The ol safety in numbers thing eh...
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Looks like everyone buying in for the dividend
I guess he's got to sell something. A few years ago it was finance company debentures!Quote:
FWIW Chris Lee had a fair bit to say about older investors having to take on board some risk to maintain their income level's in his most recent newsletter and a good mention of REIT's.
;)
Well I didn't buy....couldn't make the risk/return work on my parcel and I need to believe in the stock long-term. I had wanted to by HLG some time ago when they were around 3.30 but the numbers didn't add up at all - As an absolute basic for me, the div was more than the eps. So this gave me no long term comfort. Sold a few shares this past week that have had great runs and am now in to an adjusted set. Will be missing a few divs. But good enough return is a good enough return for me! Now I just need my PGW to do its thing!!!!! Bah humbug
agree....problem is I bought PGW a long time ago...have nearly neutralised with divs but not ready to sell that holding yet...will give it a bit more time as farming will come back in favour....if no performance after a while then I will move out of it but only after I have put some brain work into the move. Just bought some HBY.
Sad thing is, I spent a long time mulling over PGW at the time and I liked what I read then - had been in an out over the years.
Heading to 310 when you posted this
If they were buying for the dividend bit of time for a recovery
The guys down the bowling club got their dividends and decided to cut their losses and sold out of HLG. Almost en masse they have bought into AIR as they heard it was paying huge dividends.
From Retail Watch - card transactions
For March Clothing & Footwear category down 2.4% on March last year (total overall spend up 3.1%)
Rag trade struggling a bit?
What punters thoughts on the return of Di?
Hope her luck has changed from patch days
Marked Price Sensitive so must be good news
LOL I like your dry sense of humour mate.
http://www.nbr.co.nz/article/prodiga...sons-cs-187524
Her results at PPL are hardly what anyone would call "stellar" are they ! The chain could hardly be trading worse could it !
Suppose all the trendy women are listening to Hillary Barry and buying online. Blame Paul Henry's new Breakfast chat show for that eh, they seem to make a good team.
From that article - Analysts put the continued poor results at Glassons partly down to this high management churn.
Does the return of the prodigal daughter count as churn?
Returns policy at Hallensteins obviously quite generous (though retailers don't usually take back used goods unless they obviously broken)
Di - the $6m wonder woman
Immediate response to the announcement
....Mrs. Market likes it. I guess they wouldnt have got her back unless she had a positive history there already.......if she can turn Glassons around that should impact the bottom line many percentage points. All they need now is for the $NZ to continue strengthening and all might be rosy.
Also from that article...So she reckons she's learned lessons from her time away from HLG...one presumes at PPL. What lessons are those one wonders considering PPL is on its knees trading at the behest and pleasure of the bank after her tenure there. I hope she proves me wrong but I am cautious.
$Kiwi is slightly above the 20 year average so called Goldilocks level. Retailers better get fit and get used to this new normal IMO.
Yes NZD slightly ab0ve average at 67 US
Problem being that its +/- average for only 15% of the time as it cycles from high to lows
Pundits say it will go lower ....hmmm
Yeap, I've put the saddle away, not looking for another ride around the paddock anymore.
Graeme said this in March 'The record temperatures in both New Zealand and Australia have not been conducive to early autumn sales'
Still seems very warm for autumn coming on winter
Wonder how sales are going?
One thing though - if the huge overstocks were summer gear they have had longer to quit it. That's good
On the other hand if it's winter gear might be a big problem if we don't have a winter this year
Wonder what the weighting of Hallensteins / Glassons trans-seasonal stock is?
Whose the first going to be to have to have a winter clearance sale before winter begins is whats being asked
http://www.smh.com.au/business/retai...04-gommlw.html
Probably a further drag on Glassons Aussie already pretty mediocre performance
Logistics of clothing retailing is you must clear stock for incoming stock.
Unless we get a very cold snap soon, I would think clothing retailers "appear to have a problem".
A very big one.!
A year of "the clearance sale."
That means a year of dismal earnings.
