for the last 2 years.

A lot of people are still super reluctant to travel and their wardrobes are looking tired and dated. A lot of the $10 Billion that's spent annually on international travel will find its way into retail coffers for the foreseeable future. Then there's the tens of billions that's backed up in people's accounts because they haven't been able to go out and the billions in Govt stimulus that's been injected into the economy.

Further, Glassons and Hallensteins primarily target the younger demographic, exactly the group that's more likely to get out and about in the shops now. Apparel up more than 50% in November, (when there was still huge restrictions in the Auckland region) then its now clear after opening up this sector is going to have a massive boom this summer.

HLG a classic dividend hound stock...strong growth while paying high dividends and all without any new share issuance. Suits this semi-retired old hound "purrfectly" ;)

[Rawz]

Hmmmm yes okay it is a buy then. Some very good posts from W69 and Beagle for the bull case. Gosh, aren’t we all so lucky to have share trader and members that freely offer up their thoughts and analysis on company’s.

Hallenstiens were quite unlucky with COVID. Their range of affordable suits for the office, weddings or school balls didn’t have a chance to sell whilst we were all locked up at home or restricted from attending large events. Maybe a big bounce coming for them (as W69 has alluded to) now that they have rotated out of the big range of affordable formal wear to adding more casual.

I also agree with this peacocking theory. And think a lot of people have spent retail dollars on homewares and furniture over the last 18 months and now consumers might be done with that. Maybe those retails dollars will go towards a new wardrobe.

HLG is a well run company with great management. Strong balance sheet and everybody must love the dividend yield. Should pop over half a billion market cap within next couple of years. That should attract other larger parties to the table as it would be considered of sufficient size

[Muse]

Hmmmm yes okay it is a buy then. Some very good posts from W69 and Beagle for the bull case. Gosh, aren’t we all so lucky to have share trader and members that freely offer up their thoughts and analysis on company’s.

Hallenstiens were quite unlucky with COVID. Their range of affordable suits for the office, weddings or school balls didn’t have a chance to sell whilst we were all locked up at home or restricted from attending large events. Maybe a big bounce coming for them (as W69 has alluded to) now that they have rotated out of the big range of affordable formal wear to adding more casual.

I also agree with this peacocking theory. And think a lot of people have spent retail dollars on homewares and furniture over the last 18 months and now consumers might be done with that. Maybe those retails dollars will go towards a new wardrobe.

HLG is a well run company with great management. Strong balance sheet and everybody must love the dividend yield. Should pop over half a billion market cap within next couple of years. That should attract other larger parties to the table as it would be considered of sufficient size

I'll go in if you go in Rawz - let me know what you think is the right entry price and how much portfolio weighting you'll do...

[Beagle]

From Stats NZ Retail Trade data - If the Clothing and Footwear sector is a proxy for market size then HLG NZ sales are struggling to keep up with market growth. In other words losing share. Glassons are winning share sightly / Hallensteins losing share.

HLG sales in NZ have grown at 4.2% pa while market growth has been 5.0%

NZ consistently generates $16m/$18m of profit .... thats pretty good and then add on the strongly increasing Glassons profit and the Group is
powering ahead

And you never know NZ might come right big time --- the $50m profit in F23 could be $60m

I've been reflecting on that a bit this weekend. Certainly the top line growth of 16.9% for Glassons N.Z. and 9.9% for Hallensteins last year was also very impressive in the middle of a pandemic (all the more so for Hallensteins when you consider the formal wear challenges well articulated by Rawz), so if that continues and they can get their margins right here and strong growth continues as expected in Australia we might be really cooking with gas !

One thing is for certain, if we wait for all the apparent Covid challenges to clearly abate, it ain't going to be $7 then !

One thing I am pretty keen to avoid is trying to predict what the profit for any given year will be. I'm reflecting on the 5 year CAGR of 19% and the forward PE of less than 13 and thinking about this long term as a retirement income stock and how dividends are going to grow for me. What we have here is a PEG of less than 0.7 Hmmm

HLG makes a mockery of the old saying you can't have you cake and eat it too. All that growth with zero share issuance, not even a dividend reinvestment plan and massive dividends twice a year along with all the history and credibility that comes with being N.Z.'s oldest listed company. WOW that's a pretty compelling recipe !

Maybe HLG is the best gift you give yourself this Christmas ?

[Muse]

HLG a classic dividend hound stock...strong growth while paying high dividends and all without any new share issuance. Suits this semi-retired old hound "purrfectly" ;)

Yes - no share issues in lieu of cold hard cash being issued and reported below underlying EBITDA or underlying npat, diluting the hell out of shareholders. arghh!

[Rawz]

I’m thinking a straight swap out of WHS and into HLG. Would be 10% allocation.

I try not to get too caught up with entry prices. I believe if a company is undervalued or has great growth ahead then why worry about a few cents here or there.

In saying that $7 would be nice. I like round numbers lol

[winner69]

Yes - no share issues in lieu of cold hard cash being issued and reported below underlying EBITDA or underlying npat, diluting the hell out of shareholders. arghh!

....and I can't remember when they had to ask the bank for cash .... not even for an overdraft ..... maybe never

A true cash business --- reinvest of the cash generated in new stores etc and pay decent dividends .... no worries

[winner69]

I’m thinking a straight swap out of WHS and into HLG. Would be 10% allocation.
l

Cash generation from what assets you have is key --- and either makes you average or a great company

How about this show how how great HLG is in generating cash ... compared to your WHS

For every $ of inventory HLG generates $7.67 of Gross Margin - WHS manages to make $2.92 Gross Margin for very $ of inventory

Huge difference eh - whose far superior in stock management .... awesome return on the investment in stock eh

Which business would you rather own rawz?


PS - Rod Duke seen as a doyen of retailing .... Briscoes Group manages to generate $3.45 of Gross Margin for every $ of inventory .... even he is a boy in returns on investment in stock.

[winner69]

And more rawz - MHJ manage to generate $2.00 for every $ of inventory

So have HLG at $7.67 BRG at $3.45 WHS at $2.92 KMD $2.44 and MHJ at $2.00 (Gross Margin generated pr $ of inventory)

HLG in a class of its own ..... world class ....admired by it's global peers

[Rawz]

Those are impressive stats W69.

It definitely feels right to swap back to HLG. HLG after all has been flat all year. Those other poor inventory to GP companies you mentioned have had humongous gains this year 😆 Time for them to be flat?

[Rawz]

Wait a minute… Winner are you actually telling us those other retailers have HUGE upside potential if they boost those inventory gp numbers???

Is HLG capped out?

[percy]

And more rawz - MHJ manage to generate $2.00 for every $ of inventory

So have HLG at $7.67 BRG at $3.45 WHS at $2.92 KMD $2.44 and MHJ at $2.00 (Gross Margin generated pr $ of inventory)

HLG in a class of its own ..... world class ....admired by it's global peers

Thanks W69.Really the whole point.
HLG Incredible.
The others except MHJ do well,but as you point out HLG in a world of their own.

