HLG - Hallenstein Glasson

[Recaster]

good work . any shot of getting those in an excel book lol

Lol. That might take half a forest :-).

[Ferg]

Thanks Ferg. Appreciate the corrections and pointers.

Have updated the dividend figures to reflect the stock exchange summary. I was using the annual report notes to the accounts which omitted the final dividend.

Have made a comment about the zero interest bearing debt. Thanks for the pointer.

My analysis was a bit of a rushed job on this company I fear! :-(

You're welcome. It didn't look rushed at all so don't worry about that. Plus I recommend you hang onto your spreadsheets, you don't want to give away your IP to roving [bands/gaggles/herds/gangs] of cheeky Mooses/Meeses.

[Rawz]

Half the fun is building the spreadsheet as well

[Muse]

You're welcome. It didn't look rushed at all so don't worry about that. Plus I recommend you hang onto your spreadsheets, you don't want to give away your IP to roving [bands/gaggles/herds/gangs] of cheeky Mooses/Meeses.

The meese have no shame

This one is probably quasi dyslexic . So after I spend an hour typing in the financials I get to spend another half an hour trying to figure out why nothing adds up right

[winner69]

Recaster - you could pull out the Wages expense as a separate line as a good performance indicator

Rolling annual total of gross wages is interesting

HLG seem to have the same problem as OCA - wages going up much faster than sales..... continuing for rest of this financial year

12mths Wages
Jan19 $49.6m
Jul19 $51.7m
Jan20 $53.9m
Jul20 $55.0m
Jan21 $58.3m
Jul21 $60.7m
Jan22 $62.7m

[Waltzing]

Winner(^n) ... inflation ... :scared:

[winner69]

Winner(^n) ... inflation ... :scared:

Wages up and sales declining

Need to reduce headcount and close stores maybe

[Waltzing]

winner(n), extracting specific PL items and doing some ratio drill downs certainly is a good analysis step.

A company that can expand Profit before tax and depreciation other revaluation rubbish without the ADMIN of the company expanding at the same rate as sales is a Winner(). There arnt many that can do it.

[winner69]

Percy has a rough rule of thumb re whats a good or bad wages to sales ratio ..... wonder what he'd say about that being about 20%

[Muse]

Wages up and sales declining

Need to reduce headcount and close stores maybe

surely only close stores if they are unprofitable?

interesting time series, those will be gross wages right no impact from wage subsidies which I guess would be recorded elsewhere as grant income?

only final thought but new stores - they take about 3 years for a store to fully mature with sales ramping up each year. so if a burst of new stores, could impact the wages/revenue ratio. not sure that is the case here with steady as she goes new store approach

[winner69]

surely only close stores if they are unprofitable?

interesting time series, those will be gross wages right no impact from wage subsidies which I guess would be recorded elsewhere as grant income?

only final thought but new stores - they take about 3 years for a store to fully mature with sales ramping up each year. so if a burst of new stores, could impact the wages/revenue ratio. not sure that is the case here with steady as she goes new store approach

I don't know if they are concerned or not but in total stores are now selling less than 3 years ago (and a few more stores as well)

No doubt covid and increase in online sales a cause but is this resulted in a structural change in the way they do business?

[Recaster]

Recaster - you could pull out the Wages expense as a separate line as a good performance indicator

Rolling annual total of gross wages is interesting

HLG seem to have the same problem as OCA - wages going up much faster than sales..... continuing for rest of this financial year

12mths Wages
Jan19 $49.6m
Jul19 $51.7m
Jan20 $53.9m
Jul20 $55.0m
Jan21 $58.3m
Jul21 $60.7m
Jan22 $62.7m

Great idea. May I ask where you got those figures?

[winner69]

Great idea. May I ask where you got those figures?

In Annual and Interim Reports in the Notes ..... search for Occupancy and you will find quickly

[nztx]

In Annual and Interim Reports in the Notes ..... search for Occupancy and you will find quickly


Did you remember to net the NZ & Aussie Wage Subsidies off the gross expense in those Wage & Salaries figures ?

[winner69]

Did you remember to net the NZ & Aussie Wage Subsidies off the gross expense in those Wage & Salaries figures ?

Yes - showed gross wage numbers as wanted to get a feel of what underlying wage costs were .... especially when assessing wages going forward

[nztx]

Yes - showed gross wage numbers as wanted to get a feel of what underlying wage costs were .... especially when assessing wages going forward


Okay - fair enough, but bear in mind that there will be quite a bit of disruption in later periods,
Govt prescribed home leave etc, which Govts on both sides have stumped up a fair bit of coin
to cover for HLG and other employers as well :)

[winner69]

Electronic Card Spend March Months from Stats NZ

Apparel sales down 11.7% on March last year .... follows Feb being down 7.4% on pcp

HLG said sales Feb/March were only down a bit so Aussies must be buying clothes big

KIwis not spending much on clothes these days ....

[Waltzing]

HLG still took a hit today.

BRISC stayed up and WHS was hit too.

Winter season sales up?

what winter season, its an Indian summer.

[sideline]

Question: there was a 72 share trade at 6.05 on open (~430 $) but it is apparently not price-setting??
What are the rules or limits for price-setting trades these days? Can I look that up somewhere?? Thx

[Recaster]

No debt, good profitability, strong operating cash flow and doing well in Australia with Glasson.

Dividend dropped though and there was negative retained earnings after dividend payment.

My analysis of the numbers for the interim accounts to 1 February, 2022 here:

https://recastinvestor.substack.com/p/update-hallenstein-glasson-holdings

[Ferg]

My analysis of the numbers for the interim accounts to 1 February, 2022 here:

https://recastinvestor.substack.com/p/update-hallenstein-glasson-holdings

Nice work Recaster. Thanks for sharing.

[Muse]

Nice work Recaster. Thanks for sharing.

Aye thanks Recaster - always enjoy seeing all the financials lined up the way you present them.

PS - ferg wishes you’d post the excel files on your website. That greedy bugger!

[Recaster]

Lol. Thanks guys. Appreciated 🤣.

[Beagle]

Extract, (slightly improved with comment about diminishing imputation credits), from my post in the retail stocks thread this morning. Been a fabulous run for me with HLG but WHS is on far more compelling metrics than HLG and is a consumer staple. HLG has some elements of being a consumer staple but could easily also be considered to be more consumer discretionary and spending on discretionary purchases is vulnerable in more challenging times.

HLG is probably in a holding pattern until summer when I would expect people will be out updating their wardrobes to go "peacocking". Its a long time until December when the next dividend is due and the low and falling rate of imputation credit attached isn't helping my sentiment towards them as there's few things more distasteful than paying tax twice, once by the company itself in Australia on Glassons Au profits which make up the lions share of income now and again by shareholders when those profits are distributed.

I expect this new problem of very modest level's of imputation credits will get worse over the years ahead as Glassons Au profits which are unable to be imputed continue to be a more dominant percentage of overall group profits so as an income stock HLG is no longer attractive to me. It was paying a 15% gross yield when I got in back in late 2016 @ $2.75 and now is a mere 5%. Disc: I recently completely sold out in the late $6's and invested into WHS at an average of $3.09. I will revisit HLG in due course if the yield becomes more attunable to my investment objectives.

[clearasmud]

Extract, (slightly improved with comment about diminishing imputation credits), from my post in the retail stocks thread this morning. Been a fabulous run for me with HLG but WHS is on far more compelling metrics than HLG and is a consumer staple. HLG has some elements of being a consumer staple but could easily also be considered to be more consumer discretionary and spending on discretionary purchases is vulnerable in more challenging times.

HLG is probably in a holding pattern until summer when I would expect people will be out updating their wardrobes to go "peacocking". Its a long time until December when the next dividend is due and the low and falling rate of imputation credit attached isn't helping my sentiment towards them as there's few things more distasteful than paying tax twice, once by the company itself in Australia on Glassons Au profits which make up the lions share of income now and again by shareholders when those profits are distributed.

I expect this new problem of very modest level's of imputation credits will get worse over the years ahead as Glassons Au profits which are unable to be imputed continue to be a more dominant percentage of overall group profits so as an income stock HLG is no longer attractive to me. It was paying a 15% gross yield when I got in back in late 2016 @ $2.75 and now is a mere 5%. Disc: I recently completely sold out in the late $6's and invested into WHS at an average of $3.09. I will revisit HLG in due course if the yield becomes more attunable to my investment objectives.
Ouch. Could it be worth it to dual list for the Aussie holders (I'm one atm) and create franking credits.
Australians would be keen to own this company and bid the share price up

[nztx]

A nice dividend landed yesterday :)

Now, let's see what happens to the SP while everyone is amused elsewhere .. for a while :)

[Beagle]

Ouch. Could it be worth it to dual list for the Aussie holders (I'm one atm) and create franking credits.
Australians would be keen to own this company and bid the share price up

I agree as most of the profit is now derived in Australia but last time I checked it was very expensive to list there and ongoing listing fees are not cheap either !

[Waltzing]

Said a while back it should be listed on the ASX and maybe delisted here but that might cause a protest movement to appear.

[Muse]

Extract, (slightly improved with comment about diminishing imputation credits), from my post in the retail stocks thread this morning. Been a fabulous run for me with HLG but WHS is on far more compelling metrics than HLG and is a consumer staple. HLG has some elements of being a consumer staple but could easily also be considered to be more consumer discretionary and spending on discretionary purchases is vulnerable in more challenging times.

HLG is probably in a holding pattern until summer when I would expect people will be out updating their wardrobes to go "peacocking". Its a long time until December when the next dividend is due and the low and falling rate of imputation credit attached isn't helping my sentiment towards them as there's few things more distasteful than paying tax twice, once by the company itself in Australia on Glassons Au profits which make up the lions share of income now and again by shareholders when those profits are distributed.

I expect this new problem of very modest level's of imputation credits will get worse over the years ahead as Glassons Au profits which are unable to be imputed continue to be a more dominant percentage of overall group profits so as an income stock HLG is no longer attractive to me. It was paying a 15% gross yield when I got in back in late 2016 @ $2.75 and now is a mere 5%. Disc: I recently completely sold out in the late $6's and invested into WHS at an average of $3.09. I will revisit HLG in due course if the yield becomes more attunable to my investment objectives.


The gradual erosion of imputation credits is an issue for dividend loving kiwis but there is one partial solution to it that could be implemented, transfer pricing. I've involved in more than a few multi jurisdiction retailer or apparel companies and we always gave regard to (with high levels of outside professional advice) a transfer pricing policy that ensures the appropriate level of profit earnt and tax is paid where the bulk of the underlying value creation occurs. IE, the design, procurement, marketing, and financing functions. IE, glassons AU should 'buy' stock from HLG at 'wholesale' prices or pay HLG a fee to reflect those charges.

Glancing at the FY21 stat accounts it appears Glassons AU has slightly better GP margins than Glassons NZ - that signals no transfer pricing arrangement as any inter company fees to recover those vital functions would normally be borne in COGS and dimish gross profit margins.

I've had a brief glance through linkedin and it appears the majority of glassons non retail staff (ie design, procurement, marketing & finance) are in NZ (but certainly not ALL of them - James Glassons is in AU for instance).

Say if some buyer came along and bought Glassons Australia exactly as it was. Would that business unit be able to continue to function at the same level of profitability without all the designers, the procurement expertise in this challenging environment, the marketing savvy which Glassons excel at, and financial functions to make sure everything is paid and received on time? No. They would have to hire more, or look to have some sort of contract with HLG NZ that continued to provide those vital functions for a fee. A transfer pricing policy should reflect those sort of arms length arrangements in the company's intercompany arrangements.

From a tax perspective this would do 3 things. It would lower HLG's tax risk in NZ as it could be argued HLG should be charging more for some of those services. It would increase the tax paid in NZ. And it would increase the imputation credits available to HLG's overwhelmingly NZ shareholder base.

Overtime Glassons could centralise more of its non retail staff in NZ to further maximise the profits and taxes paid in NZ, leaving more vital CEO, HR, and handful of design roles in AU.

That's the 'maximise NZ dividend' shareholder gameplan.