The cold snap came just at the right time [& it certainly is cold],I think you will find these clothing companies will do very well in the next few months.You watch the educated buyers come in & the shares go up.The other thing to remember is the kiwi dollar has had a bit of a lift lately which will also help their cause for the coming season [you really dont have to be a rocket scientist to work these things out].
You would think that if Kathmandu are creaming it at the moment then HLG should be as well.
Share price pretty low at the moment, struggling to rise above multi year lows
Topped up on yesterdays close at 2.65. Couldn't resist the 30c div and 11%+ yield:).
Retail on a roll in NZ. Stats Electronic Card Spend figures for June exceeded even the most optimistic forecast.
Westpac say -
Spending on retail cards surged in June, with a 1.2% gain over the month. While we had expected some bounce following last month’s Easter-related weakness, the gain seen in June was well above even the most optimistic market forecast.
Gains in spending were widespread in June. There were particularly large increases in spending on durables (likely related to the continuing strength of the housing market) and apparel, possibly assisted by the recent turn in the weather. The strong tourism season also appears be boosting spending with a solid increase in spending on hospitality.
HLG will be doing more than OK - profit upgrade coming
.......gotta be happy chappy's at HLG right now. What with the cold damp miserable weather which should see the woolly winters flying off shelves AND the high KIWI$.........they must be printing money right now surely. BIG divi cant be too far off either? HOLDER
Winner,
I've rejigged my numbers for the full year and have the following (could have egg all over my face as we could see a Trading update any day). I'm banking on expenses falling about $3m from H1 to H2 like they did in 2015 to partially compensate lower gross margin from lower NZDUSD which knocks GP by about $4-5m.
FY Implied 2H
Sales: $225m $112.6m
GM: 56.2% 55.6%
Expense: $107m $52.1m
NPAT: $14-14.5m $7.2-7.7m
A tad lower than last years $17.4m
Everybody expecting a ****ty result so your $14.5m would be a stunning result and all will be honky dory again and the share price will rocket over $3 again ...and more
Seeing retailers appear to doing very well at the moment with the economy on fire and all that one would hope that they don't report something like $13m npat - that indeed would be bad
Hard to figure with other retailers doing well why Mr Consistent in the apparel trade has a blot on their almost impeccable track record ?
A one off and management working hard to restore lustre or systematic of something of an evolving trend affect the middle price segment of the rag trade ? Dividend hounds will be hoping its the former and regular XXL sized feeds will resume soon.
Hard to read the tea leaves on this one. This hound loves a good divvy feed but cautious on this one. as I get the sense the amount of dog food coming might be trimmed back a bit for a while / perhaps more than a little while ?
Not me. I recall saying to you that if they came in below $13m (the break even line on our pint bet) that they'd see $2.50. As its turned out nearly got there anyway on poor sentiment.
This is result is hard to pick. No market updates would imply something in the $13-15m range so anything outside that they should really be updating the market imho.
Went to Hallenteins recently to shop for some t-shirts on special.
Wasn't very impressed by their $10-$15 range, because they went down too long past the waist. Same thing with their long sleeve tees, but they went down even longer.
I went to the Warehouse and bought some $5 t-shirts instead.
Glasson opening new shop in Sylvia Park?, noticed the other day as walking past all those flashy shops. Big posters of Glasson Models covering all the construction protective barrier walls while the renovation is going on.
Disagree there. The hallensteins shirts are so thin now they look tatty after a few washes (just like elsewhere). The long tshirts are the BLVD Kings brand ,style, some with 15cm zips on each side; great if you want to look like a 61 year old gangsta:). I buy their tshirts because some of the designs on the panel tshirts(printed/patterned all over not just a small block print on the front )are really creative and cool. In fact if anyone has the Park brand with the Tide design on it and want to sell please pm me. I emailed the company asking for 10 but they'd discontinued it after two successful years.
