HLG - Hallenstein Glasson

[Beagle]

You mention xrate of us 71 cents - its 72 cents today but wheeler is going to stuff the nz economy tomorrow so lets assume 70 cents for the full year

Never mind - the key thing is that margins are likely to be higher in F17. Even if only 2% points higher thats more than $4m extra profit which would take npat back to F15 levels

As you mention other things, like Glassons, have improved and we should see a decent sales boost as well - a couple more million eh

Yes $3.50 share price sometime soon is on the cards

It started that run today eh - positive momentum is good, long may it continue

Okay I won't disappoint you NBT. Here's the thing, for the vast majority of FY16 the exchange rate was 65 cents..even if we assume an average of 70 cents this year, (closed at 72 as you quite rightly said W69) that's a fairly conservative 8% reduction in the cost of purchases so I see their profits exceeding FY15 on the exchange rate alone. Then add in Di Humperies reinvigorating the fashion pizazz into the product line at Glassons and with half normal weather we're off to the races with $20m+ profit in FY17.

Here's what they said this year - Sales up circa $2m to $ 223.5m They mentioned gross profit dropped ~3% to 56.5% so:-
Purchases must have been $97.21m Kiwi, (assume for a minute stock level was consistent and average exchange rate of 65 cents U.S.) Purchases in U.S$63.18m
Gross profit $126.3m = 56.5% - gives $13,5m net profit

Now if we assume an average of U.S. 70 cents this year (which currently looks conservative) those purchases would have cost them $U.S.63.18m / 0.7 = $90.25m Kiwi a reduction of just on $7m so GROSS PROFIT WOULD BE SEVEN MILLION DOLLARS MORE AT US 70 CENTS AND WE ARE CURRENTLY AT 72 CENTS !!

That's $13.5m net profit plus the extra $7m gross profit which flows straight to the bottom line so that's $20.5m for FY17 just based on the currency increase !, assuming all other costs remain the same, but the word seems to be they've been trying to pull costs out of their structure to cope with the lower currency so one would hope we get the full year's benefit of those efficiency gains this year in addition to the above favourable impact from the currency. Then factor in Di Humphries well known positive influence and if the weather starts to be half normal...well we could easily see $4 again this time next year and profit somewhere well north of $20m.

This is too easy mate, for anyone that knows where the dollar has been and its effects on importers and then the subsequent effect when it goes back up (AFTER the company has been vigorously pulling other costs out of its cost structure to cope with the lower dollar)...for anyone with some vision of what's going to happen its clear profitability is highly likely to AT LEAST be restored to FY15 level's if not considerably beyond. This could easily do a Kathmandu style recovery and grow profits by 67% next year to $22.5m !!

On top of that the 15% gross dividend yield which the company has confirmed makes this arguably the most compelling dividend yielding stock on the NZX with a very long and stable track record of paying exceptionally stable and exceptionally high level's of dividends.

[see weed]

Okay I won't disappoint you NBT. Here's the thing, for the vast majority of FY16 the exchange rate was 65 cents..even if we assume an average of 70 cents this year, (closed at 72 as you quite rightly said W69) that's a fairly conservative 8% reduction in the cost of purchases so I see their profits exceeding FY15 on the exchange rate alone. Then add in Di Humperies reinvigorating the fashion pizazz into the product line at Glassons and with half normal weather we're off to the races with $20m+ profit in FY17.

Here's what they said this year - Sales up circa $2m to $ 223.5m They mentioned gross profit dropped ~3% to 56.5% so:-
Purchases must have been $97.21m, (assume for a minute stock level was consistent and average exchange rate of 65 cents U.S.) Purchases in U.S$63.18m
Gross profit $126.3m = 56.5%

Now if we assume an average of U.S. 70 cents this year (which currently looks conservative) those purchases would have cost them 63.18m / 0.7 = $90.25m a reduction of just on $7m so GROSS PROFIT WOULD BE SEVEN MILLION DOLLARS MORE AT US 70 CENTS AND WE ARE CURRENTLY AT 72 CENTS !!

That's $13.5m plus $7m or $20.5m for FY17 just based on the currency increase ! Then factor in Di Humphries well known influence and if the weather starts to be half normal...well we could easily see $4 again this time next year and profit somewhere well north of even $20m.

This is too easy mate, for anyone that knows where the dollar has been and its effects on importers and then the subsequent effect when it goes back up (AFTER the company has been vigorously pulling other costs out of its cost structure to cope with the lower dollar)...for anyone with some vision of what's going to happen its clear profitability is highly likely to AT LEAST be restored to FY15 level's if not considerably beyond.

Disc - Bought several parcels today...low hanging fruit doesn't just grow on apple trees.

Likewise, got 5 parcels at 2.69, 2.67, 2.65, 2.64 and 2.61 in last 7 weeks. Was hoping to keep it quiet until we got AIR out of the way.

[Beagle]

Likewise, got 5 parcels at 2.69, 2.67, 2.65, 2.64 and 2.61 in last 7 weeks. Was hoping to keep it quiet until we got AIR out of the way.

You're at least as cunning as any other bloodhound mate.

