HLG - Hallenstein Glasson

[alokdhir]

https://www.nzx.com/announcements/428724

Great Results and super well managed company ...No doubt !! Very impressive


PS : Only problem ....they called themselves HGH on Top of results ...hopefully. they dont want to become one ...lol

[winner69]

Wow ... great start to 2nd half of year

Group sales for the first seven weeks +8.3% ahead of the same period last year.

Along with a 24 cent divie this news should put a rocket under the share price

[Rawz]

HLG and BGP performing so well in these hard times compared to WHS, KMD & MHJ

[see weed]

yeah, don't know what all the fuss was about, so looking forward to probably another 24c div at over 8% yld. might have to top up more before the heard wakes up

From 22/2/24. Thank you see weed, I never doubted HLG and am not surprised with 24c dividend. Am happy with my holding which is up 4.5 times the dividend amount. Don't forget today is the last trading day before end of financial year.

[Muse]

Good result, albeit saved by a gross margin expansion of 235bps (had GP% remained the same NPAT would have been $17.4m all else equal).

Flat sales but not a bad result in this environment, and some variation within the group. Hallenstein sales per average store down 0.6%, Glassons NZ down 4.4%, Glassons AU up 1.2% or around 2.7% in AUD (average FX moved unfavorably from the PCP). Other income (rent received and interest income) up $392k.

GP margins the main story here. Lower freight costs probably the biggest driver (and have gone up a bit post balance date with all the bother in the middle east), but mgmt also make reference to some proactive steps they've made on sourcing (& probably pricing). This is most evident in Hallensteins although all divisions made gains on 1H FY23, and both Glassons AU and Hallensteins margins were higher than 2H FY23 which was the period when the uptick began. Glassons NZ while on 1H23 improved saw their margins decline from 2H FY23 (although its margins traditionally fall from over this period), and are a bit of a niggle for the group, experiencing long term declines. The chart below tells a good story. Glassons AU looks to be running where it should be, Hallensteins not far away from where it should be, but Glassons NZ still well below its historical margins. They'll be reasons for that but I won't speculate on it here. 2H margins tend to be a bit higher than 1H as well all things equal, particularly for Glassons NZ.

HLG margins.jpg


Cost of doing business (incl. lease interest) per average store up 5.2%, however a decline from the 2H FY23 rate of 8.2%. The main driver to that is total occupancy costs (all up rental and lease expense) per ave store up 7.8%, largely reflecting continued store growth in Australia where the stores are larger and a refurbishment programme that seems to be expanding the average size of the stores. I forget when the 2nd AU distribution centre was launched so maybe a bit of that as well.

Tax expense as % of PBT 29.2%, only a smidge down on prior year 1H of 29.4%. Would have expected more of a decline given the transfer pricing programme bringing AU profits (where corp tax is 30%) into NZ where it is 28%. Probably reflects the underlying deterioration of Glassons NZ and Hallenstein profitability in NZ.

Cashflow was excellent, stock down, and cash up. Inventory looks very lean and while I love the inventory turnover wouldn't be surprise if it corrects. Capex (store refresh and refits) high at $9m.

Dividend identical to last years, both in terms of declared, IC's attached, rwt deducted, and thus gross and net. With regard to the level of imputation, there appears to be a mistake in either the mgmt commentary or the dividend notice. The mgmt commentary says imputed at 45%, the distribution notice implies a 53% level of imputation (section 3 of dist. notice talks to 14.87%, which divided by 28%, is a 53% level of imputation). This is the same as last year 1H FY23. Recall that in 2H FY23 the level of imputation rose to 80.6%, giving a full year imputation of 67.5%.

In terms of outlook, I reckon a good placeholder is ~$11m npat for 2H FY24. February and March, while well up at ~8.3%, are not big trading months in the 2H. February traditionally the weakest month (of February to July), and March a little bit below average. So a lot of water to go under. But a good start.

Last year's 2H dividend of 24cps (and similar imputation profile) a reasonable proxy to work with as well. That would imply 48dps declared, 11.2cps of imputation credits (though there could be some downside risk to this if last years imputation did not prevail), giving 59.2 gross, with 8.3cps of RWT deducted (which will flex up if 2H ICs dont come through).

Just my thoughts. Do your own research, & come to your own views. Retail remains a fickle beast.

[Antipodean]

https://www.nzx.com/announcements/428724
...
PS : Only problem ....they called themselves HGH on Top of results ...hopefully. they dont want to become one ...lol

HGH = Hallenstein Glasson Holdings Limited = the company name so not a mistake.
Just not their NZX ticker.

Agree would be better to avoid any confusion that the two are related though.

[winner69]

Muse ….good stuff there

Glassons AU increased market share as well

The 45% partially imputed comment comes from computation credits of only 4.2 cents being applied instead of a full 9.33 cents if they had enough credits…. So 4.2/9.33=45%.

Suppose how you interpret the words ‘partially imputed’ but they haven’t made a mistake.

[Snow Leopard]

...
Dividend identical to last years, both in terms of declared, IC's attached, rwt deducted, and thus gross and net. With regard to the level of imputation, there appears to be a mistake in either the mgmt commentary or the dividend notice. The mgmt commentary says imputed at 45%, the distribution notice implies a 53% level of imputation (section 3 of dist. notice talks to 14.87%, which divided by 28%, is a 53% level of imputation).
...

Almost 45% of the 24c [ 10.7774c ] is imputed giving you 4.1912c of imps.

4.1912c of imps is 14.87% of the gross amount [ 24c + 4.1912c ].

So all is good, but confusing.

[Muse]

Almost 45% of the 24c [ 10.7774c ] is imputed giving you 4.1912c of imps.

4.1912c of imps is 14.87% of the gross amount [ 24c + 4.1912c ].

So all is good, but confusing.

Got it, per edited post below. thanks.

[Muse]

Muse ….good stuff there

Glassons AU increased market share as well

The 45% partially imputed comment comes from computation credits of only 4.2 cents being applied instead of a full 9.33 cents if they had enough credits…. So 4.2/9.33=45%.

Suppose how you interpret the words ‘partially imputed’ but they haven’t made a mistake.

yes got it now. I had calculated in haste the level as 14.87%/28% = 53% giving the level imputed. But adjusting the formula to gross up, would have taken ICs per share to 9.333333cps, taking gross dividend to 33.3333. and thus the 4.2IC/ps divided by the 9.33333 is the 45%. got it.