I buy all my work business shirts, suits and trousers from hlg and they are great quality, smart looking plus great value superior to whs in my opinion
Pre-release looks OK overall:
Sales: $223.5m, GM: 56.5% NPAT: $13.5m
Dividend to be maintained at historic levels suggests a final of 16.5cps which means a payout of 30cps for the year v eps of only 23cps. Clearly management are confident of cash flows remaining strong & stronger than npat/eps. Also state unfavourable FX hedges have been used and future FX is at better rates and Glassons doing better since Di came back. Reads a bit like a FY17 upgrade of sorts although far too early to make predictions about FY17.
Following sentence taken from their trading update, had to laugh at the highlighted bit doesn't two negatives make a positive?? Just an observation nothing cynical...
"Net profit after tax is projected at approximately $13.5 million, a decrease of -22% on the
prior year ($17.386 million.)"
The dividend is often more than free cash floe - obviously see consistency as important even if runs down cash reserves a bit
The $13.5m a bit lower than your estimate of the $14.0m-$14.5 a week or so ago - but as long as you are happy that's OK
Long time ago my forecast was $13.3m (with a $10m worst case) so I reckon I pretty clever. Somebody has to say so - nobody else does
Updated an old chart
The market over the years has been very consistent at how it has 'valued' HLG hasn't it
If you believe next years NPAT will recover to 2015 levels (+30% odd) then todays price is a SCREAMING BUY
One for the value hunters or dividend hounds maybe?
The three factors they mentioned as impacting this year's results have all be fixed or ameliorated. Exchange rate was around John Key's goldilocks 65 cents for quite some time there and that's obviously changed materially and the start of winter was the warmest I can ever recall and oh my goodness how that's changed !! Looks like Glasson's its getting is product offer sorted too.
With other clothing retailers like Kathmandu doing well this year's result is increasingly looking like the bottom of the cycle.
Good that the top line has been maintained which gives me confidence they can bounce back from here. Signalling final dividend will be at historical level's has this hound assessing the future deliveries to his food bowl.
Last year we had 16.5 cps final and 13.5 cps interim, total 30 cps fully imputed so at $2.70 that's a net dividend yield of 11.11% or a gross yield of 15.4%.
This reporting season is ALL ABOUT THE OUTLOOK and this is a prime example in my opinion. Outlook materially better than the expected result. How many other companies pay you a consistent 15% divvy to wait for improved results ?
There's definitely seriously good value here for dividend hounds !!
Got to thinking, (over a good steak and cheese pie for lunch) a 6 cent rise in the Kiwi from 65 to 71 U.S. (9% increase) is going to do wonders just in itself in regard to their circa 3% reduction in gross profit margin.
At the very least this in itself should easily restore gross profit margins to previous level's, if not considerably improve them from historical norms and then with things starting to pump at Glassons if we had half normal weather next year, gosh, we could easily see this back to $3.50 plus.
45%+ total shareholder return over the next year would not surprise me in the slightest. Nice clean and tidy balance sheet and they're good operators who slipped once and the market has punished them too harshly.
I can easily see $20m plus next year just on the currency shift alone ! GENUINE VALUE HERE !! Its ready to take off !!
http://movieneon.com/titles/1987/wal...acters/hooker/
You mention xrate of us 71 cents - its 72 cents today but wheeler is going to stuff the nz economy tomorrow so lets assume 70 cents for the full year
Never mind - the key thing is that margins are likely to be higher in F17. Even if only 2% points higher thats more than $4m extra profit which would take npat back to F15 levels
As you mention other things, like Glassons, have improved and we should see a decent sales boost as well - a couple more million eh
Yes $3.50 share price sometime soon is on the cards
It started that run today eh - positive momentum is good, long may it continue
Okay I won't disappoint you NBT. Here's the thing, for the vast majority of FY16 the exchange rate was 65 cents..even if we assume an average of 70 cents this year, (closed at 72 as you quite rightly said W69) that's a fairly conservative 8% reduction in the cost of purchases so I see their profits exceeding FY15 on the exchange rate alone. Then add in Di Humperies reinvigorating the fashion pizazz into the product line at Glassons and with half normal weather we're off to the races with $20m+ profit in FY17.