The other gameplan would be to go harder in AU. If I was running that, I'd rebrand HLG to simply Glassons, pursue a secondary listing in AU, increase store openings as % of existing stores to 15-20% PA for the next few years (currently less than 10%), and one way or another get a few aussie centric research analysts to cover the stock. Aussie comps trading on inferior economics have far better multiples than HLG and a rerating should be targeted overtime. and would ignore the transfer pricing option above.

Arguably I'd say option 2 provide for better long term total shareholder returns. But at the moment I don't see HLG as having any definite strategy other than steady as she goes.

In either case, I'd probably look to either push Hallensteins to include a great level of more unbranded basic staples OR overtime divest the whole thing entirely. Hallensteins is a bit of an albatross on Glassons neck, to be honest.

HLG have a lot of potential that could be unlocked. They just move slow and don't engage well with the investment community. They never give any meaningful guidance, they don't do investor days that all the investment banks run, they are among the worst at providing updates between half year and full year announcements, they basically don't make any effort outside the minimum requirements (IE, they act like a private company that happens to be on the stock exchange). And as a consequence they've become content to become a divy yield stock, and with that now coming under pressure, they need a bit of a kick on the bum.

[nztx]

The gradual erosion of imputation credits is an issue for dividend loving kiwis but there is one partial solution to it that could be implemented, transfer pricing. I've involved in more than a few multi jurisdiction retailer or apparel companies and we always gave regard to (with high levels of outside advice) a transfer pricing policy that ensures the appropriate level of profit earnt and tax is paid where the bulk of the underlying value creation occurs. IE, the design, procurement, marketing, and financing functions. IE, glassons AU should 'buy' stock from HLG at 'wholesale' prices or pay HLG a fee to reflect those charges.

Glancing at the FY21 stat accounts it appears Glassons AU has slightly better GP margins than Glassons NZ - that signals no transfer pricing arrangement as any inter company fees to recover those vital functions would normally be borne in COGS and dimish gross profit margins.

I've had a brief glance through linkedin and it appears the majority of glassons non retail staff (ie design, procurement, marketing & finance) are in NZ (but certainly not ALL of them - James Glassons is in AU for instance).

Say if some buyer came along and bought Glassons Australia exactly as it was. Would that business unit be able to continue to function at the same level of profitability without all the designers, the procurement expertise in this challenging environment, the marketing savvy which Glassons excel at, and financial functions to make sure everything is paid and received on time? No. They would have to hire more, or look to have some sort of contract with HLG NZ that continued to provide those vital functions for a fee. A transfer pricing policy should reflect those sort of arms length arrangements in the company's intercompany arrangements.

From a tax perspective this would do 3 things. It would lower HLG's tax risk in NZ as it could be argued HLG should be charging more for some of those services. It would increase the tax paid in NZ. And it would increase the imputation credits available to HLG's overwhelmingly NZ shareholder base.

Overtime Glassons could centralise more of its non retail staff in NZ to further maximise the profits and taxes paid in NZ, leaving more vital CEO, HR, and handful of design roles in AU.

That's the 'maximise NZ dividend' shareholder gameplan.

The other gameplan would be to go harder in AU. If I was running that, I'd rebrand HLG to simply Glassons, pursue a secondary listing in AU, increase store openings as % of existing stores to 15-20% PA for the next few years (currently less than 10%), and one way or another get a few aussie centric research analysts to cover the stock. Aussie comps trading on inferior economics have far better multiples than HLG and a rerating should be targeted overtime. and would ignore the transfer pricing option above.

Arguably I'd say option 2 provide for better long term total shareholder returns. But at the moment I don't see HLG as having any definite strategy other than steady as she goes.

HLG have a lot of potential that could be unlocked. They just move slow and don't engage well with the investment community. They never give any meaningful guidance, they don't do investor days that all the investment banks run, they are among the worst at providing updates between half year and full year announcements, they basically don't make any effort outside the minimum requirements (IE, they act like a private company that happens to be on the stock exchange). And as a consequence they've become content to become a divy yield stock, and with that now coming under pressure, they need a bit of a kick on the bum.


but is finished inwards product shipped direct from manufacturer into Aussie & NZ separately ?

To ship here then sort out what goes over yonder would be pretty costly & inefficient with
transhipping .. yonks ago shipping across the tasman was pretty expensive & problematic
& cheapest option to send direct to NZ and Aussie from manufacturer. I wouldn't think that situation has changed much

It may be that Aussie markets are able sustain higher achieved markups & GP than NZ, which
if the case means only recoveries of some expenditure apportioned between retail divisions on either side
of the ditch are possible ?

Dual listing may allow franking credits on one side & imputation credits here ?

That solution may in itself allow a higher imputation flow to NZ holders, if
Aussies take a liking to what the see - if listed on ASX

The Div yield in itself might prove attractive enough to see SP grow fast on the
low 60m or so shares on issue too - if looking from over Aussie at HLG

Perhaps something higher than $10 Kiwi might happen eventually with dual listing ? ;)

What are the ASX listed Aussie Rag Traders Div Yields & Earnings to SP looking like ?

[Rawz]

Interesting post FM, thanks for sharing!

[Muse]

but is finished inwards product shipped direct from manufacturer into Aussie & NZ separately ?

To ship here then sort out what goes over yonder would be pretty costly & inefficient with
transhipping .. yonks ago shipping across the tasman was pretty expensive & problematic
& cheapest option to send direct to NZ and Aussie from manufacturer. I wouldn't think that situation has changed much

It may be that Aussie markets are able sustain higher achieved markups & GP than NZ, which
if the case means only recoveries of some expenditure apportioned between retail divisions on either side
of the ditch are possible ?

Yes finished products no doubt are shipped directly to end location wherever possible (doubling handling is avoided at all costs in apparel) and yes appropriate policies can be implemented for that, as it is the norm. I've seen these sort of policies reviewed by both IRD, ATO, and other jurisdictions.

Its hard to know looking from the outside based on segment notes in stat accounts what is happening. I'd wager HLG have a deminimus level transfer pricing going on, with that not captured in COGS but in the implied 'other expenses' within segment stat accounts. But with both companies having nearly the same PBT % margins, I don't think HLG is charging Glassons Pty enough for the services rendered. And whatever the case actually is (as I am just speculating based off some segment notes), if HLG really were content to just be a 'steady as she goes divy stock' for kiwis, they should centralise more staff in NZ from AU, charge for it, and maximise the level of IC's available to new zealand shareholders.

But I prefer the focused V2 'go hard AU' gameplan as a way to maximising total shareholder returns even if dividend yields are diminished for NZ shareholders. I follow a number of aussie comps that trade in very similar segments to glassons I'll post about later. Some of which may interest you in your own right, depending on your appetite for apparel/retail in current environment.

[percy]

Love the fine logistic talk.
Yet we must remember where the stock came for the online sales when the Aussie stores were closed because of Covid.
Yes you have guessed correctly....From the closed stores...

[Waltzing]

Although not pertinent to public companies recent polling of SME showing now confidence is low might give a hint to how the wider consuming public is also thinking.

SME confidence down sharply as outlined in a stuff article in its business section.

[Beagle]

Great post FM and I agree 100% with your suggestion of faster store rollout of Glassons Au but HLG is a very traditional company, as you would expect being N.Z's oldest listed company, and run very conservatively.

Its hard to estimate to what extent future dividends will be imputed because to do that you need to make a call on N.Z profitability of Hallensteins and Glassons N.Z. v the group but the trend down is clear and the most recent level of imputation, (about 47%) exceeded the relative percentage of N.Z. store profitability so they used up some existing ICA account credits with that most recent dividend and its safe to say they imputed it as much as possible this time. That said N.Z. store profitability might have reached a cyclical low in the most recent half so maybe somewhere between a 25-40% level of imputation is a reasonable estimate of what's possible going forward.

What's crystal clear is that the good old days of full imputation credits are nothing but a fond memory now.

[Beagle]

Hallensteins CEO given the boot. Performance not good enough. (Says it in more politically correct words than that but that's the gist of it I reckon).
Possibly, in my opinion anyway, a good example of the "Peter Principle" promoting someone and keeping promoting them until they get to a position where they're not really up to the task. https://www.nzx.com/announcements/390714

[winner69]

Hallensteins CEO given the boot. Performance not good enough. (Says it in more politically correct words than that but that's the gist of it I reckon).
Possibly, in my opinion anyway, a good example of the "Peter Principle" promoting someone and keeping promoting them until they get to a position where they're not really up to the task. https://www.nzx.com/announcements/390714


Said the group needed to reduce head count as wage bill was spiralling out of control ……like Oceania lol


Quite a few more heads need to go I reckon


And maybe some stores to close


Grow profits my cutting expenses ….not always sustainable

[winner69]

Hallensteins CEO given the boot. Performance not good enough. (Says it in more politically correct words than that but that's the gist of it I reckon)........

Then again Jason might have thought hard and long about Hallensteins future prospects and decided that it is really a dog without any real prospects of ever being successful ..... no growth over many years and declining profits

Probably thinks putting his 'energy into other opportunities' will be quite rewarding for him..... that's what this 'Great Resignation' trend results in

[LaserEyeKiwi]

11 days notice of a CEO resigning. Obviously much more to that story.

[RTM]

https://www.asx.com.au/asxpdf/20220419/pdf/45836j8dj72700.pdf

Take a look at this one...sounds pretty brutal !

[winner69]

11 days notice of a CEO resigning. Obviously much more to that story.

Maybe going to be a competitor .... but that might have meant go today

[peat]

I see the negativity abounds and I hate to question the Beagle

But I wonder if the pattern since March shows a turnaround

13730
If there is any sign of a turnaround here and no breach of $5.70 I see up.

[Beagle]

Thanks for your thoughts Peat. I see it differently.

On the TA front I see the recovery in late March and into early April bounced off the declining 100 day MA trendline and failed to break above it so the downtrend is intact. It also broke down through the 30 day moving average shortly afterwards adding emphasis to the downtrend continuing at least for the short term.

Fundamentally, I see it making $19-20m this year for about 33 cps so its on a forward PE of 18 which is close to a record for HLG, albeit, probably on trough year earnings.

I don't see what the catalyst is for this to break out of its downtrend anytime soon ?

In the long term I think its a great stock but I think shareholders can probably expect some more short term pain in the months to come. Maybe shareholders can hope it tracks sideways for a while but its a long time until the next dividend in December.

[winner69]

Hey waltzing me old mate

Got the big sheets of paper and crayons out again to look at the HLG chart going back to last century

Still see 7/8 year cyclical low coming up..... sometime later this year .... maybe early last year after another not so good update after Christmas ..... low could be around $3.50 / $4.00 level (using thick crayons)

At $4.00 that's a PE of about 12 .....hmmm

All seems to tie in

Be pretty sad for some even if I'm only half right

[Beagle]

Big and key TA test coming up. Will it hold above the 52 week low of $5.75 ?

[Waltzing]

You guys are the Legends.

would 3.50 mean earning cut in half? thats pretty big call? Suppose if supply chain goes to hell in a hand basket and inflation goes even higher with no solution to oil and food.

Its back to the 1979?

78 was a revolution good year for kelvar carbon composite hull rowing and canoe designs.

Surfs up in the bay and its an endless summer in paradise.

[Rawz]

The HLG bulls are falling away. Always said it was overpriced compared to the other nzx retailers

[nztx]

now posted in correct thread :)

[Beagle]

Not really sure if HLG is really classified as consumer staples or consumer discretionary, probably more the latter.

[Waltzing]

Dont think there is anything in H Bros that is expensive enough to be considered much more than basic required clothing.

The way the cheeky boys and girls are locking up city blocks they may run out of workers to actual man anything much in CHMAO land.

There are some real ticking time bombs out there in the supply chain starting to appear.

[peat]

I see the negativity abounds and I hate to question the Beagle

If there is any sign of a turnaround here and no breach of $5.70 I see up.

Signs of something happening this week , strangely enough just like WHS.... tho admittedly not as good.

we will have Monday market down following Wall Street but hmmm, maybe we have life yet.

of course the overall environment is very weak at present ....

will check again at the end of next week. I'm visiting the 09 this week on business so wont have a chance till then.

[winner69]

NZD weakening v AUD --- suppose on Translation Glassons AU profits are higher?

[Waltzing]

WHS is a bouncy stock.

AUS going forward has more gas in the Tank.

[Waltzing]

611!!!!

stunning performance . unlike some other sectors today.

