HLG - Hallenstein Glasson

[James108]

Interesting I did not know they had a sales area in a different part of St Lukes, sounds like they did end up with too much inventory.

Any idea on this?

Also I do not think their cash position is just due to over purchase of inventories, Maybe lumpy payment terms to suppliers?? how does $4M extra inventory = $14M in extra payments to suppliers?? They also paid $5.2M in tax (HY15 $4.2M) and tax bill for HY16 was only $2.7M.

[winner69]

Interesting I did not know they had a sales area in a different part of St Lukes, sounds like they did end up with too much inventory.

Any idea on this?

Also I do not think their cash position is just due to over purchase of inventories, Maybe lumpy payment terms to suppliers?? how does $4M extra inventory = $14M in extra payments to suppliers?? They also paid $5.2M in tax (HY15 $4.2M) and tax bill for HY16 was only $2.7M.

Their payables figure is generally quite seasonal and higher in August than February. Movements in payables/creditors in this 1/2 doesn't look unusual

Whatever the cause operating cash flow of $1m is pretty poor considering they need somewhere near $18m a year to maintain the dividend without diving into cash reserves. (Feb cash balance lowest its been for many years)

I just struggle seeing them generating that much cash over the next 1/2 year.

They'll probably reduce the next dividend a bit and even if cash flow doesn't cover it they'll just go back we have confidence in the future trick so can afford it anyway.

[winner69]

Retail Watch (electronic card spend) had Clothing and Footwear category February sales 2.5% on pcp.

Thats reasonably positive even though HLG say their sales are on par

[winner69]

HLG say - Group sales for the first 7 weeks of the season are on a par with last year ......On a more positive note our ecommerce business continues to outstrip growth in bricks and mortar stores, with sales for the first 7 weeks of the season up 38%.

Annual report says ecommerce sales were just over 5% of total sales.

Umm - with ecommerce up and the total flat means bricks and mortars DOWN (by at least 2% which is not good)

[percy]

This is what I observed at St Lukes Mall a couple of weeks ago. Their revamped Glassons store was close to empty, but the their sale area (in a different area of the mall) was very busy. Everything in the sale area was $10. Now I would expect that that stock is being sold off at way more than 40% off. Perhaps 50-80%

So was their sales area taking customers away from the proper store?
I think they might have been better to offloading the stock to charity.

Trying to move old/slow moving stock in retail is very difficult.
In my bookshop I used to put a table out the front store.
Price the stock to sell within a week and dump any books unsold.
When I had a toy shop I would have a pre Xmas sale at the end of November,and clear my bad buys before Xmas.
Now with my home based book selling I take all my old/dated stock stock to my friend's Paper Plus.I remove all price stickers and tell him to price it to clear.We go halves in what he gets for it.Saves dumping fees.!

[GR8DAY]

Last week I think to pick up a mighty juicy dividend.....a whopping 13.5cps! (one of the best yields on the NZX I believe?)........work that out for just 6mnths. Enough to make a banker cry at his desk.

[BeeBop]

Last week I think to pick up a mighty juicy dividend.....a whopping 13.5cps! (one of the best yields on the NZX I believe?)........work that out for just 6mnths. Enough to make a banker cry at his desk.

I am with you on this one BUT for me my spare cash means that it is probable marginal as to whether I can dip in and dip out and I am deciding between HLG and HBY - I don't want to dilute between the two options. HLG looks like a short-term gain on divi but HBY could be a longer term option. I have a bit more reading to do before the market opens on Monday!

[percy]

I am with you on this one BUT for me my spare cash means that it is probable marginal as to whether I can dip in and dip out and I am deciding between HLG and HBY - I don't want to dilute between the two options. HLG looks like a short-term gain on divi but HBY could be a longer term option. I have a bit more reading to do before the market opens on Monday!

Interesting bit of reading you will have to do.
Deciding whether to buy HLG which is a retailer,and HBY who are trying to sell their retail holdings.
Why would they ever want to sell out of retail while you are thinking about buying into it?
Do HBY know something you don't know,or do you know something HBY don't know?
Keep reading.

[Lewylewylewy]

I sold my hlg a few weeks ago. I like them just fine, but the don't fit my new strategy, which is to build a buy and hold portfolio. I figure that at any time within the next decade a popular foreign store could set up in NZ. Besides, I'm not sure hlg have been diversifying and growing

[BeeBop]

Interesting bit of reading you will have to do.
Deciding whether to buy HLG which is a retailer,and HBY who are trying to sell their retail holdings.
Why would they ever want to sell out of retail while you are thinking about buying into it?
Do HBY know something you don't know,or do you know something HBY don't know?
Keep reading.

HLG for me would be a short term dip and out (for dividend only), my concern is that the dip in and out could be negated by a drop in share price (I do note that the NZD has appeared to settle for a while. I already have retail in the UK and yes, it is not doing very well at all except for those that have a good portion of on-line sales and have special offerings. NZ retail does appear to be dreadful: PPL case in point (I chose MHI instead of PPL a few years ago), at the time the metrics were similar but the shopping experiences quite different (PPL over here is a cramped messy shop with no active sales people in it compared to the NZ branches at the same time in NZ). SOmetimes retail does give a good short-term gain e.g. Sainsbury on the London Exchange. This approach helped me get started in my earlier years.

HBY are now a business company rather than what they used to be as a holding company and their retail has never been great. I remember back years ago when they had Hannahs (?), it was a mere run of the mill shoe company and the offerings got cheaper and cheaper, I really can't see any point of difference between the low end shoe stores

HBY certainly have several strings to their bow, their metrics meet my "rules", however, I remain concerned about the contract business and am not convinced by the teleconference confidence in the improvements (but I don't know a lot about it yet). As yet, I have only finished page 3 of the interim result conference, so it will take me a while. The HBY thread is a good one and methinks the price is a good entry price.