Here's what they said this year - Sales up circa $2m to $ 223.5m They mentioned gross profit dropped ~3% to 56.5% so:-
Purchases must have been $97.21m Kiwi, (assume for a minute stock level was consistent and average exchange rate of 65 cents U.S.) Purchases in U.S$63.18m
Gross profit $126.3m = 56.5% - gives $13,5m net profit
Now if we assume an average of U.S. 70 cents this year (which currently looks conservative) those purchases would have cost them $U.S.63.18m / 0.7 = $90.25m Kiwi a reduction of just on $7m so GROSS PROFIT WOULD BE SEVEN MILLION DOLLARS MORE AT US 70 CENTS AND WE ARE CURRENTLY AT 72 CENTS !!
That's $13.5m net profit plus the extra $7m gross profit which flows straight to the bottom line so that's $20.5m for FY17 just based on the currency increase !, assuming all other costs remain the same, but the word seems to be they've been trying to pull costs out of their structure to cope with the lower currency so one would hope we get the full year's benefit of those efficiency gains this year in addition to the above favourable impact from the currency. Then factor in Di Humphries well known positive influence and if the weather starts to be half normal...well we could easily see $4 again this time next year and profit somewhere well north of $20m.
This is too easy mate, for anyone that knows where the dollar has been and its effects on importers and then the subsequent effect when it goes back up (AFTER the company has been vigorously pulling other costs out of its cost structure to cope with the lower dollar)...for anyone with some vision of what's going to happen its clear profitability is highly likely to AT LEAST be restored to FY15 level's if not considerably beyond. This could easily do a Kathmandu style recovery and grow profits by 67% next year to $22.5m !!
On top of that the 15% gross dividend yield which the company has confirmed makes this arguably the most compelling dividend yielding stock on the NZX with a very long and stable track record of paying exceptionally stable and exceptionally high level's of dividends.
You're at least as cunning as any other bloodhound mate.
This will be great for even better margins going forward. http://www.msn.com/en-nz/money/news/...cid=spartandhp
I think short term margins will obviously benefit from a stronger NZ dollar but long term HLG margins will continue to be compressed due to formidable foreign competition entering the market (i.e. Zara, Topman etc.). Just FYI my female friends aged ~25 all rave about Zara and can't wait for more shops to open in NZ.
Despite that I currently hold, seems pretty good value at current levels.
Probably buy their own shares.
Jeez $22.5m for F17 - awesome
With the nzd on fire your forecast could be seen as even more likely - maybe even $25m
Last time they were making anything like this sort of money the share price was closing in on $6 ...yes $6. As bull keeps telling us lower interest rates mean pe expansion so goodness knows where the price is heading
Whatever today's price is cheap ....and comforting to know that getting over $5 is not a new experience - its been there before
https://cobornsdelivers.files.wordpr...nd-oranges.jpg
Best Wishes
Paper Tiger
Disc: Regard HLG as a sensible investment.
Not at all Raz. Wouldn't expect an international business class jetsetter who drives high end Euro cars to shop here and especially not at HLG but against all this new competition others have referred to above HLG is still growing its annual sales and with the dollar on fire significant margin and resulting profit expansion looks like a given. I guess that's what being right at a nice mid price point with an extremely well recognised and trusted brand in the apparel trade does for you ! Mr and Mrs Joe Average happy to go to their local HLG store and find nice clothes to try on that they can easily afford.
Crikey Winner, even I didn't know they'd hit $6 before !!! Better buy some more :t_up:
[QUOTE=nextbigthing;631775]Not by Christmas by any chance is it Winner? Gee with HLG going to $3.50, HBL up to $1.60 and SCL headed to $5 (all by Christmas), isn't it a great time to be alive.
Anyway, Roger, back to your turn to push this thing up the [I]ramp.
........HAHA, nicely put NBT.
HLG may be growing annual sales but far below national clothing footwear and accesory spending. HLG are losing market share and it is having an impact on margins as they discount to try to retain market share.
Any short term gain from the NZD aside I see the business as stagnant or declining.