A ps.If you could would you compare LOV .Thanks in advance.

[Beagle]

HLG up ~ 14% YTD inclusive of 47 cents of dividends (about 18% outperformance compared to the NZX50). Definitely trailing other retailers performance this year though like WHS, BGR & MHJ. My sense is all the low hanging fruit with the other retailers has already been picked.
These gains and growth are with no debt whatsoever and a nice clean balance sheet with no B.S. goodwill like a lot of other companies...(more reasons I like them).

[winner69]

Wait a minute… Winner are you actually telling us those other retailers have HUGE upside potential if they boost those inventory gp numbers???

Is HLG capped out?

Good in theory Rawz but in reality won’t happen

None of the others have really improved that metric ……their business ‘models’ don’t enable it …HLG high margin high stock turns ,,,,,ratios many of their global peers would love to have.

[winner69]

Thanks W69.Really the whole point.
HLG Incredible.
The others except MHJ do well,but as you point out HLG in a world of their own.

A ps.If you could would you compare LOV .Thanks in advance.

LOV an impressive $7.85 Gross Profit per $ of inventory ……better than HLG

LOV at $7.85 and MHJ $2.00 …..easy to see why LOV rated so much higher by the market than MHJ

[Beagle]

Lots of love for LOV that's for sure on a PE of 89 ! I think I will reserve my love for growth stocks on vastly more compelling metrics :)

[winner69]

Lots of love for LOV that's for sure on a PE of 89 ! I think I will reserve my love for growth stocks on vastly more compelling metrics :)

Just imagine HLG on a PE of 89 …..even 40 would be good. :t_up:

[Beagle]

Just imagine HLG on a PE of 89 …..even 40 would be good. :t_up:

Please stop it... A beagle drooling is not a pretty sight lol

[Rawz]

LOV an impressive $7.85 Gross Profit per $ of inventory ……better than HLG

LOV at $7.85 and MHJ $2.00 …..easy to see why LOV rated so much higher by the market than MHJ

Oh god, hope Percy doesn’t see this. He’s going to throw so much shade on MHJ. They have been in his sights all year lol

[percy]

LOV an impressive $7.85 Gross Profit per $ of inventory ……better than HLG

LOV at $7.85 and MHJ $2.00 …..easy to see why LOV rated so much higher by the market than MHJ

Thanks W69.
Two incredible retailers.

To Rawz.Yes well???...lol.

[Rawz]

Thanks W69.
Two incredible retailers.

To Rawz.Yes well???...lol.

Lov numbers are just incredible. Personally I can’t mentally commit to investing in these super high growth companies with super high multiples. It would keep me awake at night lol.

I’m actually a bit of a wuss and have recently decided to seek out low rated companies that have modest growth ahead. That way the fall isn’t as punishing when things go wrong. HLG fits this nicely. One day HLG will buy wrong for a season and turn in a bad quarter or half. But the SP impact should be rather modest and if they can keep paying a dividend then all good just sit back and wait for the rebound

[Beagle]

Lov numbers are just incredible. Personally I can’t mentally commit to investing in these super high growth companies with super high multiples. It would keep me awake at night lol.

I’m actually a bit of a wuss and have recently decided to seek out low rated companies that have modest growth ahead. That way the fall isn’t as punishing when things go wrong. HLG fits this nicely. One day HLG will buy wrong for a season and turn in a bad quarter or half. But the SP impact should be rather modest and if they can keep paying a dividend then all good just sit back and wait for the rebound

GARP (growth at a reasonable price) is my #1 favorite investment strategy, Others I hold a decent stake in that fit the bill nicely are TRA, HGH, OCA and ARV. GARP stocks generally hold up well in a higher interest rate environment because the DCF valuation is less affected by a lower terminal growth rate. High growth - high multiple stocks where you're banking on huge growth in the long run can be hurt a lot in terms of the impact on their valuation when discounting back their long run future growth at higher discount rates. This is something to really watch for in 2022, (how the high multiple stocks hold up)

Don't think of it as being a wuss...think of it as being a prudent conservative investor.

Very, very rare for me to own a stock on a forward PE over 30 and I won't own stocks that don't actually make money no matter what promises they make or how good their prospects appear. Others have a different approach with such things and some do very well but I stick to what I know works well for me. LOV would never come under consideration from me at that multiple.

Talk of fabulous long term growth is one thing...paying super high multiples for it is another. I guess, (unsurprisingly for an accountant) I'm a real "show me the money" sort of guy which is why HLG is one of my favorite stocks. Twice a year they really do show me the money, lots of it ;)

[percy]

Lov numbers are just incredible. Personally I can’t mentally commit to investing in these super high growth companies with super high multiples. It would keep me awake at night lol.

I’m actually a bit of a wuss and have recently decided to seek out low rated companies that have modest growth ahead. That way the fall isn’t as punishing when things go wrong. HLG fits this nicely. One day HLG will buy wrong for a season and turn in a bad quarter or half. But the SP impact should be rather modest and if they can keep paying a dividend then all good just sit back and wait for the rebound
This is my original LOV post,posted 1-5-2017.
You will note the PE was 17.4. From memory their growth rate was between 25% and 35%.At 35% their pe was half their growth rate.So was a very simple decision to make to invest in them.The trust I help out on bought 10,000,sold 3,000 to give it a free ride.Still holds 7,000..Any time I see a growth rate twice the current PE I get very excited.Got excited the other day and doubled my SEQ [asx] holding,Again pe of 15 with an expected growth rate of over 30%.

With thanks to Noodles and KW.
105,000,000 shares on issue ,giving a market cap of $403,200,000 at $3.84.
eps.22.07 cents....PE 17.4 ...Div Yield {australian] 3.13%
Lovisa produce and sell Fashion jewellery and accessories.
They have stores in Australia,NZ,UK,Singapore,Malaysia and South Africa,and have franchise stores in the Middle East.
The company utilizes daily inventory monitoring from its centrally located warehouses in Melbourne and Hong Kong.
They trade from "smallish" stores in very high foot traffic Malls.The pay back from opening a new store is usually under 18 months.
Logistics are made easy by jewellery being small.Airfreighting product around the world is cheap,and fast compared to TVs,clothing etc. This aids stock turns.The products appeal to women of all ages.
I keep an eye on Westfield Riccarton store.Allways busy.
Today they announced an earnings upgrade.

[Rawz]

Thanks for posting Percy. High growth and under 20 PE, wow what a find. Guess it’s much much easier to hold now that it’s all profits. Buying in today however, hmmm that’s hard.

Might have to have a look at this SEQ, wouldn’t mind a multi bagger like LOV.

Maybe HLG will do it in time 😎

[Waltzing]

retail may be bouncing back for November but the warning signs in the news today of pain coming for Auckland. Of course it may mean a big boast for central north island BOP and thames not in the HOT ZONES.

Dont see these retail stocks taking off again until some new number hit the wire later in the summer.

Luckily this is an AUS dollar story. Lets see how the Kanga's party over summer with OMC giving everyone a sniffle.

The Auckland exit will be big this WED to SUN...

