HLG - Hallenstein Glasson

[Raz]

the mobile payment units in the shop , and the weekend and evening delivery options for online purchasing are actually quite innovative and customer focussed - not bad for a century old firm.

Very standard in the US retail scene, surprised not more mainstream here...

[Baa_Baa]

Indeed, it is sometimes a real advantage having a smaller holding that can be more readily liquidated. I wouldn't be entirely surprised to see this with a 3 something handle in due course. Might be very good buying again then

At least their website will keep one entertained while the SP sorts itself out. I mean the investor pages of course, Lol

[DarkHorse]

Wonder if a lot more bad weather than usual for late Nov/early Dec has affected sales?

[JamieJ]

Stunning marketing!

https://www.glassons.com/yourglassons
We LOVE seeing your shots! So share yours with us on instagram using #glassons - you'll go in the draw to win a $100 gift voucher to use in store or online.
Plus you can shop directly from the gallery the #glassons looks you ♥ Win, win!
Pssst... don't have instagram? You can upload your image directly below.

[couta1]

They won't be able to exit completely without a good loss.

Gragher will be losing heaps from now on, that's good.

[Brain]

[QUOTE=JamieJ;740976]Stunning marketing!

https://www.glassons.com/yourglassons

Absolutey. HLG know their business and are innovative. The future looks good.

[Arbroath]

I've done a bit more work on this now and I tend to agree now with your profit range assessment (while noting its still very early days).
Same store sales growth is negative so there are cost implications there on top of normal price increases for labour, leases power e.t.c. and they are saying margins are under pressure so clear implications there for the gross profit margin which could fall to as low as 57% down from 61% last year and 58.8% the year before. A lot depends upon the level of discounting towards the end of the season of course.

I note they appear to be losing sales momentum as the year unfolds. $21.5m / 59.6m shares gives eps of 36 cps. PE of 10 gives $3.60. Might overshoot on the downside down towards baseline support in the $3.30-$3.40 range. I think this is an "avoid" until Graghar have sold down quite a lot more.

We're on the same page pretty much. My ballpark mid-point numbers are:

Sales $286m +3% yoy
GM 58% = c. $166m
Costs $135m (up $2m on FY18)
Tax $9m
Npat $22m

For me $3 is cheap and $4 is top end until there is more clarity. They might surprise over Xmas-NY and the opportunity could be missed but it feels very much like they have a good year, and $22m would still be a very good performance, but it is put in the shade by FY18 and the excitement that generated.

I'm particularly interested in how their online sales keep progressing as over the next 3-5 years I think that will be very important for them from a cost to serve perspective.

[Beagle]

We're on the same page pretty much. My ballpark mid-point numbers are:

Sales $286m +3% yoy
GM 58% = c. $166m
Costs $135m (up $2m on FY18)
Tax $9m
Npat $22m

For me $3 is cheap and $4 is top end until there is more clarity. They might surprise over Xmas-NY and the opportunity could be missed but it feels very much like they have a good year, and $22m would still be a very good performance, but it is put in the shade by FY18 and the excitement that generated.

I'm particularly interested in how their online sales keep progressing as over the next 3-5 years I think that will be very important for them from a cost to serve perspective.

Thanks, yeah we're on the same page. I am assuming 58% gross profit, (with risk to the downside) and am also assuming a 3% sales increase. Agree 100% about your comment regarding online sales. It would be great if they can really drive this hard, (smoking hot digital images help) as they already have a significant retail footprint in both countries so their ability to leverage the brands to grow online sales is crucial to driving long term earnings. That said looking at the really big picture of their history its pretty sad really that this is N.Z.'s oldest listed company but hasn't grown enough in all that time to even be in the NZX50. That unfortunately speaks huge volumes for the cyclical nature of this industry in my opinion.

I did some more work on this from a dividend perspective yesterday. Assuming 14 cps interim dividend in April 2019 the 7 year average dividend is
32.8 cps fully imputed. 32.786 / 0.72 = 45.536 cps gross. At $3.50 that would give a 13% gross yield.
For what its worth despite the Graghar sell down I would be interested in getting back in around that level as my primary interest is dividend yield now that I am somewhere near approaching retirement.

The full dividend history for those interested, 2013 to my forecasted 2019 annual total is
2013 33.5 cps
2014 28.5 cps
2015 31 cps
2016 30 cps
2017 31.5 cps
2018 37 cps
2019 my forecast 38 cps (December just paid 24 cps, April 2019 my conservative forecast is 14 cps)
average 32.786 cps

[BlackPeter]

Thanks, yeah we're on the same page. I am assuming 58% gross profit, (with risk to the downside) and am also assuming a 3% sales increase. Agree 100% about your comment regarding online sales. It would be great if they can really drive this hard, (smoking hot digital images help) as they already have a significant retail footprint in both countries so their ability to leverage the brands to grow online sales is crucial to driving long term earnings. That said looking at the really big picture of their history its pretty sad really that this is N.Z.'s oldest listed company but hasn't grown enough in all that time to even be in the NZX50. That unfortunately speaks huge volumes for the cyclical nature of this industry in my opinion.

I did some more work on this from a dividend perspective yesterday. Assuming 14 cps interim dividend in April 2019 the 5 year average dividend, (is this long enough to pick up the full cycle ?, I am not sure) is 33.5 cps fully imputed. 33.5 / 0.72 = 46.53 cps gross. At $3.58 that would give a 13% gross yield.
For what its worth despite the Graghar sell down I would be interested in getting back in around that level as my primary interest is dividend yield now that I am somewhere near approaching retirement.

I think winner published recently some good charts showing the cycle, but can't find them now. Just looking at the SP movement, it might be safer to assume a 6 (+/-1) year cycle. Recent peaks have been in 2006, in 2013 and 2018. To be fair, there was as well some sort of interim peak in 2010, but not sure we should count that, it looks more like SP got at that stage a bit ahead of itself.

Independent from the fundamentals and the cycles - the recent drop looks shocking. I'd assume that while the SP will midterm keep falling to a mid $3 handle, there should be short term some bounce back. Nearly tempted to ride that bounce ... it is only - I found that I am not particular good in timing bouncing cats, no matter whether they are dead or alive ;

[Beagle]

Thanks BP, I reworked that now as you can see above and went with a 7 year average. I agree, in hindsight it was never worth anything like $6.30.
Yeah mate...I try and stay away from bouncing cats...usually this old dog is not quick enough and comes away with a good clawing on his snout.