[Balance]

611!!!!

stunning performance . unlike some other sectors today.

Quality endures.

[winner69]

ABS arch retail sales

Clothing sector up 13.6% on March last year

Wow

[Waltzing]

"Clothing sector up 13.6% on March last year"

cant be right. Has the "End less Summer" ment everyone has to go out and buy more summer gear.

Winter soaks and boots will be next then if winter ever turns up.

Never seen so many Olympic paddlers or Rowers out biking back from training at lake karapiro in T shirts at this time of year.

[winner69]

From Stats NZ Card Spend in NZ data I always think is an interesting chart - showing apparel and durables spending trend pre covid and what's happened since

Apparel seems out of favour - rather spend ones cash on durables (furniture, hardware, appliance retailing etc etc) than apparel (clothing, shoes, jewellery, and watches) (at least in NZ)

Not what HLG want to see

[LaserEyeKiwi]

From Stats NZ Card Spend in NZ data I always think is an interesting chart - showing apparel and durables spending trend pre covid and what's happened since

Apparel seems out of favour - rather spend ones cash on durables (furniture, hardware, appliance retailing etc etc) than apparel (clothing, shoes, jewellery, and watches) (at least in NZ)

Not what HLG want to see

I had a hunch, and garnered a few pieces of “anecdata” today which are inline with it: Spending by women on office clothing has decreased dramatically specifically.

[BlackPeter]

From Stats NZ Card Spend in NZ data I always think is an interesting chart - showing apparel and durables spending trend pre covid and what's happened since

Apparel seems out of favour - rather spend ones cash on durables (furniture, hardware, appliance retailing etc etc) than apparel (clothing, shoes, jewellery, and watches) (at least in NZ)

Not what HLG want to see

Hmm - we replaced recently some of our bedware (linnen, covers, duvets) which is probably part of this stats. Just wondering - would this count as "durable" or as "apparel"? I guess the last set we had did hold for a long time (i.e. it used to be durable) and none of it could be purchased at HLG ... so maybe this is a giveaway ...

[Rawz]

Working form home.. lockdowns.. the good clothes hang on the rack and you wear your raggedy clothes at home..

Good clothes last longer. Dont need to be replaced..

[cyclist]

Working form home.. lockdowns.. the good clothes hang on the rack and you wear your raggedy clothes at home..

Good clothes last longer. Dont need to be replaced..

In my observation, they don't need to have worn out (or be even close to it) in order for them to be replaced.

[winner69]

I had a hunch, and garnered a few pieces of “anecdata” today which are inline with it: Spending by women on office clothing has decreased dramatically specifically.

What has happened to this 'peacocking' we hear about

[Beagle]

What has happened to this 'peacocking' we hear about

Maybe at a park near you https://www.bing.com/images/search?view=detailV2&ccid=lpnxLn0w&id=0BE71365226EFCA01755BBC68CF188C699C7169D&thid=OIP.lpnxLn0w8cVEFN6kGn39SwHaEy&mediaurl=https%3A%2F%2Fs1.ibtimes.com%2Fsites%2Fww w.ibtimes.com%2Ffiles%2Fstyles%2Fembed%2Fpublic%2F 2019%2F03%2F25%2Fpeacock.jpg&cdnurl=https%3A%2F%2Fth.bing.com%2Fth%2Fid%2FR.969 9f12e7d30f1c54414dea41a7dfd4b%3Frik%3DnRbHmcaI8YzG uw%26pid%3DImgRaw%26r%3D0&exph=3039&expw=4700&q=peacock%27s+hide+in&simid=608042476079290262&form=IRPRST&ck=9F3627E67351BBF62B1B22F06288CA88&selectedindex=1&ajaxhist=0&ajaxserp=0&vt=0&sim=11

I suspect people are probably getting ready to hunker down a bit for winter and just getting the consumer staples in these more challenging times.
Still nearly 10,000 Covid cases a day...might be a bit early for peacocking, maybe next summer ?

[Waltzing]

with the late Indian summer surprised that RIP CURL wet suits arnt flying off the racks or better yet get a measured suit.

[winner69]

with the late Indian summer surprised that RIP CURL wet suits arnt flying off the racks or better yet get a measured suit.

Jeez walyz --- you gave me a fright .... I read that post too quick and thought Rip Curl had gone bust .... like Rest in Peace RIP

[Waltzing]

well some RIP CURL wet suit's in the surf last week.

someone is still buying them..

better go and get a new one and support retail..

with the BUG everywhere the beach is the best place for the next 12 months or more...

[Balance]

Interesting price action on HLG - now why would anyone put 100,000 shares on the sell side at $5.80?

[850man]

Interesting price action on HLG - now why would anyone put 100,000 shares on the sell side at $5.80?

and now it's gone.... but very strange to do when HLG is very lightly traded

[Balance]

and now it's gone.... but very strange to do when HLG is very lightly traded

Unless the seller knows that there is a big buyer out there?

Bizarre!

[nztx]

Interesting price action on HLG - now why would anyone put 100,000 shares on the sell side at $5.80?


I'm sure they were just testing to see if a green light came up here for a large tasty bite :)

[clearasmud]

I'm sure they were just testing to see if a green light came up here for a large tasty bite :)
Should have been $5.70.

[clearasmud]

I'm sure they were just testing to see if a green light came up here for a large tasty bite :)
Should have been $5.70.
Probably hates that the dividend is semi-unimputed. Lol.

[see weed]

Someone sells 1044 shares and pushes sp down 10c. Talk about a div trap. All it needs now is for someone to sell another 4472 and push sp down to $4.50:mellow:

[Waltzing]

5.30 is the next level support

but really who cares about this stock today.. no news

it's all WHS today

where is MR B!!!

[winner69]

Hey waltzing me old mate

Got the big sheets of paper and crayons out again to look at the HLG chart going back to last century

Still see 7/8 year cyclical low coming up..... sometime later this year .... maybe early last year after another not so good update after Christmas ..... low could be around $3.50 / $4.00 level (using thick crayons)

At $4.00 that's a PE of about 12 .....hmmm

All seems to tie in

Be pretty sad for some even if I'm only half right

Added the last mnths activity waltz

Still heading to $3.50 / $4.00 according to the crayon lines

[Rawz]

Going to $10. But $4 first

[couta1]

Going to $10. But $4 first Now where have we heard that bark before I wonder, good buying at $4 or under otherwise yeah-nah.

[850man]

Added the last mnths activity waltz

Still heading to $3.50 / $4.00 according to the crayon lines

Went back to $3.30 in Sept 2020. Difficult times for those of us with a decent holding, coping with a big red number. Hopeful solace in a good balance sheet and we run company.

[oldtech]

Went back to $3.30 in Sept 2020. Difficult times for those of us with a decent holding, coping with a big red number. Hopeful solace in a good balance sheet and we run company.

Yep, HLG makes up 26% of my portfolio and <gulp> just checked out how much I am down currently. Ouch ...

Luckily I don't need the money that I have invested here, so will be riding this out.

[Baa_Baa]

The rounding top on the monthly log scale char (https://invst.ly/y4mgu)t seems to still be in play.

[Beagle]

...On the TA front I see the recovery in late March and into early April bounced off the declining 100 day MA trendline and failed to break above it so the downtrend is intact. It also broke down through the 30 day moving average shortly afterwards adding emphasis to the downtrend continuing at least for the short term.

Fundamentally, I see it making $19-20m this year for about 33 cps so its on a forward PE of 18 which is close to a record for HLG, albeit, probably on trough year earnings.

I don't see what the catalyst is for this to break out of its downtrend anytime soon ?

In the long term I think its a great stock but I think shareholders can probably expect some more short term pain in the months to come. Maybe shareholders can hope it tracks sideways for a while but its a long time until the next dividend in December.

Not much to add to this, my most recent substantive post on HLG on 23 April other than to note a few extra things
1. The $N.Z. has fallen a lot since then.
2. The previous support at $5.75 has been well and truly broken
3. From a TA point of view the downtrend since the mid $7's is well and truly intact and you'd be very brave to get in front of that without any fresh news or the start of a new uptrend.

I'm not expecting any news for several months and as noted above I am only expecting eps of 33 cps. Put an average PE in recent years of 13 on that and its only comes to $4.29 :eek2:

Hope shareholders are well and truly well rugged-up because it looks like a long cold winter ahead.
Disc: As disclosed previously I completed the exit of my position in the late $6 range.

[Waltzing]

"Still heading to $3.50 / $4.00 according to the crayon lines"

you guys are legends....:t_up:

[winner69]

The rounding top on the monthly log scale char (https://invst.ly/y4mgu)t seems to still be in play.

Cool chart BaaBaa

Graphically / artistically love that curve you’ve drawn

[BlackPeter]

The rounding top on the monthly log scale char (https://invst.ly/y4mgu)t seems to still be in play.

So .. target around $3.50? Sounds reasonable to me ... might add it to the watch-to-buy-list.

[850man]

been really taking a tumble these last few days albeit with very light trading. No real support level evident. Be interesting where this bottoms out 13824

[bull....]

when looking at previous up/down cycles in the stock price $3 has worked before. but who knows this time so different

[see weed]

There seems to be a bit of support at 5 to 5.20. Putting mine in the bottom draw for a while. They should come back September-October ready for next div.

[850man]

There seems to be a bit of support at 5 to 5.20. Putting mine in the bottom draw for a while. They should come back September-October ready for next div.

yes I should probably stop watching this as the red number is growing. I'll take advice from Couta and have a cup of tea while I ride it out

[see weed]

yes I should probably stop watching this as the red number is growing. I'll take advice from Couta and have a cup of tea while I ride it out
If it makes you feel better my HLG are down about 45k at the moment but not to worried about it. When it turns, will probably top up and buy another sh.t load and push sp back up to where ever:).

[Waltzing]

next big support is 4.80 and down to 4.30... should see it bottom out in that range worst case.

[Beau]

next big support is 4.80 and down to 4.30... should see it bottom out in that range worst case.
Thanks for letting a lot of us know when various companies will be in the range of hitting the bottom in future it is very comforting to read.

[couta1]

Thanks for letting a lot of us know when various companies will be in the range of hitting the bottom in future it is very comforting to read. Yeah one of his rare posts you can actually understand.

[Balance]

next big support is 4.80 and down to 4.30... should see it bottom out in that range worst case.

The faster, the better.

Bring it on!!!!

[Beagle]

A mere buy order for just 2,500 shares at the target price of $4.30 would be the largest buy order on the market. WOW...what have we got here, a buyers strike ? One thing is for sure, I just brought up a 1 year graph and the speed of the decline is increasing and the graph looks UGLY !
You'd be a "brave" punter to stand in front of that train going downhill.

[Waltzing]

Look its in the charts people , its in the charts just ask Winner(n)....

Leaves blowing in the wind .....

Scope some autumn leaves up and throw them to the wind ....

Its in a downward trend any blind fool can see that until some good news arrives..

The imputation credits arnt there to hold her up.

[Balance]

Look its in the charts people , its in the charts just ask Winner(n)....

Leaves blowing in the wind .....

Scope some autumn leaves up and throw them to the wind ....

Its in a downward trend any blind fool can see that until some good news arrives..

The answer is blowing in the wind.

[Waltzing]

Yes balance ... perfect ...

https://www.youtube.com/watch?v=MMFj8uDubsE

[Beagle]

Can't bring myself to find any love for HLG at present so I have to "Go my own way"
https://www.youtube.com/watch?v=p8Ojjn35kP8

Look at the depth of feeling / emotion and skill in that performance !!

[nztx]

$5.25 SP showing now - what spare trucks are about, should the 5 or better get bowled over ;)

[Waltzing]

HLG does go its own way and has always done so...

Take good look back at its 20 year chart and follow its highs and lows ...

Shes a come back performer ....

the 2004 -07 period saw a very long period of SP strength. Looks like half of the sell off's after were actually triggered by global macro events.

Need to take notes but who has time.


FWM ...
Got the CD somewhere ...

[clearasmud]

50% retrace, more to go.

