HLG - Hallenstein Glasson

[winner69]

The reduced margin had a negative impact on NPBT of $3.2m - freight costs they said

Briscoes, Warehouse and Premier had same issues. Those three all say there was less need to discount etc. Overall impact significant increase in GM %

If HLG had followed suit and increased margin like those three mentioned NPBT would have been $6m to $7m higher.

Bad luck or not so good supply chain management / pricing mechanisms?

[alokdhir]

Maybe time to get out of retail stocks ....Their best time or lucky time maybe coming to an end ...WHS / HLG

But how will I know ....just a inkling

[nztx]

Certainly could be a peak from post Covid sales in the past 6 months trading period

It would be interesting to see what normalised figures projected forward look like now ..

HLG / WHS are possibly the last I would be looking at stepping too much out of ..

Put it this way- show me anything better - if there is anything on the board at all - coming close ..

[Beagle]

You're forgiven. I seem to recall you were focused on the weight of the bikinis those hot young things were modelling on the website, and failed to recognise that not all of HLG's merchandise (they call it murch these days apparently) is so minimalistic...easy mistake ;-)

Maybe if they made all their garments smaller, especially the bikini's that would help

The first 7 weeks of H2 sales are up 18% is awesome. The announcement sort of hinted that this is against a Covid related period last year.

But last years sales were +3.8% on pcp so Covid hadn’t really impacted

One could assume that there’s some real solid organic growth over the last 7 weeks ....even stronger growth than overall H1 sales that had heaps of catch up in them

Pretty cool eh

can someone please tell me what the dividend yield is now, p.a.?

See below

The reduced margin had a negative impact on NPBT of $3.2m - freight costs they said

Briscoes, Warehouse and Premier had same issues. Those three all say there was less need to discount etc. Overall impact significant increase in GM %

If HLG had followed suit and increased margin like those three mentioned NPBT would have been $6m to $7m higher.

Bad luck or not so good supply chain management / pricing mechanisms?

I think its clear they were far from top of the class in managing supply chain issues in the previous half. As we've discussed before HLG have the best stock turn of any of the listed companies and I think their just in time systems which must be crucial to getting such excellent stock turn have worked against them with longer lead times and shipping delay's. No big deal going forward but yes, as you know I was expecting about $24m so the extra airfreight costs definitely hurt.

A one off disappointment with logistical issues of perhaps $4m is 6.7 cps in value if they had of managed the situation more optimally. It is what it is. First time they've disappointed in this regard. Show me a company that executes perfectly ALL the time or such compelling metrics and I'll buy that other company too.

Looking forward as we like to do the current ~ 18% sales growth is against a backdrop of short lockdown's on both sides of the Tasman

Events subsequent to balance date
On the 15th February 2021 Auckland re-entered Level 3 lockdown. The Group announced it had
closed thirteen Hallenstein Brothers stores and twelve Glassons stores in Auckland until 17 February
2021. In Melbourne there were eleven Glassons stores closed with the recent lockdown from the 12th
February for five days.
On the 28th February 2021 Auckland again re-entered Level 3 lockdown. The thirteen Hallenstein
Brothers Auckland stores and twelve Glassons Auckland stores were closed until 7 March 2021.

You've previously noted disappointing margins at Glassons Australia but I see that's been well and truly fixed and they're looking at opportunities for expanding their footprint there.
Interestingly Glassons Au grew sales significantly, up 26.9% (10.9% in the PCP), but net profit was up 71%.

Assuming they pay another 23 cent final dividend that's 46 cps fully imputed = 46 / 0.72 = 63.9 cps gross which is a forecast FY21 gross yield of 8.5% at $7.50 plus you get 23 cps back next month.

I think this is a good solid hold for ongoing growth and the yield. I think $35 - $40m is achievable for FY21 which at the mid point is $37.5 = 63 cps which puts HLG on a forward PE of 11.5 (based on theoretical ex divvy price of $7.27). Makes it a very cheap stock considering its proven multi year track record of growth in Australia.

[bull....]

mr wong is not happy

University of Auckland accounting professor Jilnaught Wong spoke out last year about NZX-listed companies he believed had taken advantage of the high-trust wage subsidy system. Following public pressure, retailers including The Warehouse Group and Briscoe Group repaid their wage subsidies after trading picked up.

https://www.stuff.co.nz/business/124...bsidy-decision

anyway apart from glassons good results the rest was not that good , declining sales and margin while all other retailers are killing it on margin .... very poor outcome for hlg .

[nztx]

mr wong is not happy

University of Auckland accounting professor Jilnaught Wong spoke out last year about NZX-listed companies he believed had taken advantage of the high-trust wage subsidy system. Following public pressure, retailers including The Warehouse Group and Briscoe Group repaid their wage subsidies after trading picked up.

https://www.stuff.co.nz/business/124...bsidy-decision

anyway apart from glassons good results the rest was not that good , declining sales and margin while all other retailers are killing it on margin .... very poor outcome for hlg .

Perhaps Mr Wong should pull his head in & concentrate on getting some Stewdents the Top Level Edumecation they deserve
& are expecting from his Employer ?

How much are the Taxpayers subsidising Mr Wong's fat screw while the Country is on low imported student numbers ?

Perhaps he should refund 75% of it back into the coffers ?

[Beagle]

That's the problem with academics...they don't live in the real world. They believe the world should be some utopia where theoretical conceptuality applies.
I have no time for academics like this that have never had to get their hands dirty or get out of their ivory towers.

[850man]

That's the problem with academics...they don't live in the real world. They believe the world should be some utopia where theoretical conceptuality applies.
I have no time for academics like this that have never had to get their hands dirty or get out of their ivory towers.

I put career politicians in the same category Mr Beagle

[Beagle]

I put career politicians in the same category Mr Beagle

I couldn't agree more, especially most of the current crop of "rocket scientists"

[gbogo]

If I was a smart as you, maybe .. but clearly not, which is why I am asking.. NZD says 7.22% but that's what it said yesterday and I don't trust NZX very far anyway. An Interim Dividend of 23c is about 3.1% @ $7.50 but how would you account for a final dividend?

That is something you can easily figure out yourself, I believe NZX even does it for you.

Pleased with result, particularly the trading of the first 7 weeks of this half, which I THINK encompasses the period just before we locked down last year.