No doubt many outside auckland have their Quest and Family room already booked out with the pending arrivals..

getting a dinner table may be impossible later this week in Hamilton and the Mount.

[Beagle]

retail may be bouncing back for November but the warning signs in the news today of pain coming for Auckland. Of course it may mean a big boast for central north island BOP and thames not in the HOT ZONES.

Dont see these retail stocks taking off again until some new number hit the wire later in the summer.

Luckily this is an AUS dollar story. Lets see how the Kanga's party over summer with OMC giving everyone a sniffle.

The Auckland exit will be big this WED to SUN...

No doubt many outside auckland have their Quest and Family room already booked out with the pending arrivals..

getting a dinner table may be impossible later this week in Hamilton and the Mount.

HLG no good then. You should put all your shares on market to sell at $7.05 and see what happens :D Please PM me 2 minutes before you're planning on doing it ;)

[Waltzing]

Not a Chance ... its an AUSSI story...

i dont recall the Kanga's giving up in the face of any thing... Kokoda trial WWII.... Long Tan... Not to mention WWI...

who would want to sell when the War isnt over?

Should be some great buying in europe over the winter there ...

Our new software platform powered by our new scripting IOT solution is just powering up ... to busy to sell anything at the moment... BUY all the EBOS one can get across all portfolios...

MORE we want MORE!!!

it summer and the aucklanders are arriving Wed Day for shopping before heading to the Beach's of the BOP friday....

they will give up on northland , NO STICKERS!

what a JOKE!!!

whatch out BOP here they come!

[Balance]

Here’s to a nice Christmas update from HLG on 21st December.

Be there or be square & miss out!

https://quoteapi.com/resources/da9866271f9d0071/announcements/hlg.nzx/384695/HLG_INSTRUCTIONS_FOR_ATTENDANCE_AT_ANNUAL_GENERAL_ MEETING.pdf?bearer=eyJhbGciOiJIUzI1NiIsInR5cCI6Ikp XVCJ9.eyJzY29wZSI6WyJndWVzdHMiLCJ1c2VycyJdLCJuYmYi OjE2Mzk0NTY0MDMsImV4cCI6MTYzOTQ1NzMwMywiaXNzIjoic3 RvY2tuZXNzIiwibm9uY2UiOiIwNmExODFlYTMxNmY1MmFkIiwi aWF0IjoxNjM5NDU2NDAzLCJzdWIiOiIxNDE0MzExMiJ9.RYFpO iB9EZA1Eijv-rNeltCQaxiiMmwBEjCvJaogeGI

[Beagle]

Or attend virtually here from the comfort of your own home https://apps.computershare.com/MeetingsShareholderWeb/FindMeeting?Country=NZ

[LaserEyeKiwi]

Hope everyone enjoys their Xmas present from HLG today in the form of the nice juicy dividend hitting their accounts.

Just out of interest when to most NZ brokers show dividend funds in users accounts? Mine seems to take a day or two to show up which is annoying when all i want to do is plow it back into the same stock if the share price looks cheap.

[Grimy]

If I deposit money into my Jarden account it usually takes a few hours to show.

[fastbike]

If I deposit money into my Jarden account it usually takes a few hours to show.

It was in my bank account before lunch time - that's a real nice touch. Thanks.

[Grimy]

It was in my bank account before lunch time - that's a real nice touch. Thanks.

So was mine. I thought LEK was asking how long does a transfer from a personal bank account take to show in a broker's trading account so you can use it for a trade.

[winner69]

Percy posted on STU thread on supply chains stuffed until 2024 but just as relevant here ….fashion is mentioned

Jeez …not enough wood and nails to make pallets.

And this is a bit ominious - Woolworths would absorb its higher costs, rather than passing them on to customers, if conditions continue to worsen companies will inevitably look to halt the erosion of their all-important profits. ..and when he mentioned F22 profits are being impacted WOW share price down 10%

https://www.smh.com.au/business/companies/this-mess-will-not-be-over-before-mid-2024-supply-chain-pain-hits-retailers-20211215-p59hpc.html

[Waltzing]

Reality strikes at last. The global supply chain problems talked about in early 2021. Slow train wreck or last least a slow down in the global train.

Remember the GFC and the subsequent sell off in the years after the reflation periods.

One of the studies we did last year April 2020 was to look at the SP behaviour of stocks over a 5 year period after the GFC.

It looks like this event will have a 4 to 5 year period of repercussions for sectors and the results also.

[Beagle]

Decades of experience dealing with managing supply chain issues means HLG are FAR better positioned than most. Some of the summer fashions Glassons stock don't weigh very much ;) and can inexpensively be airfreighted. I'm looking forward to Tuesday's annual meeting.

[Waltzing]

the big decisions will be how many stores get shut down in the next 12 months if boasters dont stop the spread of OMI it will be lock down whack a mole..

Europe starting limited restrictions and a lot of sport events now cancelled.

fashion designer in Sydney has come down with it and says even with double jab you get hit and its not nice. under 40 year old.

She says Glassons has been doing a good job competing is a very tough Aussi market.

And has recently move from Hong Kong back to Aus.

Designs for Wolf and Badger.

[LaserEyeKiwi]

the big decisions will be how many stores get shut down in the next 12 months if boasters dont stop the spread of OMI it will be lock down whack a mole..

Europe starting limited restrictions and a lot of sport events now cancelled.

fashion designer in Sydney has come down with it and says even with double jab you get hit and its not nice. under 40 year old.

She says Glassons has been doing a good job competing is a very tough Aussi market.

And has recently move from Hong Kong back to Aus.

Designs for Wolf and Badger.

I doubt we will see lockdowns again in NZ (that is the whole point of switching to the “traffic light” system), unless we get a truly horrible mutation pop up that is extremely deadly and current vaccines prove ineffective in preventing serious illness (omicron is an order of magnitude more transmissible, but doesn’t appear to be any more deadly thankfully).

Even in a bad case scenario, Retail has proven not to be a significant risk, rather it is the activities that involve people spending long periods of time in close proximity without masks (Hospitality/gyms/home gatherings etc) which are the riskiest and are most likely to be closed.

[Beagle]

Even if we do see lockdowns again. HLG are smart enough to take whatever Covid support is on offer and not waste time and resources grandstanding ESG issues / kowtowing to woke socialists and Govt and then there's their best in class online systems (24% of all sales were online last year), the highest of any retailer in N.Z. I would argue they're better positioned to withstand any possible future adversity than any other retailer with their online systems, strong balance sheet and exceptionally talented management.

[winner69]

Decades of experience dealing with managing supply chain issues means HLG are FAR better positioned than most. Some of the summer fashions Glassons stock don't weigh very much ;) and can inexpensively be airfreighted. I'm looking forward to Tuesday's annual meeting.

I’ve loaded up with zillions in case the news isn’t so good and we see a panic sell off and a collapsing share price.

Sub 6 bucks would be good (hope you haven’t reinvested divie by then lasereye)

Beagle will be all ready as well. ….hope I beat him in the race to the trough ……my avatar suggests I wlll :D

[winner69]

How does one find out what smiley / emojis mean?

