HLG - Hallenstein Glasson

[winner69]

Annual depreciation of ~ $7m underpins a dividend that slightly exceeds EPS.

Yes, operating cash flows are always pretty strong and pay for ongoing investment in the business.

But the pile of leftover cash has been shrinking over recent years as they maintain that 30 cent odd dividend

Still wondering by they mentioned cash flows in the announcement

[macduffy]

Yes, operating cash flows are always pretty strong and pay for ongoing investment in the business.

But the pile of leftover cash has been shrinking over recent years as they maintain that 30 cent odd dividend

Still wondering by they mentioned cash flows in the announcement

Reassurance on their ability to maintain dividends? Perhaps they've been reading your posts, winner!

[Snoopy]

I'm sure one could debate the ethics of almost every item they buy within the supply chain of food/clothing/electronics/building materials etc. And if you were to take a stand on everything you might find yourself hungry and homeless quite quickly!

Some things are harder to buy 'ethically' than others. Difficult is a relative term, and so is ethical some some extent. But I don't think that buying 'ethical food' is all that difficult.

Clothing is more difficult. There is still stuff made in New Zealand, but you really have to search. You won't find NZ made clothing in shopping malls. The problem is that a lot of NZ made clothing is very good quality but also really expensive. Too expensive for the average family to buy. I have reached the age/stage when I can buy NZ made clothing. I wouldn't cast judgement on young families today who can't afford to do that.

What does get my dander up is the upmarket NZ icon brands like 'Icebreaker' ( D- ) who charge high prices and have all sorts of supply chain issues on a level way above anything that HLG might be accused of. Modern day slavery to feather the pockets of the privileged. At least with clothing from the Warehouse, it may have been made cheaply. But it is also sold cheaply so that those in NZ on a budget can benefit.

I agree that Hallensteins should not be at the top of any apparel black list. But giving HLG a B- grade is still 'sugar coating. IMO.

Whilst I would agree not perfect and ethics are personal to everybody..."Glassons has continued to improve to a B- from a C+ last year and a D- in 2015"...progress if something?

I think there is an argument for buying the 'relative best' of a 'doubtful bunch'. If all investors (and shoppers) did that, the 'average' should gradually edge higher. I wouldn't disagree with someone buying the most ethical that they could afford to buy either.

Haven't really got time to play tug of war over this bone with you at the moment but B- doesn't sound too bad at a real quick look.
Airlines cause filthy pollution, shall we all stop flying because of that ? Its a bone of contention with all sorts of products we buy or consume. Apple for instance have some highly questionable practices, shall we all stop buying their products ?

Airlines are an instance when there really isn't an alternative choice. Check out going from Auckland to London on a cruise boat verses the price to fly and you will see what I mean.
I wouldn't buy Apple products when there is an equivalent tech alternative.

SNOOPY

[Beagle]

I bought a lovely made in N.Z. alpaca jersey for a whopping $400 a few years back when I was in Arrowtown as a special treat to remind me of a special holiday. Very soft and a real joy to wear but only lasted about 10 wears before it looked shabby, (Alpaca wool is incredibly soft but that really counts against in the wear and durability department) so I tucked it away for special occasion use only but the moths found it and apparently love alpaca wool so within 6 months that was the end of that.
On the other hand a cheap polypropylene sweatshirt I bought from Haldenstein's ten years ago still looks fine and now the rotund beagle hound has slimmed down a bit it fits again too ! Any wonder why cheap and cheerful is popular !

[Snoopy]

I bought a lovely made in N.Z. alpaca jersey for a whopping $400 a few years back when I was in Arrowtown as a special treat to remind me of a special holiday. Very soft and a real joy to wear but only lasted about 10 wears before it looked shabby, (Alpaca wool is incredibly soft but that really counts against in the wear and durability department) so I tucked it away for special occasion use only but the moths found it and apparently love alpaca wool so within 6 months that was the end of that.
On the other hand a cheap polypropylene sweatshirt I bought from Hallenstein's ten years ago still looks fine and now the rotund beagle hound has slimmed down a bit it fits again too ! Any wonder why cheap and cheerful is popular !

Ten years ago your polyprop sweatshirt from Hallensteins may have been kiwi made! That is why it has lasted so well! You generally do have to pay a more expensive price for durability. But the statement doesn't work the other way around. IOW, just because something is expensive, does not automatically mean that it will be durable!

SNOOPY

[JeremyALD]

So I was doing some research last night and had a good read of the Annual Report and ASM. I'm trying to make my own assumptions for NPAT in FY17 if things trend in a similar way for the rest of the year. I appreciate this is a long way out, but thought it would be fun to create some assumptions based on what we've heard so far.

My observations were below:

Hallensteins

Still a very competitive environment and unlikely to see sales growth in FY17. Flat so far this year. They may get a bit more margin from products this year, but competition is resulting in some margin cutting.

My guess is NPAT will be slightly up this year due to a better winter trading period and improved margins due to exchange rates ect. I predict NPAT at 9 million, up from 8.5 million in FY16.

Storm

Sales are actually behind so far this year, but they have opened a new store in Queenstown which should lift revenue and sales.

Guessing NPAT will be flat at .8 million, but for good measure and the new store will round up to 1 million.

Glassons Australia

Here's where the big turnaround will be and where I project long term will come from. In recent announcements, Hallensteins is confident the store will return to profit in FY17. Sales are up over 10% and the stores are seeing a good turnaround.

Guess is NPAT will be between 1 and 2 million, up from a loss of 1.9 million in FY16. I think results will further improve in FY18 which is great for the Group.

Glassons New Zealand

Improved margin is expected to be witnessed in FY17 and sales are up so far. Glassons NZ is always a solid performer and this year should be no different.

Based on the above sales increase estimating NPAT of 6 million up from 5.5 million in FY17.

Overall

Based on fairly conservative estimates and what the Group has announced I'm predicting NPAT for Hallensteins in FY17 in the range of 16 to 18 million. There will definitely be considerable improvement in the Glassons business, with fairly flat sales across Storm and Hallensteins; however higher margins should also improve their respective NPAT performance.

Performance should be fairly in line with the Groups performance in 2013 and 2015 and I would think all going well should support a SP above $3.50.

Pretty happy with my predictions from Jan

[Beagle]

Pretty happy with my predictions from Jan

Kudos to you mate, well done. Shame it didn't support the price as you suggested but did give some of us the chance to get back in at ~ $3

[winner69]

Topshot in receivership - Round 1 to HLG

But then many on this thread would say if Topshot can't hack it in NZ and Australia then the writing really on the wall for HLG

[percy]

Topshot in receivership - Round 1 to HLG

But then many on this thread would say if Topshot can't hack it in NZ and Australia then the writing really on the wall for HLG

Maybe,but I think any business that is a franchise of a UK firm would face seasonal and a number of other issues.
UK firm would not let them have next season's design before themselves.
HLG have control over design,store format,store location,advertising,online model, and logistics, without paying any franchise fees.

[Beagle]

Topshot in receivership - Round 1 to HLG

But then many on this thread would say if Topshot can't hack it in NZ and Australia then the writing really on the wall for HLG

No, HLG have a proven resilient model. Many naysayers on here were predicting Top shop would be the beginning of the end for HLG but have proved themselves ineffective at making in roads into HLG's well established business model.
http://www.sharechat.co.nz/article/d...sses-mounthtml
Disc: Hold HLG for their very long proven history of paying very high fully imputed dividends.