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."
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