HLG - Hallenstein Glasson

[winner69]

Beagle mentioned HLG's stockturns the other day

In F20 HLG managed 4.9 stockturns. Pretty good but not as good as they have achieved in the past.

Relative to their peers they are best - Briscoes manage 4.7 turns / Warehouse Group 3.9 turns / Kathmandu a miserable 1.8 turns

But where HLG really excel is that for every $1 of stock they generate nearly $7.00 of Gross Margin. Thats a great return on their investment in stock.

Briscoes manage just over $3 gross margin per $1 of stock / Warehouse Group about $2.00 and Kathmandu about $2.70

Easy to see who has the best cash generating and return on investment model eh ....and they have a business model that seems to run by numbers ....buy something for $1 and sell it for $2.50 and keep expenses to about 46% of sales and hey presto you can give shareholders about 7 cents out of every buck that goes through the cash register as a divie --- year in and year out

Just reinforces my view their main strategic aim is to ensure decent divie every year rather than growth.

Cant complain about that."

[Snow Leopard]

Updated some HLG stuff

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

Looks like a drunken walk along the path of profitability.
Which would mean a lurch to the downside coming up

Disc: #3 in SL-NZX portfolio

[Beagle]

Classic dividend hounds stock. Super high and reliable fully imputed dividends. What's not to like with interest rates at unprecedented lows and heading lower still.

Looking forward to my 24 cent fully imputed dividend in time for Christmas and another 24 cents in April 2021.

[Waltzing]

If you do get a sell off its a back up the truck... that growth comes from waiting for the sell offs. The dividend is stunning!

[winner69]

A bit more from my HLG files


Numbers at a group level look OK but it’s always interesting to look at profit in each of the segments they report and how that changes over time.

Table shows the change in profit by segment each year for the last few years. Red cells are when profit declines from prior year, green when profits increase.

Main observation is that rarely does HLG ‘fire on all cylinders’. Even Glassons AU didn’t really improve profitability in F19.

A bit of history -

• Storm sold during F18
• Di got Glassons NZ and AU back on track through F17 and F18 and there’s only been modest profit growth the last 2 years
• Hallensteins has seen declining profits in recent years. In spite of things apparently ‘improving’ early in F20 this was one of their worst years for a while.
• Property sales / revaluations was main reason for improved group profit in F19 and helped support F20 profitability.

That’s all historical - wonder what the future brings?

[Filthy]

Main observation is that rarely does HLG ‘fire on all cylinders’.

very hard to get your product mix 100% correct. fashion and styles change so fast, that by the time you go from concept & design to manufacture, ship and display items in-store, the customer base has moved onto the next latest trend that their insta influencers are wearing. they do a pretty damn good job though and I would never expect them to nail everything - the clothing market is just not conducive to that sort of thing. great summary though W69!

[peat]

it’s always interesting to look at profit in each of the segments they report and how that changes over time.

Us men need to buy more clothes.

[DazRaz]

Us men need to buy more clothes.

What? The old ones haven't worn out yet!

[Beagle]

Hallensteins profit in FY20 definitely affected by Covid...men less inclined to buy clothes on the internet.

FY21 Year to date sales up ~ 11% with Melbourne and Auckland having been in lockdown. The future looks very promising to me.

[Jantar]

Us men need to buy more clothes.

I called into Hallensteins in Blenheim last week to get a couple of nice summer weight jerseys. They had no jerseys in stock at all, just some hoodies, and that is not what I wanted. Went to Farmers and got two nice light weight Merino ones.

I hope the Blenheim store is not indicative of the whole country.