I agree, Beagle. But it's the perception that matters.
I wish that were the case but I suspect it will blow over. Perhaps we can thank Trump (at least in part) for making blow-over-ability a new (and for me highly unsavoury) fundament for tactics. I cant see clothes punters turning their noses up at the door because of that and investors will just see it as free money given the business is solid. May be a risk of a massively influential group mounting some sort of wage subsidy boycott movement, but even that would only last until the next big talking point, e.g. Greenland melting (HLG wetsuits?).
Even though Mander uses a scale on his chart that exaggerates the decline in HLGs margin the impact on the F20 result was $3.4m (negative) ...without that profits would have been up on F19
Not as bad as F19 when declining margins had an adverse impact of $3.8m
For what's it worth historical margins shown in my chart -- maybe a trend of lower margins developing but over time margins have been increasing.
I'll leave it to beagle to mention exchange rate
Only time will tell
Not my scale :-)! The NZH do the graphics...I should have mentioned the longer term trend though.
I think you've picked up the point I was trying to make - there is a margin impact between F19 and F20.
Interesting you didn't see it as bullish...bit of a worry! Part of the message should have been its a great stock to hold in these current times...I think they've done a stellar job on their business.
Not my scale :-)! The NZH do the graphics...I should have mentioned the longer term trend though.
I think you've picked up the point I was trying to make - there is a margin impact between F19 and F20.
Interesting you didn't see it as bullish...bit of a worry! Part of the message should have been its a great stock to hold in these current times...I think they've done a stellar job on their business.
Suppose doing opinion pieces for the general populus does mean one needs to be more ‘general’ and less detailed otherwise they’d not read through to the end. Levels of concentration are falling I’m told
But in opinion pieces the ‘columnist’ is allowed to get excited and say what you said as great stock to hold’ and ‘done a stellar job’
That margin decline is a bit of a worry and not just for F29 but in F19 as well. As I said above the impacts on profit have been significant - $3.8m in F19 and $3.4m in F20 - a real drag on profit growth after the stellar F18 year. Wouldn’t want to see another $3m to $4m hit this year would we
Somebody mentioned the exchange rate doesn’t matter as they are hedged. However worth recalling that the low margin in F16 (see my chart above (or below) was because of hedging going the wrong way and costing them heaps. Hedging not always favourable.....and what was the share price at the end of 2016/2017.
Mr Mander ...I look forward to your column on Oceania
Last edited by winner69; 04-10-2020 at 08:33 AM.
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
Not my scale :-)! The NZH do the graphics...I should have mentioned the longer term trend though.
I think you've picked up the point I was trying to make - there is a margin impact between F19 and F20.
Interesting you didn't see it as bullish...bit of a worry! Part of the message should have been its a great stock to hold in these current times...I think they've done a stellar job on their business.
You made the tortoise v hare contrast in the article (btw great article) between HLG and KMD. Clearly HLG was the winner over the last ten years even it had a low compound growth rate. Looking forward I would be interested to know what's your gutfeel pick. Both are in highly competitive markets.
Mr Mander ...I look forward to your column on Oceania
The resident top gun team are on standby for free consultation regarding this, no vested interest whatsoever Not an easy one to understand at all...probably the hardest of any set of accounts from an NZX listed company whereas HLG used to be one of the easiest before the silly new lease accounting standard.
Last edited by Beagle; 04-10-2020 at 09:51 AM.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
Somebody mentioned the exchange rate doesn’t matter as they are hedged. However worth recalling that the low margin in F16 (see my chart above (or below) was because of hedging going the wrong way and costing them heaps. Hedging not always favourable.....and what was the share price at the end of 2016/2017.
Very true, Beagle. It's sometimes assumed that hedging FX exposures takes care of the risk. Yes, it does, but there's always the cost of the hedge and sometimes the double whammy of hedging away what would otherwise be a favourable FX trend. I'm sure HLG take good advice in this regard but you can never be sure of the outcome. Not since Muldoon and his "creeping devaluation" regime, that is!
Very true, Beagle. It's sometimes assumed that hedging FX exposures takes care of the risk. Yes, it does, but there's always the cost of the hedge and sometimes the double whammy of hedging away what would otherwise be a favourable FX trend. I'm sure HLG take good advice in this regard but you can never be sure of the outcome. Not since Muldoon and his "creeping devaluation" regime, that is!
A, good example is AIR NZ , thought they would need x amount of jet fuel , so hedge for that . Then the rest is history .......
Always good to see how they make more or less money - is it from selling more or margin changes or less expenses or property sales etc.
Gives on an insight how things are tracking and where things might be heading
Its all the table below
See the impact of declining margins in the last 2 years that Mr Mander was referring to ...and profits from property activities have been quite significant
Another insight is that they've only had two boomer years - both when Di was running the show
To me a that signals a business model/strategy content on generating a decent divie for the big shareholders - rather than growing / world domination. Nothing wrong with that as a strategy
I think its interesting and good fundamental analysis but most of you will think its all a load of the proverbial and rather useless nfo
Last edited by winner69; 05-10-2020 at 09:23 AM.
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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Originally Posted by macduffy
Not an easy one to understand at all...probably the hardest of any set of accounts from an NZX listed company whereas HLG used to be one of the easiest before the silly new lease accounting standard.
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