[nztx]

Ouch .. fortunately mostly decamped out of this one for now :)

[see weed]

A mere buy order for just 2,500 shares at the target price of $4.30 would be the largest buy order on the market. WOW...what have we got here, a buyers strike ? One thing is for sure, I just brought up a 1 year graph and the speed of the decline is increasing and the graph looks UGLY !
You'd be a "brave" punter to stand in front of that train going downhill.
Looks like first large buy order for a while. It may not get to 4.30 if more buys come on.

[nztx]

Perhaps I might decamp out of what's left - wonder if that might help things for a 4.25 ? ;)

[see weed]

Perhaps I might decamp out of what's left - wonder if that might help things for a 4.25 ? ;)
Yeah, they gone. Did you manage to decamp in time?

[nztx]

Yeah, they gone. Did you manage to decamp in time?


The paper loss carried has been well & truly covered and then some elsewhere today, so not worried :)

I'll ride the boomerang on this one later :)

[see weed]

Poor old knocked around Hally Glass, having a little breather for last couple of days. It is very hard picking Hally Glasses bottom. But have noticed a few punters sniffing around lately at $5.20ish. I wonder if it is the real bottom.:) Have a good weekend everybotty.

[clearasmud]

Are they pulling out of Hallensteins in Australia?
Only the wholesale outlet in Harbourtown, Southport appears to be open.

[winner69]

Are they pulling out of Hallensteins in Australia?
Only the wholesale outlet in Harbourtown, Southport appears to be open.

Wouldn’t surprise me ……with NZ to follow in due course maybe …a dog of a business


Is that why the Hallensteins boss left a month or so ago?

[clearasmud]

Yes of course. Is the new Hallenstein manager just temporary or is he the turn around specialist?

[nztx]

Five dollar 15 .. give us some more :)

[see weed]

Five dollar 15 .. give us some more :)
There is a few at 5.17c you could sell into. IMHO I do not think sp will get down to the $4.30s with the big 8%+ div, but if it does I will certainly be buying in at that level from 4.30 to 5.10.

[see weed]

Wow, more buyers than sellers for a change.

[winner69]

HLG still on forward looking PE of about 16

Still a bit rich

[clearasmud]

HLG still on forward looking PE of about 16

Still a bit rich
Don't you mean 10 to 12.

[winner69]

Don't you mean 10 to 12.

On $20m expected F22 earnings I get about 16

A PÉ of 10 implies $30m profit ….no way is that going to happen

[nztx]

On $20m expected F22 earnings I get about 16

A PÉ of 10 implies $30m profit ….no way is that going to happen


unless they 'pull one out of the bag' ;)

[clearasmud]

unless they 'pull one out of the bag' ;)
Lets hope they do!
$18m profit is possible, Winner is expecting 8.

[nztx]

Lets hope they do!
$18m profit is possible, Winner is expecting 8.

Gee hope so .. sub 5.00 would be nice thank you :)

[Rawz]

HLG still on forward looking PE of about 16

Still a bit rich

The trick is to value Glassons Aus on a really high PE. Take your pick but you got to have a 2 in front of it :eek2:

[winner69]

The trick is to value Glassons Aus on a really high PE. Take your pick but you got to have a 2 in front of it :eek2:

Glassons AU at PE of 20 is $4.30 - rest of business at 10 is $1.10 so you'd say $5.40is about right

But PE of 20 is outrageously high for a business where profits are going backwards .... and even post covid not growing to grow at a rate deserving a PE of 20

[winner69]

Aussies buying clothes big time

ABS Retail Sales for April

April sales 16% up on last year, Annual sales to April up 8% on pcp and 10% higher than pre-covid times

HLG H2 period so far (Feb/April) sales up 16% ..... Glassons AU should be up more ..... might need to revise my H2 profit expectations upwards

[Balance]

aussies buying clothes big time

abs retail sales for april

april sales 16% up on last year, annual sales to april up 8% on pcp and 10% higher than pre-covid times

hlg h2 period so far (feb/april) sales up 16% ..... Glassons au should be up more ..... Might need to revise my h2 profit expectations upwards

buy! Buy! Buy!

[see weed]

The paper loss carried has been well & truly covered and then some elsewhere today, so not worried :)

I'll ride the boomerang on this one later :)
Looks like your boomerang is coming back in last couple days. I got a few at 5.15 and 5.21, got sick of waiting for $4.30c:t_up:.

[Waltzing]

back to 5.80

Back to 4.30 to 4.80 will be if the aussie's put away their cards..

as per winner(n) article on the aussies just window shopping..

[dreamcatcher]

Large numbers traded today similar to 17th Feb 2022

[Jay]

Went past Hallensteins at St Lukes today - about 12 noonish may be slightly before, had 1 customer, Glassons seemed to have a few more.
Car park was getting full, but I think that may have been due to the lower entry entrance/car park closed as doing some work around there. Mall itself was not overly crowded.

[smbunn]

Bought another large load at $5.19 on the 24th. Pretty happy they are back at $6 already

[winner69]

Hallensteins might do well when these come back into fashion

[Muse]

Hallensteins might do well when these come back into fashion

LOL, yes, no doubt

One of those has to be Bull. Short shorts at work, stubbies at home. Amiright?

[Waltzing]

followed by ...

https://www.facebook.com/KiwiGrubBox/videos/lp-stubbies-tv-advert-iconic-nz-lemon-paeroa-soda-kiwigrubbox/1118471748336359/

[Muse]

Trading update from ASX listed Universal Store, which has some interesting read through's for Glassons Australia. attached with the trading update a very brief investor presentation from last week.

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02531842-2A1379285?access_token=83ff96335c2d45a094df02a206a 39ff4

Otherwise a solid update and roughly in line with consensus, Universal (& indeed most of AU retail) has gotten absolutely hammered and down 48% YTD 2022. Although to be fair, AU retail has always tended to trade at higher multiples than NZ, for various reasons, so I guess can fall a bit more when rates rise.

It's quite a good company - nice margins, coherent plan, good cashflows and net cash position.

Relevant to Glassons as majority of customers are women, and whilst they sell a range of branded products, the growth engine of the business are its private labels and specifically newly launched Perfect Strangers brand. Customer demographic similar ("on-trend apparel products to a target 16-35 year old fashion focused customer). Products similar but I'd put Glassons more in the fast fashion & discount section (competiting against supre, zara, revolve, forever21, boohoo) vs Mid-Range for Perfect Stranger & Universals other brands (competing against glue, shopo, unaway, meshri, edge etc).

anyway update has some of mgmt's perspectives on how the trading environment for the period to june has been reasonable all things considered which is a readthru for glassons.

The minimum wage increase of +5% (announced last week) is a bit of a worry and things are across the ditch seem to be catching up to NZ quick.

I dont have any shares in either glassons or Universal store but both on my watchlist when capitulation occurs.

Universal, with a june year end and substantially now complete, trading on a last 12 month PE of 12.2x, and next 12 month PE of 9.0x. Dividend yield not too bad either but we cant use the franking credits. Dont think the consensus for next year is a valid baseline but its an interesting one to watch from a HLG perspective, or on its own.

[winner69]

Retail Sales for May ex Australia Stats

Clothing sector still on fire

May sales up 14% on last year. Last 4 months (HLG H2 so far) sector sales up 15% on last year

So Glassons AU sales booming --- for H2 maybe +20% being market growth plus more share gains

Even if NZ still struggling HLG group H2 sales will be very very good

Winner has RAISED his F22 profit forecast to $28m/$30m

Seems HLG need to make an announcement to the market soon

Nice chart shows how the market Glassons AU are in is on fire ...Aussies buying clothes big time

[Sideshow Bob]

Hallenstein Brothers CEO Appointment - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/395133)

Hallenstein Glasson is delighted to announce the appointment of Rob Brown as Hallenstein Brothers CEO.
Rob is an accomplished leader with over 20 years’ experience in a uniquely diverse fashion retail background spanning across strategic planning, brand management and customer service. Rob has been a Brand Manager at True Alliance since 2009, most recently with full accountability for the Ben Shermin brand. During this time Rob has had oversight across product sourcing, buying, design, marketing, wholesale and retail sales, brand positioning and organizational development.
Rob’s mandate is the ongoing development of the strong and capable executive team, whilst continuing to build upon the strategic initiatives within the business.
Rob’s appointment is effective 17th October 2022.

[Rawz]

Interesting that Rob's mandate starts with development of the exec team...

Must not be strong and capable. Just put those words in there as a false complement

[winner69]

Aust retail sales ex ABS for June month

Clothing, footwear and personal accessory retailing rose 1.3% ($36.2m) in June, in seasonally adjusted terms.

And 27% higher than June last year …wow 27% up

Good for Glassons AU

[Muse]

Aust retail sales ex ABS for June month

Clothing, footwear and personal accessory retailing rose 1.3% ($36.2m) in June, in seasonally adjusted terms.

And 27% higher than June last year …wow 27% up

Good for Glassons AU

whats your updated guesstimate for FY22 NPAT? Or even better, FY23?

Oddly enough for this moose I wound up dipping my hooves into Universal Store at A$3.50 following my post above (#8383), as thought on a risk adjusted basis was a good time to start DCA in. Now up ~35% but only bought around a third of the # of shares I ultimately wanted to acquire. Remain conservative/skeptical on the outlook for retail over the next 2yrs but thought that was a decent entry. The trick here for a long term investor is trying to recall the various covid closures at passed points in time...IE, 1H FY23 for most aussie retailers (or anyone exposed to covid closures) should show strong comps on FY22 given that was when some of the worst closures were. So market could rebound after posting some strong figures before the 2H reality sets in. Traders should enjoy that dynamic. Very difficult to remain patient/disciplined when markets rally. Often time what we think ought to happen, doesn't happen, for periods of time (or ever).

[winner69]

Glassons AU must be creaming it --- gaining market share in a booming market

Looks like aussie consumers are spending like crazy - not just on clothes

Maybe $30m NPAT on cards FM

[winner69]

July last year Glassons had about 668,000 followers on Instagram

Currently that number is 702,000

Wow, big increase — should see market share growth and solid sales growth (particularly in Aust)

See what they are up to

https://instagram.com/glassons?igshid=YmMyMTA2M2Y=

[winner69]

Stats NZ Card Spend July month

Apparel sales down 3.0% on Juy last year. Sales last 12 months 9.0% on pcp

HLG second half is Feb/July period -- Card sales down 5% on pcp in this period - probably an indication of how NZ sales have gone

I find this an interesting chart re NZ retail activity - much different from the Australia view

[winner69]

Retail Sales for May ex Australia Stats

Clothing sector still on fire

May sales up 14% on last year. Last 4 months (HLG H2 so far) sector sales up 15% on last year

So Glassons AU sales booming --- for H2 maybe +20% being market growth plus more share gains

Even if NZ still struggling HLG group H2 sales will be very very good

Winner has RAISED his F22 profit forecast to $28m/$30m

Seems HLG need to make an announcement to the market soon

Nice chart shows how the market Glassons AU are in is on fire ...Aussies buying clothes big time

I got a bit carried away a while ago with that forecast but HLG ending up 24m to 25m is a pretty solid effort

Been a good second half

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/HLG/397702/377682.pdf

[Biscuit]

I got a bit carried away a while ago with that forecast but HLG ending up 24m to 25m is a pretty solid effort

Been a good second half

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/HLG/397702/377682.pdf

Still down nearly 30% on last year, so not that solid.

[LaserEyeKiwi]

I got a bit carried away a while ago with that forecast but HLG ending up 24m to 25m is a pretty solid effort

Been a good second half

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/HLG/397702/377682.pdf

Yup, revenue up 6.6% year on year for the last 6 months - not too shabby. They have an easy compare for the next 6 months given what happened last year, so trailing 12 month earnings will look pretty much back to normal 6 months from now (“Normal” as in not impacted from covid closures etc).

[winner69]

Margins / expenses must be under pressure

2nd half sales up $11.8m (6.6% they say) on pcp but profit down $0.5m

"nd half result does signal a better F23 .... that's good

[Rawz]

I still don’t understand why this is trading on such a high multiple compared to the other retailers?? Never have. Beagle use to say the potential of Aussie… hmmm

Anyways this was all expected. They said after last years results that this year would be a dud. And a few of us sold on the back of that commentary

[winner69]

Looks like HLG have come out of the pandemic problems sales wise OK ..... annual sales higher than pre-covid trend suggested they might be at this time

[Rawz]

W69 we can expect HLG sales to fall back to trend over time ay

[winner69]

W69 we can expect HLG sales to fall back to trend over time ay

Could do but last few months of F22 being up so much is a sign that current growth is higher than pre-covid .... the Glassons AU effect?

