HLG - Hallenstein Glasson

[tim23]

$4 next stop it should get there especially if near 40c dividen.

[JeremyALD]

So if they can exceed 22m NPAT this FY it would be their best result in at least 10 years. Pretty impressive considering people were doubting their survival a year or so ago with increased competition.

[winner69]

Ok, feeling a bit thick here. Can you explain how a company can achieve 700% gross margin on the $ value of stock held? Are you saying the product costs the company $1 to source from China and they successfully sell it for $8 here in NZ making $7 gross profit (on average)?

Remember they turn that $1 stock over 5 times a year

Stock levels over the year averaged about $19m and it generated about $134m of Gross Margin. That’s what I was trying to say.

There GM in F17 was 59% of sales - meaning that on average that item that cost $1 was sold for $2.43 to give a gross margin of $1.43 (or 59% of $2.43)

[JeremyALD]

From the NZ Herald. How this analyst can possibly try and put a dim spin on this announcement is beyond me !

Research analyst Mohandeep Singh said a forecast increase of 50 per cent for annual profit looked good from the outset but there were multiple factors at play. "If you look at the first-half of last year, the Hallensteins brand had a really poor performance - their growth margin was the lowest in more than six years, so I suspect this 50 per cent increase, a big chunk of that, will be a rebound," he said.
A less than favourable start to summer last year would have also slowed the company's sales last year, Singh said.
"You're [also] getting a reversal of some of those factors where the weather is now more favourable, they've opened up a bunch of new stores that potentially weren't open last year and so you're getting the improvement impact from that," he said.
Hallenstein Glasson opened six new stores and renovated four in the last year.
There are 44 Hallenstein Brothers and 38 Glasson stores in New Zealand.
Purchasing stock at a more favourable currency rate six or more months ago would also be an influencing factor, Singh said.
"The currency is starting to come off, although, that won't effect Hallenstein Glasson until the second-half of the year."
Glasson's strong performance was also lifting group performance, Singh said.
"Business confidence has come off a little bit, there's an expectation that we'll see a little bit of a slowdown in the economy but if you take that as a marker, they're doing pretty well in a tough environment."

[winner69]

At this rate HLG must be a contender to get back into the NZX50 Index next year. Will have market cap over $300m if things go as expected

Remember when it was kicked out of the Index it was replaced by Pacific Edge PEB. The HLG share price was over $3 at the time.


Just shows you how flawed the way these indices are structured, esp from a medium to long term investment perspective. Too many changes made too often.

[Raz]

From the NZ Herald. How this analyst can possibly try and put a dim spin on this announcement is beyond me !

Research analyst Mohandeep Singh said a forecast increase of 50 per cent for annual profit looked good from the outset but there were multiple factors at play. "If you look at the first-half of last year, the Hallensteins brand had a really poor performance - their growth margin was the lowest in more than six years, so I suspect this 50 per cent increase, a big chunk of that, will be a rebound," he said.
A less than favourable start to summer last year would have also slowed the company's sales last year, Singh said.
"You're [also] getting a reversal of some of those factors where the weather is now more favourable, they've opened up a bunch of new stores that potentially weren't open last year and so you're getting the improvement impact from that," he said.
Hallenstein Glasson opened six new stores and renovated four in the last year.
There are 44 Hallenstein Brothers and 38 Glasson stores in New Zealand.
Purchasing stock at a more favourable currency rate six or more months ago would also be an influencing factor, Singh said.
"The currency is starting to come off, although, that won't effect Hallenstein Glasson until the second-half of the year."
Glasson's strong performance was also lifting group performance, Singh said.
"Business confidence has come off a little bit, there's an expectation that we'll see a little bit of a slowdown in the economy but if you take that as a marker, they're doing pretty well in a tough environment."

Well its not beyond me! :-) Some good points and seems a clear switching going on in the economy..wait to see the next six months :-)

[JeremyALD]

Well its not beyond me! :-) Some good points and seems a clear switching going on in the economy..wait to see the next six months :-)

Hmm it's going to be their best ever H1 result so obviously some stars have aligned, but last year was much better than the year before so it's not like the 50% increase is from a low baseline which is what that article makes out

[sideline]

I see forbar have a research report on HLG today - "Hallenstein Glasson (HLG) Scorcher Start to Summer".

Has anyone access and give us a brief summary?

[Beagle]

Hmm it's going to be their best ever H1 result so obviously some stars have aligned, but last year was much better than the year before so it's not like the 50% increase is from a low baseline which is what that article makes out

Correct, this 50%+ profit growth is on the back of a 35% profit growth last year in IH performance. I'd say that analyst has not grasped how the company is transforming its business.

they're doing pretty well in a tough environment."

Surely this gets a prize for the understatement of the year ! lol

[Maverick]

Hmm it's going to be their best ever H1 result so obviously some stars have aligned, but last year was much better than the year before so it's not like the 50% increase is from a low baseline which is what that article makes out

Totally agree Jeremy.Two summers ago HLG posted NPAT of 6.8 million ( one of their worst 6 month periods) , last summer was 9.2 million (this was their best 6 months over the last 5 years). This summer might be 9.2*1.5=13.8 million. It appears the researcher has used the wrong year to base his work on. Maybe he got his intel off the ASB website where they haven't added last year's figures yet. Is that too arrogant of me to think? What I really like about this company is that , with a big of work, the reports are very simple and formattic.