Like what have I done to Beagle with this one :D

[Beagle]

I’ve loaded up with zillions in case the news isn’t so good and we see a panic sell off and a collapsing share price.

Sub 6 bucks would be good (hope you haven’t reinvested divie by then lasereye)

Beagle will be all ready as well. ….hope I beat him in the race to the trough ……my avatar suggests I wlll :D

My avatar suggests I spend far too much time thinking and not enough time running :lol:

[winner69]

the big decisions will be how many stores get shut down in the next 12 months if boasters dont stop the spread of OMI it will be lock down whack a mole..

Europe starting limited restrictions and a lot of sport events now cancelled.

fashion designer in Sydney has come down with it and says even with double jab you get hit and its not nice. under 40 year old.

She says Glassons has been doing a good job competing is a very tough Aussi market.

And has recently move from Hong Kong back to Aus.

Designs for Wolf and Badger.

Who you talking about here waltzing my friend?

[LaserEyeKiwi]

I’ve loaded up with zillions in case the news isn’t so good and we see a panic sell off and a collapsing share price.

Sub 6 bucks would be good (hope you haven’t reinvested divie by then lasereye)

Beagle will be all ready as well. ….hope I beat him in the race to the trough ……my avatar suggests I wlll :D

For clarification I was talking about how long it takes to receive dividends into ones broker account. Apparently I am unlucky to have chosen two NZ brokers who take multiple days to allocate the dividends to ones account. I think it’s perhaps due to both of them operating on a custodial model.

[Waltzing]

"Who you talking about here waltzing my friend?"

an NZ designer how grew up in Hamilton and then moved to Hong Kong as a Grad of AUT...18 years ago..

There were amercians here even then teaching design.

She says HLG in Aus has done a good job of knowing the Aussi market.

and as everyone monitoring markets knows Europe is slowing start to react to OMI and its hard not to see a close down coming for europe soon.

[Muse]

Alright Chaps & Chapetes - I am getting excited (relative term) for the HLG AGM. Not a shareholder but keen to get a mark on management, their growth plans, and how they are handling all that is being thrown at them. It's a great company and one I wish I had invested into earlier.

There is no doubt in my mind around HLG being an excellent company - its returns on capital, its longevity, track record of growth, etc. I largely focused my NZ retail exposure into Briscoes (which has been an outstanding ride), followed by KMD, and Michael Hill - all great investments relative to the time of investment. So here I am - knowing I've missed the a great opportunity at HLG, and I am considering how attractive HLG is as an investment at current prices (and not if its a good company, or has been a good investment for others at different prices), and what might play out in the coming year.

So here is one 'moot' for you - a wargame I've mentally played - not necessarily something I am saying will happen, but something I think could plausibly happen given the macro environment we are in. Interested in perspectives and I will @ the AGM as I am in no hurry to try to technical analysis my way into some great short term buy at the expense of a long term fundamentally assessed position. I'm in zero hurry.

* Despite most recent lockdowns across Australasia underlying retail/apparel spend has been strong - robust prior to lockdowns, suffering during lockdowns, and strong immediately after. The sharemarket has done well to look through these lockdown "blips" and focused more on underlying strength. Online sales strong, earnings strong, sharemarket strong, dividends strong;

* Lockdowns across Australasia more or less assumed to be completed, just in time for xmas. Lots of pent of saving being spent on retail, "peacocking" as winner put it, updating wardrobes, etc. Sugar rush as people released, lots of gains in growing household wealth, lots of savings, low interest rates, robust *global* equity markets, etc - no reason retail shouldn't perform well next 6-12 months;

* HLG announce good momentum into/beyond xmas, good outlook for remainder of FY, dividends, SP performs well - staying in 7-8 dollar band (& appreciating higher on the good news), while paying high dividends. Happy days, happy shareholders;

* inflation builds, everywhere. We've all read about it, but the flow through starts to become a bit personal. ALL input prices go up or finally flow though. Cotton & yarn, offshore labour costs, transport, rents & insurance, local wage cost inflation etc. HLG tries to find the balance between passing on what it can - absorbing what it can't. Does it more likely ( & preferably) seek to pass on all first (even if it hurts demand as at least that helps with intermittent stock shortages stemming from supply chain issues), or absorb first and then pass on. This isn't a trivial, academic issue for an operationally leveraged business. There are high COGS (both commodity and offshore labour), and indirect costs (rent and labour) - can significantly impact EBITDA/EBIT & NPAT in a steady but slow growth environment, and severely reduce them should revenue fall;

* Landlords try to recover some of the added expense of being a landlord (interest rates but all interest deductibility and bright lines & all the others) in the form of higher rents. Rents are rising & continue to rise. Considering HLG's demographic, most are young and probably renters. Even though minimum wages, and low wages are rising quickly, rents and inflation (covered below) rise more quickly, leading to reduced demand from HLG. This has probably already started but may take time to flow through to reported financial results (3 months after the fact);

* Inflation rises cause interest rates to rise. A huge quantum of recently fixed mortgages will come up for repricing in the next 12 months. And it will be a hell of a lot higher than what it was fixed at. After renters, first home buyers are reasonably young and probably the next most logical demographic of HLG, across Australasia. The repricing of mortgages will eventually (next 2 year) result in an extra ~$15k interest servicing requirement, causing household buying patterns to change and confidence to slow. Further immediate lack of demand from these buyers;

* Housing wealth accumulation has been a huge driver to consumption. I would argue it is the annual rate of change in housing wealth that drives increased consumption, not the absolute value of housing. IE - if your house went up $500k in the last 12 months, you could rationalise a lot of extra spending. IE, well I made x dollars this month, from our house. Right or wrong. If your house is static at XYZ value, even if much higher than what you paid for it, that probably influences you less, as its not an annual paper gain or profit;

* It would be reasonable to say the housing market will be in the most precarious position it has been in for the last +30 years, in about 12 months from right now. Population growth has more or less been static, constructing has been booming, the housing undersupply has been closed, numerous legislative and macroprudential regulations have been put in place to make residential investment harder (interest deductibility, coming DTI ratios, bright line tests, increased banking capital requirements, et al), house prices have growth 30% the last 18 months/overshot on the back of all time low interest rates, which are and will continue to rise, and a repricing imminent over the next 12 months. If there was ever a time for house prices to start to fall, its the next 12-24 months.

* household savings are high, and continue to be a buffer for the next (say) 12 months, providing for elevated consumption. But as those dwindle, as costs & inflation rise, households change their behaviour to retain those savings.

* travel opens up, modestly over the next 6-12 months. Not in a big bang way, people are still tepid, but it does redirect spending away from retail.