This will be great for even better margins going forward. http://www.msn.com/en-nz/money/news/...cid=spartandhp

[James108]

I think short term margins will obviously benefit from a stronger NZ dollar but long term HLG margins will continue to be compressed due to formidable foreign competition entering the market (i.e. Zara, Topman etc.). Just FYI my female friends aged ~25 all rave about Zara and can't wait for more shops to open in NZ.

Despite that I currently hold, seems pretty good value at current levels.

[see weed]

I think short term margins will obviously benefit from a stronger NZ dollar but long term HLG margins will continue to be compressed due to formidable foreign competition entering the market (i.e. Zara, Topman etc.). Just FYI my female friends aged ~25 all rave about Zara and can't wait for more shops to open in NZ.

Despite that I currently hold, seems pretty good value at current levels.

Do you think HLG could buy shares in Zara, Topman etc? then it wouldn't matter. If you can't beat them.....join them.

[h2so4]

Probably buy their own shares.

[winner69]

Okay I won't disappoint you NBT. Here's the thing, for the vast majority of FY16 the exchange rate was 65 cents..even if we assume an average of 70 cents this year, (closed at 72 as you quite rightly said W69) that's a fairly conservative 8% reduction in the cost of purchases so I see their profits exceeding FY15 on the exchange rate alone. Then add in Di Humperies reinvigorating the fashion pizazz into the product line at Glassons and with half normal weather we're off to the races with $20m+ profit in FY17.

Here's what they said this year - Sales up circa $2m to $ 223.5m They mentioned gross profit dropped ~3% to 56.5% so:-
Purchases must have been $97.21m Kiwi, (assume for a minute stock level was consistent and average exchange rate of 65 cents U.S.) Purchases in U.S$63.18m
Gross profit $126.3m = 56.5% - gives $13,5m net profit

Now if we assume an average of U.S. 70 cents this year (which currently looks conservative) those purchases would have cost them $U.S.63.18m / 0.7 = $90.25m Kiwi a reduction of just on $7m so GROSS PROFIT WOULD BE SEVEN MILLION DOLLARS MORE AT US 70 CENTS AND WE ARE CURRENTLY AT 72 CENTS !!

That's $13.5m net profit plus the extra $7m gross profit which flows straight to the bottom line so that's $20.5m for FY17 just based on the currency increase !, assuming all other costs remain the same, but the word seems to be they've been trying to pull costs out of their structure to cope with the lower currency so one would hope we get the full year's benefit of those efficiency gains this year in addition to the above favourable impact from the currency. Then factor in Di Humphries well known positive influence and if the weather starts to be half normal...well we could easily see $4 again this time next year and profit somewhere well north of $20m.

This is too easy mate, for anyone that knows where the dollar has been and its effects on importers and then the subsequent effect when it goes back up (AFTER the company has been vigorously pulling other costs out of its cost structure to cope with the lower dollar)...for anyone with some vision of what's going to happen its clear profitability is highly likely to AT LEAST be restored to FY15 level's if not considerably beyond. This could easily do a Kathmandu style recovery and grow profits by 67% next year to $22.5m !!

On top of that the 15% gross dividend yield which the company has confirmed makes this arguably the most compelling dividend yielding stock on the NZX with a very long and stable track record of paying exceptionally stable and exceptionally high level's of dividends.

Jeez $22.5m for F17 - awesome

With the nzd on fire your forecast could be seen as even more likely - maybe even $25m

Last time they were making anything like this sort of money the share price was closing in on $6 ...yes $6. As bull keeps telling us lower interest rates mean pe expansion so goodness knows where the price is heading

Whatever today's price is cheap ....and comforting to know that getting over $5 is not a new experience - its been there before

[Snow Leopard]

...That's $13.5m net profit plus the extra $7m gross profit which flows straight to the bottom line so that's $20.5m...

Best Wishes
Paper Tiger

Disc: Regard HLG as a sensible investment.

[Raz]

I think short term margins will obviously benefit from a stronger NZ dollar but long term HLG margins will continue to be compressed due to formidable foreign competition entering the market (i.e. Zara, Topman etc.). Just FYI my female friends aged ~25 all rave about Zara and can't wait for more shops to open in NZ.

Despite that I currently hold, seems pretty good value at current levels.

Add H & H to that list. Well isn't the point that they rav about them as as they purchased when overseas..I have not purchased clothes in NZ for at least five years...an't that a problem?

[Beagle]

Add H & H to that list. Well isn't the point that they rav about them as as they purchased when overseas..I have not purchased clothes in NZ for at least five years...an't that a problem?

Not at all Raz. Wouldn't expect an international business class jetsetter who drives high end Euro cars to shop here and especially not at HLG but against all this new competition others have referred to above HLG is still growing its annual sales and with the dollar on fire significant margin and resulting profit expansion looks like a given. I guess that's what being right at a nice mid price point with an extremely well recognised and trusted brand in the apparel trade does for you ! Mr and Mrs Joe Average happy to go to their local HLG store and find nice clothes to try on that they can easily afford.

Crikey Winner, even I didn't know they'd hit $6 before !!! Better buy some more