HLG - Hallenstein Glassons Holdings

Started by winner (n), Oct 03, 2022, 01:26 PM

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winner (n)

Glassons have 699,000 followers on Instagram - that's guite a few

Online sales still very important for them even though they say as things return to more normal don't epect them to grow at the same rate as last few years

But the online activity saved the day for them over the last couple years

Since Jan2020 group sales are up $58m - of that $54m came from online - online basically drove all the sales growth for them

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KW

Quote from: Basil on Oct 10, 2022, 06:21 PMNo question the year ahead will see the wheat sorted from the chaff in terms of who's going to do well and who's going to fail.  Interesting comment on pricing intentions this quarter, retailers expect to increase prices another 5% after a 6% increase last quarter.  Lot of talk about margin pressure but the smart operators are managing that well with price increases and reduced discounting.
https://www.interest.co.nz/business/117949/latest-survey-retailers-shows-still-significant-number-are-unsure-if-their

CCX stated that they increased prices during the year in anticipation of an intense discounting period at the end of the year due to retailers being overstocked and needing to clear inventory.  So there will be big discounts going, and if you put your prices up you can offer 40% off in the holiday sales, instead of 20% off.  Sales period kicks off this week with Amazon Prime Day, then Singles Day,  then Black Friday, Christmas, and New Year sales.
Don't drink and buy shares in a downtrend, you bloody idiot.

KW

Quote from: winner (n) on Oct 11, 2022, 11:09 AMStats NZ Electronic Card Spend September month

Apparel up 97% on September last year - that follows a 66% increase in August month


October is going to blow the numbers out of the water because Costco opened.  People are spending the GDP of small island nations in there  ;D
Don't drink and buy shares in a downtrend, you bloody idiot.

Recaster

A bit of a look at this company:


Ferg

#34
Nice work Recaster.

One question: why are dividends paid classified under "operating cash flows"?  Shouldn't they sit under "financing" even if HLG have them under "operating"?

Basil

HLG have their own unique steady way of doing things including no debt.  That's the reason they are N.Z.'s oldest listed company.  Long may the way they do things continue.  Glassons Australia will continue growing strongly without any debt and the N.Z. operations of the company will recover without all the radicicolous lockdown's.  Partial imputation credits will return in due course.

Disc: I bought a few more yesterday.  Now my #1 holding.

winner (n)

Quote from: Basil on Oct 15, 2022, 12:51 PMHLG have their own unique steady way of doing things including no debt. That's the reason they are N.Z.'s oldest listed company.  Long may the way they do things continue.  Glassons Australia will continue growing strongly without any debt and the N.Z. operations of the company will recover without all the radicicolous lockdown's.  Partial imputation credits will return in due course.

Disc: I bought a few more yesterday.  Now my #1 holding.

So true

Operating Cash Flows (including lease payments) over the last 5 years have been $190m

They've spent $50m on stores and distribution centre and paid $125m in dividends

Kept spending (investing) during pandemic - good stuff

Seems good use of the cash they've generated

Condidered expansion good - with available capabilities and resources

Basil

Excellent point about investment in distribution centers and not to forget investment in websites, apps and other supporting software and functionality.

Can you think of any other listed company on the NZX that can say they make 28% of all sales online ?
Does any other NZ listed retailer even get close to this very impressive figure ?


winner (n)

#38
Quote from: Ferg on Oct 15, 2022, 09:57 AMNice work Recaster.

One question: why are dividends paid classified under "operating cash flows"?  Shouldn't they sit under "financing" even if HLG have them under "operating"?

His name is Recaster so he recasts financials to a format that best suits him to present his views

I do that as well - recast things that to me best reflect the reality of economics and with Cash Flow recast to reflect where cash comes from and goes

Like this is how I look at HLG's cashflow -

Reported Operating Cash Flow 52.5m
less Lease payments 23.8m  (ye old rent payments)
Give adjusted (real) Operating Cash Flow 28.7m

less Cash used Investing (Capex) 8.2m

Gives Free Cash Flow 20.5m

less Dividends to shareholders 25.1m (a bit like interest as cost of capital)

Cash Outflow 4.4m (or called Cash Retained if positive)

Funded by Sale of Treasury Stock 0.4m and reduction in cash held 4.0m

Ferg - you don't want to see my recast retirement company cash flows - quite revealing where I see the cash going

Basil

#39
What does sales year to date in the first 8 weeks of FY23 up 68.49% really mean given the whole Auckland region was in the infamous 107 lockdown last year and much of Australia too?  Is this really any good or not?