* suddenly rents and interest rates are rising, sucking disposable income away from HLG's demographic. Wealth effect spending stopped in its tracks and the inverse occurring. Savings fall and households stop spending to maintain levels. Travel opens up modestly again. HLG hikes its prices as much as it can to maintain margins, even though that ultimately reduces demand. Net net demand and revenue starts falling, with the fall accelerating quarter on quarter, year on year. But COGS are still rising. Supply chain issues take years to straighten out. Even worse, the potential for inflation expectations to become anchored and entrenched, and decouple from underling supply chain issues and become a self fulfilling prophesy. A real risk, but not included in this wargame in earnest. Revenues fall, costs go up, and those expanding margins not only revert, but compress below pre covid times.

* Australia follows in NZ's path, but 6-12 months lagged. NZ interest rates rise faster than Australia's, causing the kiwi to rise, further diminishing the NZD profits of the Australian operation.

* investors see falling growth rates. There is nothing investors hate more than negative growth rates cycling against the previous corresponding period. Then they see earnings fall faster than revenues. DPS is cut. Share prices take a huge hit.

* in ~18-24 months share prices have fallen several dollars while revenue and earning run rates all look terrible on the previous 12 month corresponding period. BUT - supply chain issues normalize, higher interest rates anchor inflation expectations, and quarter on quarter (if not year on year) financial performance stablises. But it is not felt in the share price.

* Fiordland Moose then decides the time is right to buy a big whack of shares, knowing what side of the cycle he is on. Doesn't care its a cyclical company, and there will be loads of these in the future. It's a great company, and buying somewhere below the 50% mark of the cycle (but god knows if at the bottom or 49th percentile) and lives happily ever after. It's marketshare grows as weaker less capitally efficient companies go bust. It takes off again, posting fantastic comp growth. SP rallies.

This is just one scenario in my mind. But I see it as a likely one. I can't yet convince myself that now is a good time to buy, as that decision would have to be entirely based on HLG's ability to grow its earnings in australia fast enough to offset all the macroeconomic headwinds. It's possible, but will management retain the confidence to execute on their gameplan in the face of these pressures should they eventuate - undertaking long term lease commitments, stretching bandwidth, increased stock purchases, etc. I'm not sure. I am searching to find some sort of secular tailwind that will propel HLG to grow faster than than the macro environment - I'm aware of a few, but none (so far) I can ascribe to HLG.

I see it all as risk reward. You'll see how I never mentioned more covid outbreaks, omicrom, more lockdowns. Maybe the macros will offset each other with strong GDP growth, and management can eek out growth in Australia and we see stable to high $7 SP the next few years. But the downside is $4-5 bucks and much lower dividends, and thats ignoring some sort of new covid super strain that might be upon us. That ratio for me, is not in balance, and an equation I'll continue to assess. Even if I wind up being either too pessimistic or optimistic relative to where we actually wind up, I have pretty high conviction on the general trajectory: okay to good next 12 months, bad and then worse next 12-24 months, and okay to better after that. That's exactly how I would assess it in a financial model with some scenario analysis, if I had the energy to do so.

Personally, I think many investors in retail and retirement villages are significantly underestimating the challenges ahead, and even if they abate the risk return profile is totally skewed away from their favour.

I'm relatively unemotional about investing but I will be the first to put my hand up to say I didn't participate in what would have been a sensational investment in HLG 18 months ago, so I could be subconsciously biased about not wanting it to be a good investment now, so I don't have retrospective FOMO.

[Snow Leopard]

alright chaps & chapetes....
....fomo.

tl;dr :D :D :D

[Waltzing]

right... but really it took very little time and effort to start investing this stock back in the early 2000's... its been a great trade ever since and now has a stable share price even under duress.

Its a BUY at under 6 dollars and a HOLD right now...

If it keeps it dividend going and GDP keeps above 2.....

Huge public debt brought forward for GDP in the market that recession is unlikely.

pretty simple really.

[LaserEyeKiwi]

Got my dividend this morning, now reinvested. The share price appreciation may now recommence as scheduled.

[Beagle]

FM - Mate you have a classic case of "paralysis by analysis" The scenario you outlined is applicable as a possible future for all retailers. You will have seen my recent analysis wherein I articulated the value of Glasson's Aust and its proven high growth.

The fact of the matter is if you want to conjure up dire predictions you should sell all retailers.

HLG is very cheap relative to its peers and has a proven track record of high growth in Australia unlike any of its peers. Its really that simple. If you're going to hold any retailer I think this is the one to hold. Most people are well and truly done and dusted with expenditure related to nesting and are looking to let their hair down in a big way with socialising / peacocking. Apparel is going to have a sustained tailwind for at least 12 months in my view. HLG has about 25% of all sales online which is best in class by a long way.
No debt, high stock turn, management with a huge stake, strong margins...and most of all heaps of growth to come in Australia. Did you know their store footprint with Glassons Aust is 33 and with Glassons N.Z. its 36 ? That's right, less stores in Australia at present than N.Z. and yet the total addressable market there is well over 5 times the size of N.Z. Here's my hint to you mate, mull over the opportunity for ongoing strong growth they have over there.

[LaserEyeKiwi]

FM - Mate you have a classic case of "paralysis by analysis" The scenario you outlined is applicable as a possible future for all retailers. You will have seen my recent analysis wherein I articulated the value of Glasson's Aust and its proven high growth.

The fact of the matter is if you want to conjure up dire predictions you should sell all retailers.

HLG is very cheap relative to its peers and has a proven track record of high growth in Australia unlike any of its peers. Its really that simple. If you're going to hold any retailer I think this is the one to hold. Most people are well and truly done and dusted with expenditure related to nesting and are looking to let their hair down in a big way with socialising / peacocking. Apparel is going to have a sustained tailwind for at least 12 months in my view. HLG has about 25% of all sales online which is best in class by a long way.
No debt, high stock turn, management with a huge stake, strong margins...and most of all heaps of growth to come in Australia. Did you know their store footprint with Glassons Aust is 33 and with Glassons N.Z. its 36 ? That's right, less stores in Australia at present than N.Z. and yet the total addressable market there is well over 5 times the size of N.Z. Here's my hint to you mate, mull over the opportunity for ongoing strong growth they have over there.

Not even mentioning the tantalizing prospect of the Glassons US online-only effort they are dipping their toe into.

[Waltzing]

"Got my dividend this morning, now reinvested."

Intrepid investor...:t_up:

buffet was right when he said something along the lines MR B has outlined.. You can always find a reason to sell and oh dear the Lost Profits when you panic become HUGE later on... Yes last august look like a sell everything that came back into profit but the average SHAZ is still buying AIR and that is a lesson for everyone...

They arnt rational and share prices often rebuild after a terrible result. Its a hard one to swallow but you will regret not buying the good balance sheet companies who trade in stable markets.

[LaserEyeKiwi]

"Got my dividend this morning, now reinvested."

Intrepid investor...:t_up:

buffet was right when he said something along the lines MR B has outlined.. You can always find a reason to sell and oh dear the Lost Profits when you panic become HUGE later on... Yes last august look like a sell everything that came back into profit but the average SHAZ is still buying AIR and that is a lesson for everyone...

They arnt rational and share prices often rebuild after a terrible result. Its a hard one to swallow but you will regret not buying the good balance sheet companies who trade in stable markets.