Aussie market still doing quite well ..... but NZ has always been a dog for HLG

[Waltzing]

Is there still legs to the stimulus in AUS. What is inflation doing in AUS.

Winner is bang on the money that AUS is the key to HLG and perhaps a vibrant AUS will flow over into NZ tourism.

FLT is seeing a big boast last Q in travel.

Preso of FLT out yesterday... big read with lots of numbers ...

PowerPoint Presentation (iress.com.au) (http://research.iress.com.au/IDS/old/20220825/02557834.pdf?uid=99B527433D55B4E4CD94770A3D14FCC2A E2A00003D15988510E0E540093D250091850000&ppv=)

[850man]

Margins / expenses must be under pressure

2nd half sales up $11.8m (6.6% they say) on pcp but profit down $0.5m

"nd half result does signal a better F23 .... that's good

I would imagine that they have been hit by increased wages costs, transport costs, compliance costs and worst of all by the 4 month lockdown this time last year. All things considered a good outcome. Aussie should be ripping ahead being in a better economic state than NZ, summer around the corner with a host of summer apparel sales. Feels very positive for next FY if the ship stays it's course.

[nztx]

I would imagine that they have been hit by increased wages costs, transport costs, compliance costs and worst of all by the 4 month lockdown this time last year. All things considered a good outcome. Aussie should be ripping ahead being in a better economic state than NZ, summer around the corner with a host of summer apparel sales. Feels very positive for next FY if the ship stays it's course.


I'm reading HLG the same way

[BlackPeter]

I still don’t understand why this is trading on such a high multiple compared to the other retailers?? Never have. Beagle use to say the potential of Aussie… hmmm

Anyways this was all expected. They said after last years results that this year would be a dud. And a few of us sold on the back of that commentary

Funny - just compared them to Kathmandu and to the Warehouse (I know, a sacrilege, but hey):

HLG Forward PE (3 yrs): 10.6, average PE (10yrs back): 15.3
KMD Forward PE (3 yrs): 10.9, average PE (10yrs back): 7.1
WHS Forward PE (3 yrs): 10.7, average PE (10yrs back):15.6

Now - obviously, KMD used to have better times (i.e. lower backward PE), but if I compare the forward PE I don't see a big difference between the market pricing of these three retailers. What do I miss?

[Biscuit]

I'm reading HLG the same way

And yet we are supposed to be stamping out inflation by damping down consumer spending? Not disagreeing with the positive view, just seems there is some inconsistencies in the narratives.

[Maverick]

The thing that stands out for me with HLG is they have obviously had a paradigm shift in ambition a few years back.

Its seems pretty clear they have saturated NZ and now got their sights on Aussy growth. They've had their toes in over there , to their credit to work out the game for a while now, but recently pulled the trigger to go hard.

They have taken on a decent chunk of debt to do it. HLG have never had debt so this change in policy is significant.

I loved the simplicity and long history of their business. They were easy to work out with pretty well only hot/ cold seasons and good/ bad fashion choices to factor in. But know we have this Aussy expansion funded by debt and I see it as a real risk. Apparel is just HARD!

They have NZ sown up really well and when so many thought expanding to a market 5x larger was a great idea , I was out. "Small and neat" in our little country worked well but we all now of the beatings many of our companies have taken when we go to a bigger pond.

I also think RBD has done exactly the same thing (and with a massive debt) after really cracking the NZ market so well. I've loved both of these NZ stories but wouldn't touch either of them now.

[nztx]

Which one of the three has been most consistent in dividends ?

Which one of the three has had to do a huge Recapitalisation to rescue things ?

Which one of the three has had a fairly large holder depart and sell down ?

Which of the three operate in one of the most volatile sectors where there has been wholesale carnage
at retail level and has come out least unscathed with consistency ?

[Rawz]

Funny - just compared them to Kathmandu and to the Warehouse (I know, a sacrilege, but hey):

Company Forward PE (3 yrs) average PE (10yrs)
HLG 10.6 15.3
KMD 10.9 7.1
WHS 10.7 15.6

Now - obviously, KMD used to have better times (i.e. lower backward PE), but if I compare the forward PE I don't see a big difference between the market pricing of these three retailers. What do I miss?

Thanks BP, now it makes sense to me. Those forward PEs line up beautifully!! The only problem about the forward PEs is its all guess work ay. Just a big prediction. And prediction is very difficult, especially about the future

[winner69]

Mav - last HLG Balance Sheet (Jan 2022) showed no debt ... just $33m in cash

[nztx]

Mav - last HLG Balance Sheet (Jan 2022) showed no debt ... just $33m in cash


Yes .. think so winner - didn't recollect HLG having borrowings

When was the last time HLG issued any new shares ?

[LaserEyeKiwi]

The thing that stands out for me with HLG is they have obviously had a paradigm shift in ambition a few years back.

Its seems pretty clear they have saturated NZ and now got their sights on Aussy growth. They've had their toes in over there , to their credit to work out the game for a while now, but recently pulled the trigger to go hard.

They have taken on a decent chunk of debt to do it. HLG have never had debt so this change in policy is significant.

I loved the simplicity and long history of their business. They were easy to work out with pretty well only hot/ cold seasons and good/ bad fashion choices to factor in. But know we have this Aussy expansion funded by debt and I see it as a real risk. Apparel is just HARD!

They have NZ sown up really well and when so many thought expanding to a market 5x larger was a great idea , I was out. "Small and neat" in our little country worked well but we all now of the beatings many of our companies have taken when we go to a bigger pond.

I also think RBD has done exactly the same thing (and with a massive debt) after really cracking the NZ market so well. I've loved both of these NZ stories but wouldn't touch either of them now.

HLG has zero debt.

[nztx]

Maybe the hazy crazy world of the Beancounter's cloudy treatment of imagined Lease liabilities are confusing issues ? ;)

[BlackPeter]

Thanks BP, now it makes sense to me. Those forward PEs line up beautifully!! The only problem about the forward PEs is its all guess work ay. Just a big prediction. And prediction is very difficult, especially about the future

Absolutely, but lets face it - all we are doing as investors is trying to predict the future, whether we want to do that or not.

We try to predict it based on our observations of the past and added in some guesses (either our own or from others).

Even the people who just drive looking into the backmirror only "predict" that the future looks like the past ... just another guess - sometimes right and often wrong.

[Maverick]

well bugger me Winner...ASB says no debt to FY2020 then suddenly $59m and $54m since.

On reading HLG report , I see they have $45m of non current liabilities at the HY and are calling it "lease liabilities".

So do you think this is an accounting change to go from "0" debt before that to this ( I recall some change in rules to do with leases but dont know the ins and outs).

If that's the case , I'm completely wrong and if HLG are indeed expanding into Aussy without debt then I reverse my negative rating on HLG. Its just the sudden appearance 2 years ago that was striking.- I`ll have to recheck RBD in light of your response too.

[Rawz]

Maybe the hazy crazy world of the Beancounter's cloudy treatment of imagined Lease liabilities are confusing issues ? ;)
Yes this is probably it. It would be handy if some publications would split this fake debt out. Like ASBs Morningstar reports.

[850man]

All apparel retailers in NZ and Oz are being hit by the same things, question is, which are best placed to handle those things and will get through them the best. HLG have a pretty good track record in that regard and their nil debt position has got to help.

[Maverick]

I appreciate you guys for pointing that out. I've been carrying this misconception for a while now. The beauty of Share trader right here, thanks.

[LaserEyeKiwi]

I appreciate you guys for pointing that out. I've been carrying this misconception for a while now. The beauty of Share trader right here, thanks.

I truly hate the new accounting standards that brought in the requirements to change the way leases are shown. It complicates things needlessly for a lot of companies balance sheet deciphering.

[winner69]

I truly hate the new accounting standards that brought in the requirements to change the way leases are shown. It complicates things needlessly for a lot of companies balance sheet deciphering.

And for those companies that use ebitda you leave the lease/rent payments out .... and operating cash flows look awesome

What'sone of retails biggest expenses now?

[winner69]

Market doesn't seem to have liked that profit guidance he other day ---- down nearly 10% since

[850man]

Market doesn't seem to have liked that profit guidance he other day ---- down nearly 10% since

Very lightly traded stock. May depend what they do about the divvy in the results announcement.

[clearasmud]

Very lightly traded stock. May depend what they do about the divvy in the results announcement.
Don't see any reason why they can't pay 22c.
I'm picking 22c

[winner69]

Wow - look at the red line on this chart

It's how clothing sector retail sales are going in OZ (from ABS Retail data)

August month sales were up 83% on last year (following the 51% increase in July). No doubt partly due to lockdowns last year

Must be a great start to the F23 year for Glassons AU

Overall no signs of distress in OZ retail in spite of rate increases etc etc

[winner69]

Be interesting to hear what they say about the start of the FY23 year

'Sales for the first seven weeks are X% ahead of same period last year'

The X could be as high as 50%

Will that stop the share price collapsing further

[Perky]

Will that stop the share price collapsing further[/QUOTE]

No Mr Winner it wont.
Your chart showing what happened…we want to know where that chart be in 6 months time.
Retail out of favour with a few headwinds on horizon. Exchange rate no good for purchases, Australia market probably 6 mths-9 months behind what’s happening in nz, they got more interest rises and more house price depreciation to come as discretionary money slowly gets sucked out system.

I think this share price will continue to cycle down.

Do you own this one?

I used to hold but sold out a bit too early when it went to the moon a year or so back.

I would happily buy back in at same stage but I’m trying to be patient on this one.

[Perky]

Maybe we know a bit more tomorrow?

A full announcement with financial statements including a dividend
declaration will be released to the market on 30 September 2022.

[Getty]

Thanks for posting that informative graph winner.

Readers will see it from their own outlook.

I see an unsustainable last hurrah before a 1929 style depression.

Others may just see catch up from covid store closures.

[Rawz]

I've always said this was trading on a much too high P.E for a clothing retailer. No moat. Fashion is fickle.

I remember Beagle trying to tell me it was worth 10 bucks a share and the Aus business should have a p/e in the 20s. I never brought into that.

But like most will be keen for a big feed if the sp goes outrageously low

[winner69]

I've always said this was trading on a much too high P.E for a clothing retailer. No moat. Fashion is fickle.

I remember Beagle trying to tell me it was worth 10 bucks a share and the Aus business should have a p/e in the 20s. I never brought into that.

But like most will be keen for a big feed if the sp goes outrageously low

If HLG is like it past cyclical behaviour then a bottom around $3.80 / $4.20 is possible

Would that be outrageously low Rawz

But if we get a 1929 style depression than $2.00 could happen

[Getty]

Regardless of it's future, I think we can say that HLG has been a well managed and adaptive company.

It has served me well over the years, turboed by some trading opportunities.

[winner69]

Regardless of it's future, I think we can say that HLG has been a well managed and adaptive company.

It has served me well over the years, turboed by some trading opportunities.

One of my favourites over the years as Getty

And they’ll probably be around in another 100 years

[Rawz]

If HLG is like it past cyclical behaviour then a bottom around $3.80 / $4.20 is possible

Would that be outrageously low Rawz

But if we get a 1929 style depression than $2.00 could happen

$4 before $10, was my motto.

Only way we see $2 is if HLG buy wrong one season and have to dump unfashionable clothes- thus turning in a bad half year. Has happened before! But doubt it will now, HLG management too savvy now

[winner69]

Jeez, Glassons AU profit $19m while rest of Group manage $6m between them. What a star

First 8 weeks FY23 sales up 68% on pcp --- good start to year

Divie 24 cents bringing full year to 42 cents ..... that's pretty good

Should see share price recover

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/HLG/399699/380108.pdf

[bull....]

nz sales down due to covid but wow margins terrible ... might be in loss next report ?
lucky aus held it together but for how long ?
margins obviously under pressure just like whs say the other day. and looks like it get worse with no end in site for USD appreciation and inflationary costs to continue as they say in there report

stick my neck out and say the stock price will follow historical norms of trading between 3 - 5.50 roughly with spurt each side

[Rawz]

Muted response in the SP. Tough gig when NZ is doing so bad but Aus so good. People perhaps a bit confused.