Well said, I have ceased being a customer a while back and the brand is overlooked by the young who spend, ramp up guys as I overlooked selling this a while back and may look at timing an offload, some here must be in a hole from last year on this one me thinks:)
http://hallensteinglasson.co.nz/onli...2-b13056f0b556
Consistent record of very high divvy's. 2015 was 30 cps IIRC and we're on track for a repeat this year. With the expansion in margin with the higher Kiwi I'm forecasting a return to 33.5 cps fully imputed for FY17 which at $2.80 gives a gross dividend yield 33.5 / 0.72 = 46.528 / 280 = 16.62% !! Beagles are glutinous by nature. "There's little here to support a long term hold" Hmmm, I suspect many a dividend hound would disagree with that. Must be the highest dividend yielding stock on the NZX surely !
"Glutinous" = sticky like glue. Do you mean you are looking for a long-term hold? I've held HLG for a long time for the dividend. Profitability may come and go with the exchange rates to some extent but long term it needs to be relevant and competitive in the market.
gluttonous my bad on the spelling. Means like to drink and eat excessively, greedy for large divvy feeds.
I think there is long term value in HLG at current prices but I question those heralding a return to $5/share, it may happen but I would have sold out long before then.
I agree. I hold at an average of $3.02 and think the stock is worth around $4.00 but talk of $5-6 is pie in the sky to me. Too many variables that can go wrong like the NZD, rising rents and more competitors etc for this to justify $5+ like it did a few years ago. But 30c dividends should attract the punters back as long as H1 2017 comes in above $8m npat and provide those holding now with a decision whether to hold or not above $3.50.
Value doesn't kick you in the head and force you to buy, it whispers quietly to you there's money to be made here. In post #561 I outlined the potential for FY17 just based on the exchange rate difference and how is we assumed nothing else changed (i.e. we still had really weird unseasonal weather, Di Humphries appointment made no difference and the effect of the full years costs they've been pulling out of the business in Fy16, (see commentary in 2016 interim report) for some strange reason didn't happen in FY17. Just the exchange rate only gives $20.5m next year up from forecast $13.5m this year.
Just this factor alone gets us back to the good days of FY15 but of course there's more to this story of potential.
There's the future effects of their cost reduction programme and a full year of those benefits to flow through in FY17, (part year FY16) and there's Di Humphries positive influence on the more attractive fashion offer at Glassons which the company has eluded too. Whether we get bizarre and unusual weather patterns like the warmest start to winter I can ever remember going forward from here is frankly anyone's guess but I think its fair to say they don't face that sort of challenge every year
The dividend yield is compelling and there's plenty of potential for profit growth from a low of FY16.
Geez, this has been quite the sales pitch over the last couple days. Gotta admire your enthusiasm if nothing else.
Latest Retail Sales data from Stats NZ showed clothing,footwear etc ingustry sales for the June quarter were up 7% on last year
That covers the start of the HLG year so even if they aren't growing share (James comment) sales growth is happening. ....at least in NZ
And if Di has got things humming - well 10% growth could be happening
Economy on fire (~4% gdp) and consumers spending heaps - even on clothes
Looking good for likes of HLG (and KMD - pity Postie Plus went bust)
I
Postie Plus lives.
New owners.
New lower everyday prices.
The menswear retailer that surprises me is The Farmers.I think they are gaining market share.
Ok, so assuming that this has been oversold a bit and that Roger's assumptions are on the money (refer post #561), one could safely assume that there is definitely some upside to this stock if we assume that the headwinds of this year have retreated!
However, and I may be assuming too much here so please forgive me if I am, we may also assume that they face more competition and lack of 'brand desirability' in which case we can therefore assume that margins may stay under pressure, with the resulting assumpti.........wait a minute.........where'd my tail go? ..........
tail? ....... that's strange, I swear it was here just a minute ago ............tail?.............. ................. ................... .....
........
........
(exit screen, wanders off to look for tail)
Last time I got on this horse about a year ago people were saying that competition was going to take its toll e.t.c. e.t.c. and yet they grew top line sales and profit has held up reasonably well with the lower dollar at 65 cents.