I love reinvesting dividends back into the same company that paid them - compounding returns ain’t rocket science but its slow and boring so many don’t do it I guess.

[Beagle]

Not even mentioning the tantalizing prospect of the Glassons US online-only effort they are dipping their toe into.

Quite right...I was just trying to keep it simple. The group's social media and online presence is second to none which is what's driving the 25%+ online sales. From the annual report...this tells an interesting story. Hallenstein Brothers Instagram followers 50,200 but by comparison Glassons has 668,000 Instagram and 118,000 TIKTOK followers. Hmmm

Sales growth even with all the lockdowns and phycological stress we have had to contend with regarding Covid in the last year
Hallenstein Brothers up 9.9%
Glassons N.Z. up 16.9%
Glassons Au up 38.2%

Very impressive company. Disc: I have increased the size of my shareholding by 50% already in the last month so I will probably just blow my dividend on whatever piques my interest these holidays.

[winner69]

Beagle -- Glassons now have Instagram 687,000 followers ....not into Tik Tok so don't know that number

[winner69]

I suppose 866,000 Instagram followers / $250m total sales a year / of which say $90m online

Mot into these metrics but I betcha the marketing dept would say that's an amazing conversion rate on Return on market spend

[winner69]

Glassons had 269,000 Igram followers in 2018 - didn't say how many in 2019 - but had increased to 534,000 in 2020 and 668,000 in 2021 and 687,000 today

That's pretty amazing - 418,000 new followers in 3 years

All that social media exposure --- no wonder sales are booming

Wait until they try advertising in the metaverse

[Muse]

I suppose 866,000 Instagram followers / $250m total sales a year / of which say $90m online

Mot into these metrics but I betcha the marketing dept would say that's an amazing conversion rate on Return on market spend

Those are outstanding metrics for sure - no debate . Gives you a feel for how their customers perceive them & how they are able to grow in australia (ie anyone can go roll out stores in australia - but you need customers who love them to make it work)


FM - Mate you have a classic case of "paralysis by analysis" ... The fact of the matter is if you want to conjure up dire predictions you should sell all retailers.

No paralysis here. I'm 100% sold on the quality of the business. And I am determined to become a shareholder, I am just contemplating when and at what price. It's not my intention to be a conjurer of dire predictions - the moving pieces are on the horizon & being observed & discussed by economists & market participants in a range of industries - so *if* they occur the potential operational & financial flow through to HLG interests me. We are all mindful of these things and that informs our gut instinct - jotting down in a list probably makes it more pronounced. Anyway - even if these events do transpire - not sure my scenario qualifies as a dire prediction - down a buck or two before rebounding & growing thereafter - not a dire outcome for an apparel retailer being impacted by cyclicality

[see weed]

FM - Mate you have a classic case of "paralysis by analysis" The scenario you outlined is applicable as a possible future for all retailers. You will have seen my recent analysis wherein I articulated the value of Glasson's Aust and its proven high growth.

The fact of the matter is if you want to conjure up dire predictions you should sell all retailers.

HLG is very cheap relative to its peers and has a proven track record of high growth in Australia unlike any of its peers. Its really that simple. If you're going to hold any retailer I think this is the one to hold. Most people are well and truly done and dusted with expenditure related to nesting and are looking to let their hair down in a big way with socialising / peacocking. Apparel is going to have a sustained tailwind for at least 12 months in my view. HLG has about 25% of all sales online which is best in class by a long way.
No debt, high stock turn, management with a huge stake, strong margins...and most of all heaps of growth to come in Australia. Did you know their store footprint with Glassons Aust is 33 and with Glassons N.Z. its 36 ? That's right, less stores in Australia at present than N.Z. and yet the total addressable market there is well over 5 times the size of N.Z. Here's my hint to you mate, mull over the opportunity for ongoing strong growth they have over there.
You are right, Too much analysis causes paralysis. Have been in that situation many a time, also happy with big div. last Friday, and only 14 weeks until the next one. I sent you a pm. today, but not too sure if you got it. Not very good with all this technology.

[Rawz]

Ive decided to wait for the AGM before i invest

[winner69]

Ive decided to wait for the AGM before i invest


......you waiting for not so good news and getting them a buck cheaper .... clever move

[Rawz]

......you waiting for not so good news and getting them a buck cheaper .... clever move

Your consumer confidence post on whs thread earlier today scared me. Your fault I didnt invest this morning, W69

Have sold my WHS shares. Ready to go.

Maybe i just buy more Harmoney shares instead

[winner69]

beagle me old mate - don't forget to get the bakers first thing in the morning .... the meeting is early .... and they might even still be warm

Why not treat yourself --- get custard squares or chocolate eclairs or maybe a choc fudge cake

and dont forget your vaccine pass ... face mask ... and scan in

[Waltzing]

"choc fudge cake"

No NO NOOOOO!!!

the virus loves this stuff... bad... Bad ... Very BAD!!!

Kiwi Fruit smoothie and banana for breakfest...




:eek2:

[LaserEyeKiwi]

More good news - record retail spending. I prefer to rely on hard facts rather than wishy washy “confidence” thoughts.

RECORD SPENDING
Worldline (Paymark) is reporting (https://www.interest.co.nz/sites/default/files/2021-12/WORLDLINE%20MEDIA%20UPDATE_20%20Dec%202021_NZ%20on %20track%20for%20record%20Christmas%20spend.docx) that with just five days left till Christmas, spending at retail stores is trending at record levels. While the easing of Auckland’s Covid-19-induced boundary restrictions last week allowed for more movement of people across the country resulting in higher spending on accommodation in the Bay of Plenty, Waikato and Auckland/Northland regions, the dominant pattern across the nation was the ongoing surge in spending ahead of Christmas Day.

[LaserEyeKiwi]

Your consumer confidence post on whs thread earlier today scared me. Your fault I didnt invest this morning, W69

Have sold my WHS shares. Ready to go.

Maybe i just buy more Harmoney shares instead

I presume this is sarcasm? No one would seriously base an investment decision on one (notoriously inaccurate) consumer confidence survey?

[Waltzing]

westpac confidence survey wasnt very chipper saying house hold balance sheets in 2021 has not growth in wealth... well except for housing..

[Rawz]

I presume this is sarcasm? No one would seriously base an investment decision on one (notoriously inaccurate) consumer confidence survey?

Partly. I reckon that confidence survey is true. 2022 is going to be a tough year for a lot of households. Wages will not keep up with inflation. And a lot of mortgages are going to get repriced next year. Purse strings will tighten.

Feel like this has already been hashed out on here anyways….

[LaserEyeKiwi]

Seems like we need a catch all “retail” thread for these more general economy related debates.

[Waltzing]

Just stating summary of the survey commentary in the NZ News feeds...no opinion held.

yes retail thread a good idea...

[Beagle]

"choc fudge cake"

No NO NOOOOO!!!

the virus loves this stuff... bad... Bad ... Very BAD!!!

Kiwi Fruit smoothie and banana for breakfest...