The outlook doesnt really help. Maybe best to wait until December update, not far away

Future Outlook The first eight weeks of the new financial year have seen Group sales improve by +68.49% on the prior year. Last year there were multiple store closures for much of the 8 week period across Australia and New Zealand due to lockdowns, so the percentage increase is not directly comparable. The Group is looking forward to a year of comparably minimal Covid interruptions and refocusing on its key strategies of quality on‐trend product, speed to market, customer service and investment in digital. However, there remains margin pressure caused by the USD exchange rate and the higher than normal freight costs. There have also been increases in operating costs due to inflationary pressure. The Group is now focused on ensuring our performance for the key peak trading months ahead. A further update will be provided at the Annual Meeting of Shareholders in December 2022.

[Filthy]

However, there remains margin pressure caused by the USD exchange rate and the higher than normal freight costs. There have also been increases in operating costs due to inflationary pressure. The Group is now focused on ensuring our performance for the key peak trading months ahead.

plus all those young (target market) underwater first home buyers who will have to focus on their increasing repayments rather than being able to buy new clothes. reckon sales will tread water or drop in the coming few years. divi strip might be a bit risky this time round

[Balance]

And quietly HLG powers higher - now $5.40.

[Waltzing]

Greats posts from the DOYAN's of market blogging Winner() and MR B for crunching the performance prospects of HLG going forward.

[nztx]

Jeez, Glassons AU profit $19m while rest of Group manage $6m between them. What a star

First 8 weeks FY23 sales up 68% on pcp --- good start to year

Divie 24 cents bringing full year to 42 cents ..... that's pretty good

Should see share price recover

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/HLG/399699/380108.pdf


but not much Kiwi Tax being paid = little or no Imputation credits available.

As much as I like HLG, on a FY basis that equates to a fair part of a further reduced Gross Dividend
without Imputation credits attachments.. ie the 33% DWT gets deducted before you see the distribution

In hardening domestic times with interest rates creeping up, a rough 9% gross dividend inspires
a look elsewhere, where there a plenty of choices for a well timed 20%+ gain for the right analysis
and entry timing, with probably more to follow.. ;)

The concern with NZX companies in particular those paying better dividends is the large SP dip
after shedding payouts, Why take the good dividends only to fall back on Capital account
sinking into red ink in times of headwinds ? The Tax Dept appear to be the only winners scoring
their 33% only to see SP sag shortly after going Ex, awaiting an ever hopeful longhaul SP recovery :)

[Recaster]

At bit of a look at this company:

https://recastinvestor.substack.com/p/update-hallenstein-glasson-holdings-788

[Waltzing]

removed....

[winner69]

At bit of a look at this company:

https://recastinvestor.substack.com/p/update-hallenstein-glasson-holdings-788
Question

If you include Dividends in Operating Cash Flow why don’t you also include the Lease Liabilities that are reported in Financial Cash Flows ….after all they are essentially rents paid as part of day to day operations

You like the word collapse eh

[Rawz]

At bit of a look at this company:

https://recastinvestor.substack.com/p/update-hallenstein-glasson-holdings-788
Thanks Recaster, a good read

[BlackPeter]

At bit of a look at this company:

https://recastinvestor.substack.com/p/update-hallenstein-glasson-holdings-788

Personally I think that you would need a time window of more than two years to provide any meaningful trend and analysis (particularly for) a cyclical like HLG. You have some nice words for the company (sure, not undeserved), but not sure how to form this judgement based only on the 2020 to (not yet) 2022 reports.

Not sure either whether your recommendation to reduce dividends and to put the money instead into growing Glasson AUS can be justified based on the analysis you provide. Putting more fuel into a straw fire does not generate sustainable heat. How do you know (based on your analysis) that Glasson AUS is not currently peaking?

[percy]

At bit of a look at this company:

https://recastinvestor.substack.com/p/update-hallenstein-glasson-holdings-788

Thanks for sharing your excellent research.
Yes plenty of growth still to come from Australia,not only from increasing store numbers,but also from their online channel.

[nztx]

Thanks Recaster..

but I'm intrigued as to how all those lost retail days will translate into future comparable
trading periods where less days lost.

Sure economic conditions have changed, interest rates, competition, exchange rates, supply chain, freights
and inflation all added in.

I would believe that there remains further upside possible, and HLG are specialists in their
game with long history of delivering.

The last published accounts continues to demonstrate the precise footwork and resilience of HLG

[winner69]

Thanks Recaster..

but I'm intrigued as to how all those lost retail days will translate into future comparable
trading periods where less days lost.

Sure economic conditions have changed, interest rates, competition, exchange rates, supply chain, freights
and inflation all added in.

I would believe that there remains further upside possible, and HLG are specialists in their
game with long history of delivering.

The last published accounts continues to demonstrate the precise footwork and resilience of HLG

Boomer of a start to the year - first 8 weeks sales up 68% on last year - last year had all those retail days in this period - and its 68% up on sales which no doubt would have included a lot of online sales

That 68% increase in sales has about a $15m favourable profit impact - pretty good boost to profits (v last year) eh

[Recaster]

Question

If you include Dividends in Operating Cash Flow why don’t you also include the Lease Liabilities that are reported in Financial Cash Flows ….after all they are essentially rents paid as part of day to day operations

You like the word collapse eh

I could be wrong (often am :-)) but my reading of Note 4.1 bottom of page 17 of the financial statements is that the lease liabilities in the financing cash flow are a capital item; "payment for lease liabilities principal ..." [$23.762m]

I therefore concluded that rentals were already included in operational payments.

Yes, 'collapse' is my go-to word, lol!

Cheers.

[Snow Leopard]

I could be wrong (often am :-)) but my reading of Note 4.1 bottom of page 17 of the financial statements is that the lease liabilities in the financing cash flow are a capital item; "payment for lease liabilities principal ..." [$23.762m]

I therefore concluded that rentals were already included in operational payments....

I suggest you find a few texts on IFRS16 and how the accountants of the world like to obfuscate things.

[Recaster]

I suggest you find a few texts on IFRS16 and how the accountants of the world like to obfuscate things.

Yep, looks as though I made a mess of that. Quite complicated.

As far as I can see from Note 4.1 there are two components in lease liability payments in the cash flow statement; interest for the period and lease payments made.

Adding these two together equals the lease payments under financing in the cash flow statement in both 2021 and 2022.

They should be in operations not financing IMHO.

Thanks for pointing that out and do you agree?

[Rawz]

Lease liabilities are so dumb

[percy]

Lease liabilities are so dumb

I have brought up SCY thread.
This reminds me why watching lease liabilities is so important .

[Snoopy]

Yep, looks as though I made a mess of that.


Not necessarily



Quite complicated.


You are right about that



As far as I can see from Note 4.1 there are two components in lease liability payments in the cash flow statement; interest for the period and lease payments made.

Adding these two together equals the lease payments under financing in the cash flow statement in both 2021 and 2022.

They should be in operations not financing IMHO.

Thanks for pointing that out and do you agree?


Yes the big change with IFRS16 is that what was an ordinary business expense (rent) becomes (mostly) a finance expense and gets subsumed in the interest payment bill. As you have noted, however, it is not a straight 1:1 swap where what was formerly 'rent' all becomes 'one other thing'.

The rationale behind IFRS16 was because someone high up in the accounting profession in the US decided it wasn't transparent for a company to hide critical operational assets (in the case of HLG they require stores to sell their clothing from) off their balance sheets. In the case of HLG they superficially had 'no debt'. But that didn't include the millions of dollars in future lease commitments signed and sealed which meant that if sales stopped (like in a lockdown) such leases could potentially cripple the company.

So while the likes of Snow Leopard are being very helpful in pointing out your 'error', the likes of 'percy' are also right in that huge future rent commitments of retailers, (e.g. the cautionary tale of Smiths City), should not be ignored. I am currently wrestling with exactly this IFRS16 issue myself (again) on the VTL thread. You might want to check it out. And I am coming to the conclusion that there are least two 'correct' ways to present accounts like this.

SNOOPY

[BlackPeter]

Lease liabilities are so dumb

Are "dumb liabilities" the opposite of "smart money"?

... always learning ...

[Rawz]

Why does a lease go under the a finance expense and why call it interest. I understand it all but why did they have to make it harder and confusing. If you are going to change something make it easier.

It’s going to constantly trip people up

[percy]

Why does a lease go under the a finance expense and why call it interest. I understand it all but why did they have to make it harder and confusing. If you are going to change something make it easier.

It’s going to constantly trip people up

When I am looking at annual reports and trying to work out ratios I take leases out.[as well as intangibles]
However, the fact retailers are highly leveraged must be realised.
Even if a company such as HLG are thought of being debt free ,it is a possible trap,for those who fail to take lease commitments into consideration.

[Snow Leopard]

Conceptually ( long word for the day :) ) rental/lease agreements are now the purchase of a right to occupy/use which is paid for up front, financed with a 100% loan from the landlord/whomever, and which is repaid in full over the term of the agreement.

The fact that the right generally depreciates linearly and the repayment of the 'loan' is interest heavy at the start created these interesting 'discrepencies' in the accounts on the transition :eek2: .

Hope that helps :lol:

[Muse]

Prior IFRS 16 lots of investors used to take the rental expense out of EBITDA, capitalise it and add it to debt, and look at the new debt/EBITDA ratio for gearing, and I dont know we needed a whole new accounting standard to do what was before a relatively easy adjustment. But I can see the merit as it relates to retail or anyone who makes heavy use of operating leases.

One thing to watch out though are for retailers who give mini updates saying how quickly EBITDA has grown year on year, particularly if they are rolling stores out quickly, as its an incomplete and misleading snapshot in time that doesn't include rental expense. NPAT is king for retail. Although NPAT can even vary from a pre ifrs 16 basis to a post 16 basis, but not usually by enough to think too much about it.

[Muse]

Prior IFRS 16 lots of investors used to take the rental expense out of EBITDA, capitalise it and add it to debt, and look at the new debt/EBITDA ratio for gearing, and I dont know we needed a whole new accounting standard to do what was before a relatively easy adjustment. But I can see the merit as it relates to retail or anyone who makes heavy use of operating leases.

One thing to watch out though are for retailers who give mini updates saying how quickly EBITDA has grown year on year, particularly if they are rolling stores out quickly, as its an incomplete and misleading snapshot in time that doesn't include rental expense. NPAT is king for retail. Although NPAT can even vary from a pre ifrs 16 basis to a post 16 basis, but not usually by enough to think too much about it.


for avoidance of doubt not referring to HLG in the above - they are a good sort who let the numbers speak for themselves.

[DarkHorse]

Prior IFRS 16 lots of investors used to take the rental expense out of EBITDA, capitalise it and add it to debt, and look at the new debt/EBITDA ratio for gearing, and I dont know we needed a whole new accounting standard to do what was before a relatively easy adjustment. But I can see the merit as it relates to retail or anyone who makes heavy use of operating leases.

One thing to watch out though are for retailers who give mini updates saying how quickly EBITDA has grown year on year, particularly if they are rolling stores out quickly, as its an incomplete and misleading snapshot in time that doesn't include rental expense. NPAT is king for retail. Although NPAT can even vary from a pre ifrs 16 basis to a post 16 basis, but not usually by enough to think too much about it.

Great point - the concurrent popularity of EV/EBITDA as a valuation metric is making a lot of companies look cheaper than they are; easy to fall for that, especially with debt free companies.

Another trap is companies trumpeting positive operating cashflow - really misleading when lease payments are a cost of doing business.

It's a shame they couldn't find a way to require lease liabilities to be declared on balance sheets without messing up the P & L and cashflow statements.

[Waltzing]

the darkhorse here is the KIWI .... its more a dead horse at the moment and all retail in NZ might be stuck on a heavy track...

Rating agencies say they cant see the horses for the track in NZ at the moment... who ever shorted KIWI was on to a Winner...

dont expect intellectual PHD accountants to care about actual valuations...

[BlackPeter]

the darkhorse here is the KIWI .... its more a dead horse at the moment and all retail in NZ might be stuck on a heavy track...

Rating agencies say they cant see the horses for the track in NZ at the moment... who ever shorted KIWI was on to a Winner...

dont expect intellectual PHD accountants to care about actual valuations...

