HLG - Hallenstein Glasson

[peat]

divvy yield is really quite compelling

the divvy hasn't been covered by earnings in three of the last 5 years.
And each of the last three years earnings have reduced from the year before. at best this latest half flattens the decline rather than turns it around.
retail may be tough but economy is quite good really - so how will retail do when things go off the simmer.

I

[TheHunter]

retail may be tough but economy is quite good really - so how will retail do when things go off the simmer.

Not too sure about you Peat, but I know I still plan on wearing clothes when the economy goes off the simmer.

[peat]

I still plan on wearing clothes when the economy goes off the simmer.

how many, the new seasons or only once they're on sale? Lots of accessories, or none at all.
<sigh>

am I being trolled?

[percy]

the divvy hasn't been covered by earnings in three of the last 5 years.
And each of the last three years earnings have reduced from the year before. at best this latest half flattens the decline rather than turns it around.
retail may be tough but economy is quite good really - so how will retail do when things go off the simmer.

I

HLG is a very well run business,good stock selection,good logistics,good store displays.good advertising.
However when retail does slow down, they have large on going high overheads with Mall rents and staffing costs,which they cannot control.
Their margins are very high, which I would expect to attract competition from online retailers,where HLG are not strong.
Retail remains a difficult sector for investors, and I think a good warning signal is Briscoes' stated objective of looking for growth online .
In the meantime the dividend is very high,which will underpin the share price for the immediate future,but for them to continue,at some stage earnings will have to grow.I can not see this growth,so take care.

[Beagle]

Craigs have upgraded and have a 12 month price target of $4.40 PE 11 Gross divvy yield of 12.5%
First N.Z. have upgraded to a 12 month price target of $4.10 with similar metrics and outlook.

Peat, Please read the outlook statement in the earnings report. They paint a very healthy and robust picture which the analysts are clearly seeing. Despite your claim that earnings don't cover dividend their balance sheet is exceptionally stong with no debt other than usual trade creditors. You could easily make the case that the economy is not simmering along nicely, (and yet HLG are). I presume you've noticed the massive reduction in the dairy farmers forecast pay-out and the drought that affected much of N.Z. this summer ?

[noodles]

Craigs have upgraded and have a 12 month price target of $4.40 PE 11 Gross divvy yield of 12.5%
First N.Z. have upgraded to a 12 month price target of $4.10 with similar metrics and outlook.

So if you buy before the ex div date and sell after the final dividend, you could make 25% gross on an annualised basis!
This assumes no share price appreciation. I note the targets are way above the current share price.

[Beagle]

So if you buy before the ex div date and sell after the final dividend, you could make 25% gross on an annualised basis!
This assumes no share price appreciation. I note the targets are way above the current share price.

Yes quite right mate. Another perspective worth considering is that both analysts view is a little conservative because those buying now will get a 14.5 cent fully imputed dividend back, (in five minutes time so too speak), so if one is investing for the medium term you can work your earnings metrics on your net invested price after deducting your initial dividend.

[TheHunter]

Their margins are very high, which I would expect to attract competition from online retailers,where HLG are not strong.

Just out of interest - why aren't HLG strong in this area Percy?

[percy]

Just out of interest - why aren't HLG strong in this area Percy?

I think the reason is/was Tim Glasson being a brick and mortar man, has never seen online as being a threat.
Therefore they were slow to move online,and with little conviction.
If you compare this with Briscoes' Rod Duke commitment,you can see the reason why one is doing well on line, while the other is not.
It is also interesting to note Briscoes use www.estaronline.com !!!!
Yes I hold Estar shares!!!!!

[dagoldtoof]

last week did my six month user test on HLG...Online purchase ex Trade Me was quick delivery , nice product, good price....The early shop experience 9.15am was a good one, 5 staff helpful, even at that time others shoppers buying, autumn products displayed, purchased again, other similar shops in block appear slow ......HLG email me new seasons products daily (sometimes free delivery) which I hope tick all the boxes for fashionable kiwis... ....Happy I purchased shares, should have bought more...Not a mall , small city....