HLG - Hallenstein Glasson

[Steve]

Another retailer has issued a profit downgrade

The Directors advise that group sales for the key trading period of December and early January have been equal with last year. This represents an improvement on the trend of -2% advised to the market 11th December 2006.

Total group sales for the period 2 August 2006 to 22 January 2007 are -1% on last year, with same store sales -7%, which reflects a challenging summer season due to unfavorable weather conditions for apparel.

Stock levels are well controlled, and the company is well positioned to move forward into the new winter season.

Net profit after tax for the full 6 months to 1 February 2007 is projected to be in the range $9.8 to $10.0 million, down approximately -10% on the prior year ($10.9 million).

I'm a long term holder of HLG, so not too worried by this announcement as HLG is still a very well run company

[TheBossMan]

Is their profit margin going down?

[Steve]

quote:Originally posted by TheBoss

Is their profit margin going down?

Is sales are down 1% and profit is down 10%, then it possibly is. Then again, they say that stock levels have been controlled, so the margin may not be that much down.

I guess we have to wait until the end of march for the announcement...

[winner69]

quote:Originally posted by Steve

quote:Originally posted by TheBoss

Is their profit margin going down?

Is sales are down 1% and profit is down 10%, then it possibly is. Then again, they say that stock levels have been controlled, so the margin may not be that much down.

I guess we have to wait until the end of march for the announcement...

Just from the ann one would have say that profit margin down from 11% to 10%

What has happened to Gross Margins we will have to wait and see

If there is a concern it has to be the 7% decline in same store sales ..... that's some fall

[scamper]

currently down to 500, down 12 cents, on a grand volume of 984 shares.
i see that there already buyers at 501 and 502, but the nearest seller is 512.
this stock is sufficiently bouncy to make a good trade stock, but am currently happy as a long-term holder also.

[scamper]

not sure that the words above are all that sensible!
hlg has had an extraordinary go-nowhere 12 months.
a couple of big bounces outside the range of 490-530.
the div is 6.8%, p/e is 14 which make it an ok hold, but would like to see some steady progress.

[Deev8]

quote:Originally posted by scamper

the div is 6.8%, p/e is 14 which make it an ok hold ...

The historic P/E and yield are 14 and 6.8%. But looking at numbers rather than ratios, earnings were 36.62c per share and the dividend was 35c per share - a payout ratio of 95%.

I don't place much faith in brokers' forecasts, but those I have seen indicate earnings marginally below last year. After a first half that was down approximately 10% on the prior year, there's an expectation of some recovery built into those forecasts for the second half. It wouldn't take too much of a slip for the dividend to be chopped, and the P/E to move up into the expensive range.

[macduffy]

Breaking the support level may not be particularly significant in the context of today's market?

[Steve]

It has closed back at the $3.60 level. We will know next week if it holds...

[Hommel]

My feeling is that as retailing gets tougher as the housing market recedes over the next year stocks like HLG and HBY and even CAV will become even better buys for the next up-cycle. No hurry to jump in.