Great time for foreign capital to buy Kiwi companies :);

Best medicine against high prices are high prices and best medicine against low prices are low prices.

It all will sort out itself in due course ...

[850man]

Saw this on another thread (Thanks LEK), thought I'd share here as well Attachment 14278 (https://www.sharetrader.co.nz/attachment.php?attachmentid=14278)

[BlackPeter]

Annual report out for more than a week. Where are all the HLG fans gone - or was ait just beagle making that much noise?

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/HLG/401205/381946.pdf

I guess the fact I only came now across this report demonstrates my interest in HLG ... but hey, they are still on my watchlist - and if I am the first to comment, than this might say something about other peoples interest as well ....

No big changes in the parameters I tend to monitor (NTA 2 cents up, ROE dropped to 28.3%, but still quite healthy, liabilities to assets up a bit, but no worries).

However - some observation: I used to like the way their models are dressed for their reports, in some years their reports are a real joy for the eye, but this years report is somehow a disappointment. Feels like a rerun of the 1970'ies - nothing wrong with the models, but the way they are dressed? Many of the tops, dresses and other clothes just look lame to me.

But hey - they say "de gustibus non es disputandum", so maybe its just me?

I hope their customers like these colours and cuts - really this stuff needs to leave the shelves as soon as possible, it looks already tired unsold.

I will pick this year some other shop to buy stuff for my family.

Maybe Kathmandu?

[Waltzing]

BP life getting back to normal and summer coming everyone busy busy busy....

some fans on the other site..

With europe not in a nuclear winter its time to plan re engaging with european markets for 2024....

I think there was a table in the reports where the table had missing items and the sub totals were not accurate.

Just shows that the finanical reports are cut and past and sent to PDF.

Most of these reports dont have table of contents with embeded objects.

Someone will create a report publisher that embeds object named tables with standard tagged named for reporting..

WHEN THIS HAPPENS if ever we wont have to read the reports.

Ellons robots can parse the documents and read it for us projected into the meta verse...

[BlackPeter]

BP life getting back to normal and summer coming everyone busy busy busy....

some fans on the other site..

With europe not in a nuclear winter its time to plan re engaging with european markets for 2024....

I think there was a table in the reports where the table had missing items and the sub totals were not accurate.

Just shows that the finanical reports are cut and past and sent to PDF.

Most of these reports dont have table of contents with embeded objects.

Someone will create a report publisher that embeds object named tables with standard tagged named for reporting..

WHEN THIS HAPPENS if ever we wont have to read the reports.

Ellons robots can parse the documents and read it for us projected into the meta verse...

Interesting, but will bots be able to tell me whether I like the stuff the models wear?

[Waltzing]

BP you will put on your meta verse glasses and be right there on the cat walk!!!!

[peat]

BP they look ok ! Mind you I grew up in the 70's ;)

I like these facts in the picture, apart from the NZ sales going down of course, so I reckon they are starting to do well internationally. In which case NZ sales wont matter as much and there is more room to grow.

14295

[Waltzing]

BP looks like we cant use the Meta Verse goggles just yet...

development problems with software development teams....

looks like attending fashion shows might go on for while now ...

https://www.cnbc.com/2022/11/06/meta-could-begin-large-scale-layoffs-this-week-report-says.html

[850man]

Aussie racing ahead, HLG well set to capitalise on that.

[winner69]

RetailWatch October sales data (NZ) showed Clothing and Footwear up 22.5% on October last year

Australia market on booming .... NZ not doing too badly either

Last 3 months (first 3 months of HLG financial year) NZ market up 32%

All looking good .... good update coming next month .... wonder what x will be when they say 'first 18 weeks sales are x% more than same period last year'

Big number I reckon - all looking good for HLG

[BlackPeter]

BP they look ok ! Mind you I grew up in the 70's ;)

I like these facts in the picture, apart from the NZ sales going down of course, so I reckon they are starting to do well internationally. In which case NZ sales wont matter as much and there is more room to grow.

14295

I was not talking about the numbers (which describe the past), but about the looks of (many of) their clothes they are promoting in the latest report (which will determine the future) ... and yes, even the jeans you copied look tired.

But hey - as I said, you can't really argue about taste and - I definitely hope for HLG shareholders that the majority of their customers have a different taste then I do :p ;

Don't forget - markets are forward looking ....

[Yottie]

With reference to BP's comments re: clothes [ and others ]; on perusing the AR, I thought the same ...

Good for the youth, I suppose. My concern are the people who make the "stuff". Must be quite tricky to put together these 'flimsy' garments.

Not my style; but then i'm 18 months short of attaining quatre-vingts ans.

Cheers

Yottie

Disc: hold

[see weed]

Must be that time again. Ex Div in two weeks and then another div 17 weeks later in April. 7.47% yld still better than the bank. Time to buy some more.

[winner69]

ABS Australia Retail Stats for October

Headline says total sales fell 0.2% month on month seasonally adjusted- clothing etc sector fell 0.6%. Westpac says the dip was below expectations and the broad based weakening suggests that rate hikes are starting to bite

Let the statisticians and bank economists do their thing but the raw numbers were -

Clothing sector October sales were 32% higher than October last year. Annual sales to October were 25% higher than a year ago

For the HLG fiscal period Aug/Sep/Oct clothing sector sales are 58% higher than same period last year

Might need to up forecasts / expectations basil - because Glassons AU will growing faster than the market

[850man]

ABS Australia Retail Stats for October

Headline says total sales fell 0.2% month on month seasonally adjusted- clothing etc sector fell 0.6%. Westpac says the dip was below expectations and the broad based weakening suggests that rate hikes are starting to bite

Let the statisticians and bank economists do their thing but the raw numbers were -

Clothing sector October sales were 32% higher than October last year. Annual sales to October were 25% higher than a year ago

For the HLG fiscal period Aug/Sep/Oct clothing sector sales are 58% higher than same period last year

Might need to up forecasts / expectations basil - because Glassons AU will growing faster than the market

Good news that the Aust economy has a strong pulse, ours is in a gurney on a path to RBNZ orchestrated recession.

[see weed]

Well I don't know about you lot, it goes ex div in 7 days paying me 24c then another 16c to 18c in about 16 weeks after that with any luck. That is about 42c and at this price about 7.7% yld. Where are the keys to that blo.dy truck.:eek2:

[see weed]

Well I don't know about you lot, it goes ex div in 7 days paying me 24c then another 16c to 18c in about 16 weeks after that with any luck. That is about 42c and at this price about 7.7% yld. Where are the keys to that blo.dy truck.:eek2:
Looks like I'm not the only one with the truck backed up. I reckon Beagle will be saying some positive things about HLG at share trader meeting. For me personally, I will be buying more for the 7+% yld rather than have it lying around in the bank at 2% to 3%. Me is buy buy buy and look forward to 42 odd cents payout in next 4 months:cool::t_up:

[see weed]

Looks like I'm not the only one with the truck backed up. I reckon Beagle will be saying some positive things about HLG at share trader meeting. For me personally, I will be buying more for the 7+% yld rather than have it lying around in the bank at 2% to 3%. Me is buy buy buy and look forward to 42 odd cents payout in next 4 months:cool::t_up:
Beagle just told me 48c by next April and 9% yld. Sounds good to me:eek2:

[nztx]

Taxman love all the boys and girls scrambling in to hand over 1/3 of the gains in Div
with holdings tax grabbed just in time for the Tax Dept's Christmas & New Year parties :)

[see weed]

Beagles Forecast........Had a look at HLG's imputation account and I am cautiously hopeful that they can FULLY IMPUTE the April 2023 dividend and am therefore forecasting this to be 24/0.72=33.33 cps gross. Add in the December 2022 unimputed divvy of 24 cps that's gross divvies of 57.33 cps inclusive of imputation credits in April, all receivable in the next 4.5 months = 10.2% gross yield at last Fridays closing price of $5.62c. Also forecasting 24% sales growth for the year to $435m, earnings per share of 80cps forward PE only 7.

[Snoopy]

Hi See weed,

I found the original of your Beagle quote and I noticed you had missed a bit in the middle out, which I have put back in.



Beagles Forecast........Had a look at HLG's imputation account and


they have enough in there at balance date $2.7m to impute the forthcoming 16 December dividend by 50% and seeing as they chose to not impute it



I am cautiously hopeful that they can FULLY IMPUTE the April 2023 dividend and am therefore forecasting this to be 24/0.72=33.33 cps gross. Add in the December 2022 unimputed divvy of 24 cps that's gross divvies of 57.33 cps inclusive of imputation credits in April, all receivable in the next 4.5 months = 10.2% gross yield at last Fridays closing price of $5.62c.


My question is, if there are $2.7m of imputation credits on the books at balance date, why would HLG management not pass these on to shareholders in the upcoming dividend? It seems very strange. I mean, the company has already paid the tax so it doesn't gain anything by not passing the imputation credits on. What possible reason could HLG management have for holding on to them? A confused SNOOPY?!?

[see weed]

Hi See weed,

I found the original of your Beagle quote and I noticed you had missed a bit in the middle out, which I have put back in.



they have enough in there at balance date $2.7m to impute the forthcoming 16 December dividend by 50% and seeing as they chose to not impute it



My question is, if there are $2.7m of imputation credits on the books at balance date, why would HLG management not pass these on to shareholders in the upcoming dividend? It seems very strange. I mean, the company has already paid the tax so it doesn't gain anything by not passing the imputation credits on. What possible reason could HLG management have for holding on to them? A confused SNOOPY?!?
You will have to ask Basil (Beagle) over on Stock Talk forum

[nztx]

Hi See weed,

I found the original of your Beagle quote and I noticed you had missed a bit in the middle out, which I have put back in.



they have enough in there at balance date $2.7m to impute the forthcoming 16 December dividend by 50% and seeing as they chose to not impute it



My question is, if there are $2.7m of imputation credits on the books at balance date, why would HLG management not pass these on to shareholders in the upcoming dividend? It seems very strange. I mean, the company has already paid the tax so it doesn't gain anything by not passing the imputation credits on. What possible reason could HLG management have for holding on to them? A confused SNOOPY?!?




but at 1.8.22 they also has tax receivable of $527K which will reduce NZ imputation credits available further

My thoughts are the dough is being made in OZ - no imputation credits here for Aussie tax paid

If NZ is not humming, little tax being paid in NZ, Prov Tax will be being reigned in for NZ

Why attach NZ tax credits when it may put imputation account in debit which with further tax refund
will all then need to be repaid to NZ IRD to keep Imputation account square or in credit by 31 March 2023 ?

From the 1.8.22 Annual Report -

OZ Net Profit before tax was $26.0 m
NZ Net profit before tax was $ 5.69 m

Hallensteins a further $2.9 m pre tax
and Property a further $0.447 m pre tax

Imputing a 42.0c Annual Div fully will swallow imputation credits of 16.33cps
or NZ $9.74 m in total on present shares on issue.

There may be something further in benchmarking of imputation credit %'s applied
or imputed as well to come into the equation.

It looks like HLG have all but chewed through their NZ imputation credits built up
until operations rebound on NZ turf. If they don't for a while then Aussie may remain
dominant Profit contributor, but Aussie tax paid means no NZ imputation tax credits
generated on operations across the ditch for Kiwi HLG holders ..

[Snoopy]

But at 1.8.22 they also has tax receivable of $527K which will reduce NZ imputation credits available further

My thoughts are the dough is being made in OZ - no imputation credits here for Aussie tax paid

If NZ is not humming, little tax being paid in NZ, Prov Tax will be being reigned in for NZ

Why attach NZ tax credits when it may put imputation account in debit which with further tax refund will all then need to be repaid to NZ IRD to keep Imputation account square or in credit by 31 March 2023 ?

From the 1.8.22 Annual Report -

OZ Net Profit before tax was $26.0 m
NZ Net profit before tax was $ 5.69 m

Hallensteins a further $2.9 m pre tax
and Property a further $0.447 m pre tax

Imputing a 42.0c Annual Div fully will swallow imputation credits of 16.33cps or NZ $9.74 m in total on present shares on issue.

There may be something further in benchmarking of imputation credit %'s applied or imputed as well to come into the equation.

