HLG - Hallenstein Glasson

[Rawz]

Interesting post FM, thanks for sharing!

[Muse]

but is finished inwards product shipped direct from manufacturer into Aussie & NZ separately ?

To ship here then sort out what goes over yonder would be pretty costly & inefficient with
transhipping .. yonks ago shipping across the tasman was pretty expensive & problematic
& cheapest option to send direct to NZ and Aussie from manufacturer. I wouldn't think that situation has changed much

It may be that Aussie markets are able sustain higher achieved markups & GP than NZ, which
if the case means only recoveries of some expenditure apportioned between retail divisions on either side
of the ditch are possible ?

Yes finished products no doubt are shipped directly to end location wherever possible (doubling handling is avoided at all costs in apparel) and yes appropriate policies can be implemented for that, as it is the norm. I've seen these sort of policies reviewed by both IRD, ATO, and other jurisdictions.

Its hard to know looking from the outside based on segment notes in stat accounts what is happening. I'd wager HLG have a deminimus level transfer pricing going on, with that not captured in COGS but in the implied 'other expenses' within segment stat accounts. But with both companies having nearly the same PBT % margins, I don't think HLG is charging Glassons Pty enough for the services rendered. And whatever the case actually is (as I am just speculating based off some segment notes), if HLG really were content to just be a 'steady as she goes divy stock' for kiwis, they should centralise more staff in NZ from AU, charge for it, and maximise the level of IC's available to new zealand shareholders.

But I prefer the focused V2 'go hard AU' gameplan as a way to maximising total shareholder returns even if dividend yields are diminished for NZ shareholders. I follow a number of aussie comps that trade in very similar segments to glassons I'll post about later. Some of which may interest you in your own right, depending on your appetite for apparel/retail in current environment.

[percy]

Love the fine logistic talk.
Yet we must remember where the stock came for the online sales when the Aussie stores were closed because of Covid.
Yes you have guessed correctly....From the closed stores...

[Waltzing]

Although not pertinent to public companies recent polling of SME showing now confidence is low might give a hint to how the wider consuming public is also thinking.

SME confidence down sharply as outlined in a stuff article in its business section.

[Beagle]

Great post FM and I agree 100% with your suggestion of faster store rollout of Glassons Au but HLG is a very traditional company, as you would expect being N.Z's oldest listed company, and run very conservatively.

Its hard to estimate to what extent future dividends will be imputed because to do that you need to make a call on N.Z profitability of Hallensteins and Glassons N.Z. v the group but the trend down is clear and the most recent level of imputation, (about 47%) exceeded the relative percentage of N.Z. store profitability so they used up some existing ICA account credits with that most recent dividend and its safe to say they imputed it as much as possible this time. That said N.Z. store profitability might have reached a cyclical low in the most recent half so maybe somewhere between a 25-40% level of imputation is a reasonable estimate of what's possible going forward.

What's crystal clear is that the good old days of full imputation credits are nothing but a fond memory now.

[Beagle]

Hallensteins CEO given the boot. Performance not good enough. (Says it in more politically correct words than that but that's the gist of it I reckon).
Possibly, in my opinion anyway, a good example of the "Peter Principle" promoting someone and keeping promoting them until they get to a position where they're not really up to the task. https://www.nzx.com/announcements/390714

[winner69]

Hallensteins CEO given the boot. Performance not good enough. (Says it in more politically correct words than that but that's the gist of it I reckon).
Possibly, in my opinion anyway, a good example of the "Peter Principle" promoting someone and keeping promoting them until they get to a position where they're not really up to the task. https://www.nzx.com/announcements/390714

Said the group needed to reduce head count as wage bill was spiralling out of control ……like Oceania lol


Quite a few more heads need to go I reckon


And maybe some stores to close


Grow profits my cutting expenses ….not always sustainable

[winner69]

Hallensteins CEO given the boot. Performance not good enough. (Says it in more politically correct words than that but that's the gist of it I reckon)........

Then again Jason might have thought hard and long about Hallensteins future prospects and decided that it is really a dog without any real prospects of ever being successful ..... no growth over many years and declining profits

Probably thinks putting his 'energy into other opportunities' will be quite rewarding for him..... that's what this 'Great Resignation' trend results in

[LaserEyeKiwi]

11 days notice of a CEO resigning. Obviously much more to that story.

[RTM]

https://www.asx.com.au/asxpdf/202204...6j8dj72700.pdf

Take a look at this one...sounds pretty brutal !