:eek2:

Thank you, I am well and truly fat enough already. A fine selection of fruit smoothies are always a feature of the Beagle clan's well stocked fridge...my personal favorite is the Blueberry Bomb https://www.simplysqueezed.co.nz/our-range/smoothies/ Banana's also almost always on hand.

Nobody wants to see me looking like this, least of all me lol

13337

[Balance]

All will be revealed before market opens tomorrow.

[Ferg]

Interesting thought process Fiordland Moose. Thanks for sharing.

Another factor to consider is USD headwinds, often purchases ex Asia are conducted in USD although I note there is a very weak positive correlation between the purchasing power of the NZD and the HLG GP% - FX hedging will be masking/smoothing the impact.

If you take a longer term view on GP and costs, this picture based on the last decade of annual reports tells a story:

13339

In summary it's a really boring graph. But boring is good. It shows margin as a % of sales is relatively stable, variable costs are falling (being Selling & Distribution) relative to sales, and admin costs are falling as fixed costs are spread across a higher sales base. The net result is underlying profit (which has "other revenues" excluded) has grown to 13.9% of sales since a low of 8.0% in 2016, although this is the first time it is over 13.6% since 2010. The conclusion is costs are stable, and Management have consistently proven they have costs under control despite the occasional setback or headwind.

If you are seeking something to be concerned about this would the decline in GP% over the past few years being 61.3% in 2018 -> 60.0% -> 58.8% -> 57.4% in 2021. However, this is being mostly offset by a decline in other variable costs over the same time period from 38.5% -> 38.3% -> 37.5% -> 36.7%. Another thing is the reduction in occupancy costs from $5.7m in 2020 to $1.4m in 2021 - is that sustainable? Or will there be increased admin/occupancy costs in 2022 which means the 2021 profit was artificially high?

To others points we need to look at top line sales. Others have mentioned the split of sales (e.g. Glassons in Oz, online growth etc.) but following is a very basic high level graph showing the annual growth in sales and the 10 year compound annual growth rate.

13340

2021 was a 10 year spike, partly due to the flat base in 2020. The 10 year annual compound growth rate has ticked over 5% in 2021. Hardly stellar and you would not call this a growth company. It is however stable, predictable, proven and free of interest bearing debt. For decades the business has grown (sales and stores) at what one might call a pedestrian or controlled rate. But that is a good thing. HLG did not jump the ditch all guns blazing which often results in cash flow headaches with high growth in costs and inventory.

Winner often puts up electronic card spend and market share graphs which are handy to know. They might not look so flash but the measure for me is whether the growth in sales exceeds inflation (and if one wants to take this to another level, you would compare it to population growth). The average growth in sales over the past 5 years is +11% per annum. Whether this is a temporary blip / tailwind or the start of something bigger remains to be seen.

In conclusion it is a boring company; it is proven and predictable and the dividends are relatively safe. You are right to time your entry based on macro trends, rather than the micro trends of daily movements. This one is staying in the bottom drawer for me. I am 2 or 3 dividends away from free carry. In the event there is some sort of correction and a price blip downwards, I will accumulate some more.

[winner69]

Maybe some correlation between currency and EBITDA margin. This seems to have broken down in the last couple of years. Brokers are forecasting a 14% margins for this year. I think management will have to be at the top of their game to fight against the currency tide.



Year
NZDUSD
EBITDA Margin
Change in Currency
Change in EBITDA Margin
Notes


2006
0.649732
15.49%





2007
0.736172
17.74%
13.30%
14.53%



2008
0.714949
14.32%
-2.88%
-19.28%



2009
0.635232
11.95%
-11.15%
-16.55%
Recession


2010
0.721623
13.96%
13.60%
16.82%



2011
0.792322
14.00%
9.80%
0.29%



2012
0.810275
15.58%
2.27%
11.29%
Included insurance payout


2013
0.8203
14.79%
1.24%
-5.07%
Management Blamed late start to winter


2014
0.8306
13.06%
1.26%
-11.70%
Management admitted poor product mix


2015
0.740516
14.31%
-10.85%
9.59%
Broker forecasts


2016
0.68

-8.17%





Noodles did this a while ago ….adds a few prior years tonFergs numbers

Noodles comments are still relevant today

[Ferg]

Noodles did this a while ago ….adds a few prior years tonFergs numbers

Noodles comments are still relevant today

Thanks Winner. The correlation between Noodles numbers looks stronger between the NZD and EBITDA, whereas my calculations of the NZD versus GP% were weaker, and getting weaker as years progressed. I would expect the USD impacts COGS, and very little below GP so I am surprised the correlation appears stronger with EBITDA (although EBITDA is a subset of GP). I might revisit but I can see that with Noodles' numbers [...generally as the NZD gets stronger the EBITDA % gets higher but...] this relationship breaks down from 2013 to 2016. Interesting. Maybe it coincides with FX hedging policies? If so, we may need to lag one data set by a year to see if the relationship is stronger.

[Rawz]

Excellent post Ferg!!!

[Beagle]

Thanks Ferg. You'll really enjoy it when you get to the free carry stage. This has been a wonderful ride for me since August 2016 @ ~ $2.70, then to exit pre Covid @ $6.20 as a risk mitigation strategy and bought back in August 2020 for $4. Add in all the high dividends over the years and the strategic Covid risk mitigation positioning and it must be nearly a 5 bagger...I might work it out one day. Not too shabby for just over 5 years and for a company I stated back then was only ever bought for its dividend yield lol

I think its a fabulous company but I wouldn't rule out being slightly biased and having some emotional attachment issues too lol

I think its dirt cheap (forward PE of just under 13 if they can match last years eps), considering they've proven to have broken through into Australian with a now well embedded 5 year track record of strong growth. So much potential remains untapped in that market that to be honest (and I never thought I would say this about HLG being such a classic dividend hounds stock), I'd be quite pleased to see them keep the dividend well below eps and ramp up the Australian store expansion.

I can't think of a better GARP stock ( https://www.investopedia.com/terms/g/garp.asp ) on the NZX but TRA and HGH are strong contenders.

[Waltzing]

retail fashion is always a bit up and down, you cant expect growth all the time surely.. They havnt done too bad and as MR B says a debt free balance sheet.

Its not a global power house but must have across the NZX ASX. Nice little stock that you dont have to be too concerned about.

[winner69]

Coffee and scones being served now I guess

Hope nobody turned up without a Vaccine Pass ...could be awkward

[Beagle]

Right....I have my fruit smoothie and banana ready to go as kindly suggested by Waltzing. No sausage rolls and scones to make the dog any fatter....well not today anyway lol

[winner69]

No previous guidance so todays news is not a profit downgrade

But in essence saying F22 not going to be anything like $33m in F21 .... that's how I read it anyway

[Sideshow Bob]

Right....I have my fruit smoothie and banana ready to go as kindly suggested by Waltzing. No sausage rolls and scones to make the dog any fatter....well not today anyway lol

Take care with the Smoothies Beagle! Can be high in sugar....even the no added sugar.....

