Hallenstein Glassons shareholders smile at result

CLAIRE ROGERS
Last updated 05:00 14/08/2013

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The lingering summer has put Hallenstein Glasson's second-half sales on ice but a profit, dividend and share price boost should warm shareholders' hearts.

Shares in the NZX-listed retailer rose 13 cents yesterday to $5.65 after it reported a 15 per cent increase in first-half net profit to $10.4 million - towards the middle of its guidance range.

The retailer upped its interim dividend by 1.5c, to 16c per share.

But it said second-half sales of winter ranges were so far down 1 per cent year-on-year, due to record warm temperatures on both sides of the Tasman.

Chief executive Graeme Popplewell said that trend was beginning to reverse as the cooler months approached, but warned shareholders not to expect either the retail environment or competition in the sector to ease in the coming months.

He did not give full-year profit guidance.

The first-half profit boost was thanks to solid results from its Hallensteins, Glassons and Storm brands in New Zealand, while the performance of its Glassons stores in Australia disappointed.

Hallensteins - undergoing a brand makeover to become more youthful and fashionable - lifted sales 6 per cent to $43.8m for the period, with net profit up just over 21 per cent to $5.1m. Same-store sales rose 8 per cent.

Glassons New Zealand boosted sales a more modest 2 per cent to $45.9m, but profit shot up 13 per cent to $4.6m.

Storm - its smaller and more fashion-focused womenswear chain - grew sales nearly 40 per cent to $4.7m, with profit up about 73 per cent to $822,000.

Popplewell said it would open its first Australian Storm store - in Melbourne - this year.

Sales through its 20-odd Glassons stores in Australia were up 13 per cent to $21.4m, but same-store sales drooped 1 per cent. The division made a first-half loss of $600,000 but that included $500,000 in restructuring and relocation costs.

Popplewell said Glassons sales in Australia over December and January had fallen below expectations but it remained positive about its prospects there.

Online sales were achieving strong growth and it would continue to focus energy and resource on the channel.

Hamilton Hindin Greene director Grant Williamson said the retailer continued to deliver the goods, with shareholders benefiting from the climbing share price - up over 40 per cent in the past 12 months - and rising dividends.

"They're continuing to improve their margin. Obviously the mark-up on their clothing is pretty impressive."

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- BusinessDay.co.nz

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