HLG - Hallenstein Glasson

[winner69]

That card spend was seasonally adjusted number ...actuals for apparel was 89% down on April last year - from $332m to $36m

So down nearly $300m - HLG stores usually about 5% of this sector so sales down $15m for month ....at least - about $10m gross margin hit to bottom line ..... while at the same time overheads had to be paid.

And that’s just NZ

[macduffy]

Apparel stores were shut, how could they have sold anything? The number is meaningless.

Those that did sell a bit were those with a good e-commerce offering. HLG is one such.

[winner69]

Apparel stores were shut, how could they have sold anything? The number is meaningless.

...but the $10m loss of margin is not meaningless

Question then ....will they recover all of that in the next few months?

[James108]

I think the current market price reflects an expectation that hlg makes a loss this year and returns to normal profitably over 2 years. That might be slightly optimistic, current price is upper bound of fair value in my opinion.

[Balance]

I think the current market price reflects an expectation that hlg makes a loss this year and returns to normal profitably over 2 years. That might be slightly optimistic, current price is upper bound of fair value in my opinion.

Yup.

And the stockmarket prices in that strong possibility - based upon the quality management and track record of companies like HLG.

Market looks ahead - not behind.

[Beagle]

That card spend was seasonally adjusted number ...actuals for apparel was 89% down on April last year - from $332m to $36m

So down nearly $300m - HLG stores usually about 5% of this sector so sales down $15m for month ....at least - about $10m gross margin hit to bottom line ..... while at the same time overheads had to be paid.

And that’s just NZ

Remember when we both bought into this at the bottom of the last cycle in August 2016 at $2.70? Profit we were looking for in regard to FY17 was $20m which gave eps of 33.5 cps (PE of just 8) and we were drawn by the projected 15% gross dividend yield.

How the market thinks its now worth $4.15 with the currency about 10 cents south of where it was in 2016 and all the ongoing uncertainty of how this will recover from Covid 19 and over how many years is a mystery to me. Even if this was presently $2.70 I would suggest our original purchase on those metrics contained far less risk.

I think the point is this only looks cheap to those who are referencing a $6 price viewpoint. If one changes their frame of reference this looks super expensive for the risks involved.

Maybe they get back to earning $20m in FY22, maybe its FY23 but in the meantime ? How many years before we see profit back at where it was in FY19 ?

[tim23]

Remember when we both bought into this at the bottom of the last cycle in August 2016 at $2.70? Profit we were looking for in regard to FY17 was $20m which gave eps of 33.5 cps (PE of just 8) and we were drawn by the projected 15% gross dividend yield.

How the market thinks its now worth $4.15 with the currency about 10 cents south of where it was in 2016 and all the ongoing uncertainty of how this will recover from Covid 19 and over how many years is a mystery to me. Even if this was presently $2.70 I would suggest our original purchase on those metrics contained far less risk.

I think the point is this only looks cheap to those who are referencing a $6 price viewpoint. If one changes their frame of reference this looks super expensive for the risks involved.

Maybe they get back to earning $20m in FY22, maybe its FY23 but in the meantime ? How many years before we see profit back at where it was in FY19 ?

Don't forget they have saved on not paying dividend which would have been due this month.

[Snow Leopard]

The current market price is based on the knowledge that when HLG opens their doors again the queues will be really long.

"This the queue for Hallensteins?"
"Yep"
"Queens St?"
"Auckland? Nah! This is for Queensgate, in Wellington mate"

[clearasmud]

Without Glassons Hallensteins would be a weak business.

[clearasmud]

But as it is its a beautiful business with real growth potential.