In the meantime, here are the meeting addresses from the CEO/Chairman:

The Chairman and Group CEO's Address at the AGM - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/385087)

[Beagle]

Current year is going to be impacted is how I read it. Was always going to be the way. I am investing long term so short term doesn't faze me to much.
Good to see freight issues are reducing.

[Rawz]

Glad I didnt invest prior to AGM. Should always listen to your gut.

Might be able to pick some up around 6 bucks eh?

[LaserEyeKiwi]

Has the livestream gone offline for anyone else?

[sb9]

No previous guidance so todays news is not a profit downgrade

But in essence saying F22 not going to be anything like $33m in F21 .... that's how I read it anyway

Not great reading from AGM notes unfortunately, think retail is going to struggle next year especially if you deal in USD for imports.

[Beagle]

Has the livestream gone offline for anyone else?

Yes its running like a 3 legged blind pig dog. Log out and log back in is my suggestion. Running for me now.

[kjp64]

Yes I am watching on 2 devices are both are offline

[Neophyte]

First 20 weeks sales down 10.14%, vs first 8 weeks sales down 18.9%. Some very quick math would suggest the past 12 weeks sales down 4.3% on last year. Not a disaster considering Auckland and some other stores in NZ and Australia were still closed for some of these 12 weeks

Very encouraging to hear freight costs are starting to reduce and the supply chain issues are getting a little better and that there is still a strong focus on delivering on the growth prospects in Australia

[Rawz]

First 20 weeks sales down 10.14%, vs first 8 weeks sales down 18.9%. Some very quick math would suggest the past 12 weeks sales down 4.3% on last year. Not a disaster considering Auckland and some other stores in NZ and Australia were still closed for some of these 12 weeks

Very encouraging to hear freight costs are starting to reduce and the supply chain issues are getting a little better and that there is still a strong focus on delivering on the growth prospects in Australia

One would have thought past 12 weeks would have seen a huge catch up spend

[winner69]

One would have thought past 12 weeks would have seen a huge catch up spend

.....like the HUGE rebound / catchup

[winner69]

Beagle ---- you still awake ...... bit monotonous isn't he

[Rawz]

Looks like there is no firm brick and mortar expansion plans for Glassons next year. More so further digital expansion will be relied on to grow sales.

I posted a couple of weeks back that we could be buying this at $7 this time next year. Probably the case now. At least its a good dividend payer.

[LaserEyeKiwi]

Looks like there is no firm brick and mortar expansion plans for Glassons next year. More so further digital expansion will be relied on to grow sales.

I posted a couple of weeks back that we could be buying this at $7 this time next year. Probably the case now. At least its a good dividend payer.

Why do you think that? They have already opened one new store in the new year (Adelaide), moved one of the Sydney stores, and repeatedly said they are looking at new locations for store openings in Australia.

James just confirming they have 3 more sites selected for new store openings in Australian in early 2022.

[Beagle]

Beagle ---- you still awake ...... bit monotonous isn't he

Given up on the so called livestream...

I think I have the gist of this. Its pretty much as I expected. Sales year to date still a bit down on last year which I think is a perfectly satisfactory situation considering last year we were all out and about thinking the worst of the pandemic was behind us and this 20 week period included a lengthy period of lockdowns on both sides of the Tasman. Encouraging to hear pressures in the supply chain and freight are ameliorating. Excellent well managed company with strong growth prospects going forward, albeit in the short term with obvious ongoing Covid headwinds. Very happy holder.

[winner69]

Sales down 10% after 20 weeks -- that's about $8m of Gross Margin

Hope next few weeks see roceting sales and that they are screwing the likes of KPG for heaps in rent relief

[LaserEyeKiwi]

Given up on the so called livestream...

I think I have the gist of this. Its pretty much as I expected. Sales year to date still a bit down on last year which I think is a perfectly satisfactory situation considering last year we were all out and about thinking the worst of the pandemic was behind us and this 20 week period included a lengthy period of lockdowns on both sides of the Tasman. Encouraging to hear pressures in the supply chain and freight are ameliorating. Excellent well managed company with strong growth prospects going forward, albeit in the short term with obvious ongoing Covid headwinds. Very happy holder.

Livestream is solid now - hasn’t dropped out for 10 minutes at least. James Glassons comments were good talking about Australia store expansion plans.

Edit: I think I jinxed it - or is it due to everyone who gave up now trying to get back on?

[LaserEyeKiwi]

Q: temporary store closure impacts?
A: online does pick up a lot of slack, but there is increased demand overall when stores reopen. During store closure period supply was directed to online which is more efficient.

(More Q&A to come after votes)

[winner69]

Q: temporary store closure impacts?
A: online does pick up a lot of slack, but there is increased demand overall when stores reopen. During store closure period supply was directed to online which is more efficient.

(More Q&A to come after votes)

....you must have stopped listening ...... there was a bit more to the answer than that

[Beagle]

Livestream is solid now - hasn’t dropped out for 10 minutes at least. James Glassons comments were good talking about Australia store expansion plans.

I tried again. It keeps dropping out. I've given up again. Its doesn't matter to me. I am very comfortable with the long run future of the company.
Maybe there will be a replay of the meeting later that I can watch that runs properly.
Back to more important taks... looking for the right boat... Anyone got a half share in a good Riviera they want to sell me ?

[LaserEyeKiwi]

....you must have stopped listening ...... there was a bit more to the answer than that

Just trying to summarize. Really annoying that NZ companies don’t have their earnings and AGM calls up on their investor pages to listen to for at least a month following the event. It’s standard practice for most US companies.

[see weed]

Sorry about that. Just sold 10% of my holding I bought 9 months ago, for tax reasons. Will not be selling anymore this year, but will buy more in Jan Feb.

[Rawz]

Ferg's post yesterday predicted this. Huge growth last year.. it was only natural the sales will fall back this year to keep the 5 year 10% CAGR

No surprises in fall of sales and profit. Go back to sleep everyone

[winner69]

At least market doesn't seem to perturbed ...they must be lsitening to rawz and his no surprises here remark

[winner69]

They probably had meeting this week hoping news hounds / commentators would have already left town and won’t notice the decline in sales.

Warren didn’t really want to be there did he

[Waltzing]

sale will go up until the next show stopper...

"We are aware that there will continue to be disruption ahead, but the commitment and agility of ourTeam at Hallenstein Glasson’s enables us to be equipped to face challenges and respond proactively. The start to the new season has been disruptive, with lockdowns in Australia for Victoria and NewSouth Wales since the start of the Financial Year and Lockdown in New Zealand, particularlyAuckland’s extended lockdown. This has a had an adverse impact on the first 3 months profitabilitybut now that all stores have re‐opened its promising to see the stores trading again. "


as expected ... why sell now unless you expect below 6 dollars and big disruptions.

"The launch of the Glassons App has been a huge success withover 450,000 downloads. "

not bad...

[winner69]

No matter what’s thrown at them HLG still churn out a decent profit ….a fair proportion going back to shareholders

Pretty imptessive profits this century ….(ieven if a bit cyclical)