Maybe we should compare sales to the first 8 weeks of FY21, the previous (August / Sep 2020) instead?  Well, yes and no, yes there weren't so many lockdowns, but No Covid was still a major factor then as it only really started in March 2020.

Okay so maybe the most useful comparison is how does the first 8 weeks of FY23 compare to the first 8 weeks of FY20, (pre covid) before any of us had even heard of Covid ?.  Hmmm...yes that would be interesting to know...so I thought I would crunch some numbers.

Excerpts from key Outlook statements include:
30/09/2022 The first eight weeks of the new financial year have seen Group sales improve by +68.49% on the prior year.
30/09/2021 The first eight weeks of the new financial year have seen Group sales decline -18.90% on the prior year,
25/09/2020 The first eight weeks of the new financial year have seen Group sales grow +10.71% on the prior year,
27/09/2019 The first eight weeks of the new financial year have seen Group sales grow +7.23% on the prior year

Using the 27/09/2019 (pre covid) as the starting reference point and calling sales $X then, since then sales have grown by 10.71% = X = 1.1071, fallen by 18.9% X = 0.898 and grown by 68.49% X = 1.513.

Conclusion - Sales for the first 8 weeks of FY23 are 51.3% higher than pre-pandemic level's.

Next up I want to have a look at how online sales have grown as a percentage of sales since the pandemic hit us.
Key Excerpts
27/09/2019 Online sales now represent 15% of Group turnover.
30/09/2022 Online sales now represent 27.88% of total sales for the full financial year.

Conclusion - The percentage of sales made online has nearly doubled (up 85.86%) since 2019.
Given sales are up 51.3% 1.8586 x 1.513 = 2.81, it is reasonable to conclude in dollar terms online sales for the first 8 weeks of FY23 have nearly tripled since pre-pandemic levels.

Well positioned going forward is an overused cliche but seems very apt in this case. 




winner (n)

Hey Basil - as per my previous post first 8 weeks sales increase for F23 is about $30m or $12m profit impact

Seeing they made $26m profit in F22 which included the terrible first 8 weeks of last year with sales being down 19% you would have to think you could almost add the $12m to that - and that's only assuming the rest of the year is flat

All looking good


Ferg

Quote from: winner (n) on Oct 15, 2022, 03:35 PMFerg - you don't want to see my recast retirement company cash flows - quite revealing where I see the cash going
Too right winner.  I also "recast" my own cash flows.  It is certainly interesting for the RV companies.  I won't expand on that here (wrong place).  In summary you can present whatever profit method you like, but you can't hide from the cash flows.

Basil: nice work with the numbers but I'm not sure how/why you got the 2.81 - is there an element of double counting?  I'm not following that final step.

Basil

#42
Thanks Ferg.  Online sales as a percentage of total sales are up 85.86% since pre-covid. (27.88 / 15.0)
Sales themselves in total are up 51.3% per previous posted workings, therefore online sales in dollar terms are up by both the percentage gain online 85.86% and the absolute gain in total sales themselves 51.3% (1.8586 x 1.513 = 2.812).
Hope that helps.

Why is this important many might ask ?
The percentage of sales online is often seen as the holy grail of retail as this avenue of sales can often grow with little or no addition to overhead.
For instance, from memory, this time last year there had been 300,000 downloads of the Glassons App.  I think they just announced this is now up to 850,000.  I'm sorry I can't remember where I read this, maybe someone else can help ?
That sort of growth in one year is pretty exciting because a lot of the target market (young people) are really into the whole online digital thing and spend a lot of time online so it's an important lead indicator that online sales channel growth will still be strong notwithstanding all the physical stores being open this year.

Ferg

#43
Ok.  I would have thought that the online sales (and their increase) was a subset of the overall increase.  I'm happy to be corrected if I have misunderstood the numbers.  Was the "total sales" increase of 51% just for in-store sales, or was it for all sales?  I think this is where I am getting confused.

Edit: sorry, I think you were extrapolating to the online portion only for the 281%.  Got it.

Ferg

#44
All versus online versus in-store.

2022 versus 2019 base (note I am showing % increase, so 151% versus base is showing as +51%)

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