HLG - Hallenstein Glasson

[pg0220]

Love that 24c dividends

[BlackPeter]

A solid result still improving a bit on last years stellar result. Well done!

I noticed liabilities to asset ratio went up from 25.8% to 28.3%. Still nothing to be concerned off, but might be worthwhile to keep an eye on the trend.

ROE as usual for HLG nearly in the stratosphere (38.7%), but slightly down compared to last year (40.1%).

Very well managed company (though they hint to some past cockup's in the Hallenstein Brothers domain), but it still looks for me they are scratching along the ceiling of the quartil of the cycle.

Backward PE (10 years) is 18, backwards earnings CAGR (10 years) was 4.5%. Hard to predict in this industry what the future might bring - but based on backwards numbers looks the share in my view fully priced.

On the other hand - if I just use linear extrapolation (which may or may not make sense), than forward PE (4 yrs back, 3 years forward) would be 13.7 and forward CAGR 6.3. This would look cheap, trouble is just - linear extrapolations don't makes sense at the top of the cycle ... - if that's where we are.

Anyway - congratulation to all holders & enjoy the dividend!

[Beagle]

Glassons Australia sales up 14%, they now have critical mass over there with sales about 90% of N.Z. sales...just scratching the surface of the Australian market which is five times the size of our market and Glassons are growing fast. Some people see the opportunity and others don't and that's fine.

Some people's "peak of the cycle" claims when consumer confidence is so muted make no common sense at all to me but people will believe whatever they like and that's their prerogative...

10.4% gross yield with all the growth in Australia to come. Hmmmm...who said you can't have your cake and eat it too

[BlackPeter]

Glassons Australia sales up 14%, they now have critical mass over there with sales about 90% of N.Z. sales...just scratching the surface of the Australian market which is five times the size of our market and Glassons are growing fast. Some people see the opportunity and others don't and that's fine.

Some people's "peak of the cycle" claims when consumer confidence is so muted make no common sense at all to me but people will believe whatever they like and that's their prerogative...

10.4% gross yield with all the growth in Australia to come. Hmmmm...who said you can't have your cake and eat it too

Absolutely - if they roll up the Australian market with all Ossie competitors surrendering and concurrently consumer confidence shooting through the roof, than only the sky will be the limit.

However - consumer trends and markets are easily spooked and incredibly fickle - and just looking at history, then the percentage of NZ companies being long term successful overseas (and particularly in Australia) is not great.

You are pointing out the potential, I am pointing out the risks. As you said, ultimately everybody needs to decide for themselves where to put their money ...

[Beagle]

On last year's normalised numbers PE is just 12.8. Profit was boosted by a one off property sale of $1.2m so normalised profit is $27.8m and normalized eps is 46.6 cps. Even on your 10 year backward view and accepting that at face value of CAGR in earnings of 4.5% and with interest rates where they are suggesting no growth PE of 11 is fair value I don't share your view its fully priced as one is paying only a very small premium to a no growth company.

They have clear momentum in Australia for a few years now. They are evaluating a number of new outlets in Australia for Glassons as well as now looking for expansion opportunities for Hallensteins over there too. In my view one is paying almost nothing for the growth potential...but each to their own.

In conclusion - The sector comparison I did the other day with BGR, KMD and WHS suggested HLG were not worse than fair value for the sector and I think they have more potential for growth compared to BGR and WHS.

Growing sales at 7.2% YTD this year is quite an achievement when consumer confidence is at a four year low http://www.sharechat.co.nz/article/e...the-futurehtml

A key measure of the efficiency of a retailers distribution model is the proportion of online sales. See how HLG compares to its retail peer group here
http://www.sharechat.co.nz/article/4...s-guidancehtml

[winner69]

Consumer confidence down but Hallensteins and Glassons going gangbusters

HLG share price be 7 bucks soon

[Beagle]

Wonder what happens to sales and profit when consumer confidence returns to normal level's ?

[winner69]

All this talk of the ‘top of the cycle’ and other things doesn’t really apply to HLG

The market per se might be cyclical but the main driver of HLG performance at the moment is growth from increasing market share ....significantly in Australia


Growing share is what counts ...even if it from new stores

[winner69]

Wonder what happens to sales and profit when consumer confidence returns to normal level's ?

Maybe those consumer confidence surveys are a load of crock

[Beagle]

Maybe those consumer confidence surveys are a load of crock

Probably they're correct but there can be quite a difference in viewpoints between the different generations.
According to a graph I saw the other day on CNBC based on US analysis over the last 20 years, young people are consistently considerable more optimistic than the over 55 age group. HLG group targeting the right demographic group then eh
Great to see their digital sales roaring ahead to 15%, substantially more than other N.Z. retailers.