It looks like HLG have all but chewed through their NZ imputation credits built up until operations rebound on NZ turf.


That is a very interesting possible explanation. We know provisional tax is paid 'in advance'. So what you are saying is that HLG has been paying provisional tax given a current 'prevailing outlook' based on projected profits for the year. Yet something has happened since balance date that would suggest profits in NZ for FY2023 over the full year are going to be much less than expected. Thus, come the square up of tax time at the end of the year, much of the provisional tax paid up to will be entitled to be refunded, thus reversing the 'positive imputation balance' that is in the NZ tax imputation account now.

I wonder if HLG is just being cautious, or whether this sales slowdown in New Zealand is real? If the slowdown is real, I guess we will hear about it at the annual general meeting next week?

SNOOPY

[see weed]

Beagles Forecast........Had a look at HLG's imputation account and I am cautiously hopeful that they can FULLY IMPUTE the April 2023 dividend and am therefore forecasting this to be 24/0.72=33.33 cps gross. Add in the December 2022 unimputed divvy of 24 cps that's gross divvies of 57.33 cps inclusive of imputation credits in April, all receivable in the next 4.5 months = 10.2% gross yield at last Fridays closing price of $5.62c. Also forecasting 24% sales growth for the year to $435m, earnings per share of 80cps forward PE only 7.
Just a reminder tomorrow, Wednesdays close is your last chance before 5pm, to buy into HLG to receive the big juicy 24c div

[nztx]

Just a reminder tomorrow, Wednesdays close is your last chance before 5pm, to buy into HLG to receive the big juicy 24c div


Less the 1/3 DWT skimmed off by the taxman before it lands :)

5% slim off with full imputation credits is easily digested but the full
rake off is slightly unpalatable, especially when the Gross yield
including tax credits gets fairly well knifed without the credits :)

[winner69]

Don’t forget today last day to get in on the action for the 24 cents divie ….and then another early next year

That’s if seeweed don’t beat you to the punch

[BlackPeter]

Don’t forget today last day to get in on the action for the 24 cents divie ….and then another early next year

That’s if seeweed don’t beat you to the punch

You can always pay 24 cents to get 24 cents ... and this even without shelling out brokerage fees :) ;

[see weed]

Don’t forget today last day to get in on the action for the 24 cents divie ….and then another early next year

That’s if seeweed don’t beat you to the punch
Beagle has already beat us to the punch he has twice as many as me.:cool:

[see weed]

You can always pay 24 cents to get 24 cents ... and this even without shelling out brokerage fees :) ;
A very good point. Buy a sh.t load now and get div and possibly lot more after div at possibly lower price from div strippers ready for next div 4 months later. but HLG is a hard one to trade, it not liquid enough but a good place to get better yld than bank while waiting;)

[Sideshow Bob]

Meeting addresses:

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/HLG/404138/385637.pdf
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/HLG/404138/385537.pdf

[see weed]

Not much talk here on HLG. Looks like all the action is over on Stock talk. Thanks Beagle for your input. I topped up today with about 7000.

[Muse]

Posted this on the retail thread - thought relevant to HLG given Glassons is the powerhouse behind the group.

<<<

I was reviewing a handful of my Australian positions and as part of that did a bit of work on underlying volumes in the Australian retail market. Thought I'd share as Australian retail relevant to a number of NZX listed firms eg Hallenstein Glassons, KMD, MHJ etc.

I find it interesting to look at volumes as opposed to nominal sales as I think it gives a better indication of underlying activity. Found on the Australian Bureau of Statistics a quarterly timeseries of seasonally adjusted volumes by retail segment - perfect. I indexed the values to the beginning of 2000 and calculated the volume trend to the end of 2019 (to avoid contaminating the trend with all the lockdowns, rebounds, QE and other oddities occurring since).

Below are the seasonally adjusted volumes and associated trend the clothing+accessories+shoes segment indexed to the start of 2000, with the consistent growth pattern leading to 0.98 r2 in the trendline - incredibly strong - which tells us the trend definitely means something.
14422


Then I dropped in the actual retail volumes to 30 September 2022, and rolled forward the previous trend line without updating it for the actual data from January 2020 to September 2022 to get a sense of how current clothing retail volumes compare to the pre covid trend line. This is below.

14423

Clothing retail volumes in the September quarter were up over 21% from their pre covid trend. In all the historic data there hasn't been another data point whose variation above trend was this high.

My review of the October and November seasonally adjusted sales (including inflation) was robust so I'd assume that trend continues and perhaps widens in the December quarter.

So Aussie going gangbusters.

But given that very strong correlation in the volume trend, I can't help but wonder if a reversion to trend (or overshooting to below trend as is often the case) could unfold. I find this quite influential and informs my perspective on the maintainability of Aussie retail volumes, particularly over recent trading periods. High volumes lead to high rebates and lower discounting....falling does the inverse exacerbating the impact on margins together with the fall in sales.

Can't help but wonder if OZ will follow NZ in the retail space, and the last 12 months have been a temporary overperformance in line for a large fall. Or who knows, some may argue the world has changed and the shift to above trend growth is permanent.

All musings, but interesting to ponder, particularly if you are looking to make long term investments with spare dosh or a current holder in the sector. Random perspectives...do your own research...the ABS is a wonderful tool.

>>>

[nztx]

Posted this on the retail thread - thought relevant to HLG given Glassons is the powerhouse behind the group.

<<<

I was reviewing a handful of my Australian positions and as part of that did a bit of work on underlying volumes in the Australian retail market. Thought I'd share as Australian retail relevant to a number of NZX listed firms eg Hallenstein Glassons, KMD, MHJ etc.

I find it interesting to look at volumes as opposed to nominal sales as I think it gives a better indication of underlying activity. Found on the Australian Bureau of Statistics a quarterly timeseries of seasonally adjusted volumes by retail segment - perfect. I indexed the values to the beginning of 2000 and calculated the volume trend to the end of 2019 (to avoid contaminating the trend with all the lockdowns, rebounds, QE and other oddities occurring since).

Below are the seasonally adjusted volumes and associated trend the clothing+accessories+shoes segment indexed to the start of 2000, with the consistent growth pattern leading to 0.98 r2 in the trendline - incredibly strong - which tells us the trend definitely means something.
14422


Then I dropped in the actual retail volumes to 30 September 2022, and rolled forward the previous trend line without updating it for the actual data from January 2020 to September 2022 to get a sense of how current clothing retail volumes compare to the pre covid trend line. This is below.

14423

Clothing retail volumes in the September quarter were up over 21% from their pre covid trend. In all the historic data there hasn't been another data point whose variation above trend was this high.

My review of the October and November seasonally adjusted sales (including inflation) was robust so I'd assume that trend continues and perhaps widens in the December quarter.

So Aussie going gangbusters.

But given that very strong correlation in the volume trend, I can't help but wonder if a reversion to trend (or overshooting to below trend as is often the case) could unfold. I find this quite influential and informs my perspective on the maintainability of Aussie retail volumes, particularly over recent trading periods. High volumes lead to high rebates and lower discounting....falling does the inverse exacerbating the impact on margins together with the fall in sales.

Can't help but wonder if OZ will follow NZ in the retail space, and the last 12 months have been a temporary overperformance in line for a large fall. Or who knows, some may argue the world has changed and the shift to above trend growth is permanent.

All musings, but interesting to ponder, particularly if you are looking to make long term investments with spare dosh or a current holder in the sector. Random perspectives...do your own research...the ABS is a wonderful tool.

>>>


Aussie retail may be more resilient than trends in the silly isles under a long cloud though :)

I like dual country risk exposure for a bit of insurance even if franking/imputation credits
equations can work out to be a bit of a bumm*r/non event here :)

[Muse]

Aussie retail may be more resilient than trends in the silly isles under a long cloud though :)

I like dual country risk exposure for a bit of insurance even if franking/imputation credits
equations can work out to be a bit of a bumm*r/non event here :)

Am on the same page as you NZTX. Australia has a far more conductive economy to long term success in the retail market, in my opinion. All things equal I'd take imputed dividends but all things aren't equal and I'd gladly sacrifice tax efficiency for long term growth in gross dividends and capital value. Geographic diversity I reckon has tangible value as not all economies fire at the same rate and have different drivers.

That said I reckon the RBA has more to go than the RBNZ, and that will eventually be reflected in underlying activity, and eventually SP's.

Likewise, Aussie's advantages in retail should already be reflected in the slope of the trendline relative to NZ's.....but that won't explain their own above trend growth.

https://www.afr.com/chanticleer/this-profit-upgrade-shows-animal-spirits-are-back-20230116-p5ccqz

[winner69]

FM - here's the chart for NZ data.

Same sort of shape .... but looks like the last couple of years not as strong as OZ

Whats the long term growth rates for OZ sales?

[bull....]

Posted this on the retail thread - thought relevant to HLG given Glassons is the powerhouse behind the group.

<<<

I was reviewing a handful of my Australian positions and as part of that did a bit of work on underlying volumes in the Australian retail market. Thought I'd share as Australian retail relevant to a number of NZX listed firms eg Hallenstein Glassons, KMD, MHJ etc.

I find it interesting to look at volumes as opposed to nominal sales as I think it gives a better indication of underlying activity. Found on the Australian Bureau of Statistics a quarterly timeseries of seasonally adjusted volumes by retail segment - perfect. I indexed the values to the beginning of 2000 and calculated the volume trend to the end of 2019 (to avoid contaminating the trend with all the lockdowns, rebounds, QE and other oddities occurring since).

Below are the seasonally adjusted volumes and associated trend the clothing+accessories+shoes segment indexed to the start of 2000, with the consistent growth pattern leading to 0.98 r2 in the trendline - incredibly strong - which tells us the trend definitely means something.
14422


Then I dropped in the actual retail volumes to 30 September 2022, and rolled forward the previous trend line without updating it for the actual data from January 2020 to September 2022 to get a sense of how current clothing retail volumes compare to the pre covid trend line. This is below.

14423

Clothing retail volumes in the September quarter were up over 21% from their pre covid trend. In all the historic data there hasn't been another data point whose variation above trend was this high.

My review of the October and November seasonally adjusted sales (including inflation) was robust so I'd assume that trend continues and perhaps widens in the December quarter.

So Aussie going gangbusters.

But given that very strong correlation in the volume trend, I can't help but wonder if a reversion to trend (or overshooting to below trend as is often the case) could unfold. I find this quite influential and informs my perspective on the maintainability of Aussie retail volumes, particularly over recent trading periods. High volumes lead to high rebates and lower discounting....falling does the inverse exacerbating the impact on margins together with the fall in sales.

Can't help but wonder if OZ will follow NZ in the retail space, and the last 12 months have been a temporary overperformance in line for a large fall. Or who knows, some may argue the world has changed and the shift to above trend growth is permanent.

All musings, but interesting to ponder, particularly if you are looking to make long term investments with spare dosh or a current holder in the sector. Random perspectives...do your own research...the ABS is a wonderful tool.

>>>

would be good to know if hlg was discounting product in the said period. would explain the big jump in volume.
many forecasters are predicting aussie retail saw a last gasp jump end of last yr before the slowdown comes later this yr due to rising rates on mtge's
this is evident in some aus retail company update's already this mth which show some business doing good and others not

[Muse]

would be good to know if hlg was discounting product in the said period. would explain the big jump in volume.
many forecasters are predicting aussie retail saw a last gasp jump end of last yr before the slowdown comes later this yr due to rising rates on mtge's
this is evident in some aus retail company update's already this mth which show some business doing good and others not

(those are industry vols not HLGs)

my gut would tell me hlg wouldn't have been doing much/any excessive discounting during that period (but i stand to be corrected when they report). I dont think there would have been any need to given the level of demand. more likely in other retail segments

[bull....]

(those are industry vols not HLGs)

my gut would tell me hlg wouldn't have been doing much/any excessive discounting during that period (but i stand to be corrected when they report). I dont think there would have been any need to given the level of demand. more likely in other retail segments

be watching those margins for signs of discounting i will. ( think it was evident last report they are doing discounting ? )

[winner69]

Hey FM - NZ industry sales charts

My calc shows that current volumes in NZ are 23% above the trend line

If things revert to that trend line that's a lot sales that won't be had .... over much time period will be interesting

What you say about OZ