I think with Di Humpheries leadership and fashion expertise back at Glasson's (Hallensteins grew sales 6%, (see FY16 interim report) there's definitely a lot of potential there and the company itsdelf said the Glassons side of things is getting back on track and confirmed the key summer stock purchases are to be made at a much more favourable exchange rate.
Even if all that potential isn't fully realised and shareholders simply enjoy the (30 / 0.72) / 271 = 15.4% gross dividend yield and the SP does nothing this hound will still be wagging his tail in delight with the size of those XXXXL dividend feeds.
Think holders are not understanding the completion heading HGL way much like AIR there's a reason why the divi yield
Is creeping up its all to do with completion we are entering a new age where competitors are offering cheaper products of better quality than HGL can offer. Can shareholders honestly say they would rather shop at HGL tha competitors such as top shop etc ?
Or maybe the bean counting dog has seen 1001 sets of financials and understands the effects a key change in the input costs has on the bottom line, something we will see with the completion of their FY17 financial's and knows the company has a well established brand with a widespread distribution network...not one or two shops in the odd location here and there. Disc Hold AIR too, many think competition will kill that company's profitability too, (YAWN). (long week for the hound, tired of hunting,......must be time to sit by the food bowl and wait for a divvy feed shortly, AIR will be the first huge feed I think)
Only 1001 sets of accounts - lazy bugger
Accountants understand margins and what input costs can do for them - good or bad
But more importantly margin management comes instinctively to real retailers and the older they get the more canny they get. Rod Duke as the high profile one but HLG have Graeme Popplewell as CEO and Tim Glasson as a Director
Both of these guys (like Rod Duke) instinctively know how to make a buck and I would say far better at it than any accountant. Making a buck just a term for margin management - simple really, buy stuff that punters want at a good price and sell it at a good price(s) and don't get left with too much on the shelf at the end of the day.. HLG have done this very well over many decades - one of the highest margin retailers in NZ and never any real cash problems from having too much stock. They have doing this without any debt as well
Guys like Rod, Graeme and Tim also know things don't stand still - the world changes, fads come and go, competitors come and go. Some of their new stores are pretty classy and I believe the new Christchurch store is going to be the best yet. That will stop Top Shop contemplating going to Christchurch
Hallensteins been going since 1873 and Glassons since early 1900's - I reckon they still be going many more decades with good margins and generating plenty of cash
Roger who is buying HGL clothes the millennials are going on line for cheaper and more stylish options than HGL, looking at financials will not change the fact the retail landscape is changing. HGL has lived with competition for years this is now changing with overseas brands now getting a physical presence n NZ - Margins are going to be squeezed longer term
People were talking the same thing a year ago and the year before that and yet their top line sales have grown in a soft economy. Margins will expand considerably with the higher Kiwi you mark my words and HLG directors said as much too. These guys didn't come down in the last shower mate. Vast numbers of people still want to try clothes on and see how they feel and look before buying and want to buy from a handy local shop from a trusted brand they know. Agree 100% with what Winner said above...good operators make their own luck.
People were expressing the same concerns regarding Briscoes a year or two back and Rod Duke just keeps on keeping on just like HLG will. They're good operators, keep stock turn high, have a really nice clean balance sheet with no B.S. intangible assets like 101 other companies do and operate in a good middle price point in their segment.
Agree Winner...I need to lift my game....should have that up to 1005 sets of accounts by month end :)
I feel this is, too a large degree, my fault.
It was after all me who criticised you for providing real-time trade by trade updates of the TIL share price. By the way, have you noticed a new all time closing high for them today?
So whilst it is good to see you out and about, so to speak, and taking on the Glutinous Ramp Hound or whatever he is calling himself now, in such excellent debate, I think it would help your cause a little if you could get the code for the company correct. It is HLG.
Best Wishes
Paper Tiger
Millennials outraged over TV show portraying millennials as outraged
LOL I've had a couple of after dinner drinks and a big feed so I can see the funny side of that. BTW does the resident cat buy his jelly meat online like millennials apparently buy everything now days ?
Would help one's cause a little if they could spell competition too.