Hallensteins profitable but cautious

Transtasman main street clothing retailer Hallensteins Glassons has posted a boost in sales, market share, dividends and after-tax profit for its trading year to August, but remains cautious about retailing recovery for the year ahead.

Revenue was up 4.9%, from $205.48 million a year ago to $215.58 million, while after-tax profit rose almost 15% from $18.28 million to $21.02 million, with increased overall revenue keeping ahead of rising costs.

Shares in Hallensteins, which have risen about 6% during the past month, from $4.44 to $4.70, were up almost 2% following the full-year announcement on Wednesday.

Craigs Investment Partners broker Peter McIntyre said it was a "good result", especially with the Australian division booking sales increases of 9.7%.

He highlighted that earnings per share had risen in a year, from 30.65c to 35.24c, while the full-year dividend was up from 17c to 19c.

Hallensteins should continue to be attractive to investors. It carried no debt, made about $1 million interest from its $22 million net cash in hand, e-commerce had strong growth potential and the company was carrying out firm cost controls.

While total expenses had risen 6.6% to $100 million, gross profit had countered that, having risen 8.83% to $126.3 million, Mr McIntyre said.

Chief executive Graeme Popplewell said although sales in almost the first two months' trading of the present financial year were already up 7% on a year ago, there was little on the retailing horizon which suggested the sector would materially improve.

"Despite historically low interest rates, the consumer remains cautious and has the opportunity with the internet to browse and shop on a truly international stage," he said in a statement to market.


Hallensteins Glassons
$21.02m after-tax profits
Glassons New Zealand: Sales up 2.2%, after-tax profit up 5.4% at $10.68 million
Glassons Australia: Sales up 9.7%, after-tax profit from loss a year ago to $397,000
Hallensteins: Sales up 4.1%, after-tax profit up 17% at $7.76 million
Storm: Sales up 25%, after-tax profit up 46% at $1.32 million


- simon.hartley@odt.co.nz

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