HLG - Hallenstein Glassons Holdings

[winner (n)]

Your forecast Ok

That 68% increase in first part of year was worth $30m extra sales

That's about $10m more profit than pcp so much more to go to get to your 48m

[Waltzing]

Now please remeber the RBNZ (reserved bank of nowhere zeees land) has said no buying this xmas...

NO PAYING me keep your wallets closed... no buying HLG shares cause there arnt that many to go round if the forecasts are as predicted by local hounds and everyone needs to buy more.....

[Basil]

Gosh, more than $9 million after tax due to be credited to shareholders accounts next Friday, the day after Annual Meeting update.  Wonder how many millions of that gets reinvested back into HLG shares ?  Have to be quick if you want to "hound-up" some more shares at bargain prices.

[winner (n)]

Gosh, more than $9 million after tax due to be credited to shareholders accounts next Friday, the day after Annual Meeting update.  Wonder how many millions of that gets reinvested back into HLG shares ?  Have to be quick if you want to "hound-up" some more shares at bargain prices.

Surely best way is to pre-empt this reinvestment and do it before the meeting .... like borrowing from youelf and paying it back with the actual divie.

And after 'First 19 weeks sales are up 35% on pcp' (or maybe a little less) the share price will shoot up ... maybe quite a way over 6 bucks

You'll get more shares from you dividend if you do this ... cost you plenty if you wait

[Red Baron]

I wish Snoopy would join this forum.  I'm planning on asking the question Snoopy is wondering about at the annual meeting.  They had $2.7m in their imputation credit account at balance date so why not partially impute (about 50%) the December dividend ?

Herr von Schnoopy will not be joining this forum.  I have seen to that!

RB

[Waltzing]

the thing is.... the SP has always been a serial under performer....

now if it was in the nifty 50 maybe it would perform but it always get beaten to the punchbowl..

[Red Baron]

I met up with quite a few of these forum participants yesterday for a few drinks and the question came up as to why there are no imputation credits with the forthcoming dividend?

From my review of the financials the ICA had a balance of $2.7m as at balance date but there was taxation receivable of $572K showing in the balance sheet which would have reduced the ICA to just over $2.1m + any provisional tax paid since then.

Wondering why the forthcoming dividend wasn't partially imputed.

Second question.  Can shareholders assume given the December 2022 dividend is not imputed and its too late to change that, the April 2023 dividend be imputed as much as possible?

Many thanks indeed to Stuart the CEO of HLG for his time explaining this to me. He explained that the figure shown above was a net group figure, an amalgam of N.Z. and Australian tax and that the N.Z. refund receivable was higher and therefore reduced the imputation account further.  From his response I am 100% confident they will impute future dividends as much as possible with shareholders best interests always at heart.

We are looking at the balance sheet in the 2022 annual report?

I see there is an entry there under 'Current Assets' that says there is $0.572m of tax receivable.  Stuart says that figure is an amalgam of NZ and Australian tax and that the NZ receivable is much higher.  But if the NZ tax receivable is much higher, does not that mean:
.... the performance of the NZ business....
... is much worse than that reflected in the provisional tax payments paid up to now....
....those payments that created that positive 'imputation credit balance' in the first place ??!? (note 6.3 in the annual report), by the NZ business  ....
... and so necessitating a large tax refund)?

?How can that be good news?!???

Does not this mean that my flea ridden mangey Sopwith Camel flying mutt nemesis that said

"Something has happened since balance date that would suggest profits in NZ for FY2023 over the full year are going to be much less than expected. Thus, come the square up of tax time at the end of the year, much of the provisional tax paid up to will be entitled to be refunded, thus reversing the 'positive imputation balance' that is in the NZ tax imputation account now."

was right?

RB

[Waltzing]

well you never know

some reports in the annual report actually have missing subtotals.....

.......

[Basil]

Snoopy needs to read the 2022 annual report.
Extract from page 9 CEO's report under the heading
Outlook.
We have seen trading improve in both New Zealand and Australia.

Extract from page 6 of same report referring to Glassons N.Z.
"There have been improvements as we have moved into the new financial year"

Referring to Hallensteins he said on page 6
We have seen growth from both New Zealand and Australia[/i]

Extract from Page 5 Chariman's report under the heading
Future Outlook
"The first 8 weeks of the new financial year have seen group sales improve by 68.49%"

Since warning about currency headwinds in the annual report the $Kiwi is up from 55.5 to 64 cents US, a 15% improvement.

Welcome to the forum Red Baron / Snow Leopard.  Thank you for disturbing me from watching SWAT on Netflix, I was bored with it anyway.

I've had another look at the imputation account figures and Stuart Duncan's full reply and crunched the numbers on this in light of what he said they'd done with 2022 provisional tax and what the N.Z. profitability was for FY22, (noting the significant change in profitability for N.Z. operations between FY21 and FY22 in the accounts at note 2.1 segment information, pages 32 and 33 of the annual report).

My calculations show that at this point in time the ICA is in credit by just on $700K.  Having now crunched those numbers through I can see why they didn't bother partially imputing next week's dividend as to fully impute it would take a $5.57m credit and a 12% imputation level is barely worth bothering with.

People need to understand that movements in the ICA account are solely to do with historical issues around Covid and the significant change in the level of profitability of N.Z. operations in FY22 relative to FY21, (FY22's provisional tax first two installments were based on FY21's profit plus the standard uplift of 5%, also known as "Safe Harbour".  (Sorry for the professional / technical lingo).

Nothing whatsoever can be inferred about the balance of this account as it currently stands per my calculations above in regard to FY23's trading or profit. 

Subsequent company statements as highlighted above in purple from my post earlier this week clearly show improvements in both New Zealand and Australian operations year to date in FY23 as compared to FY22.

They will need to start paying FY23 provisional tax before the next dividend in April and I expect it will be imputed as much as possible. 

If they can restore N.Z. operations in due course, (may not be in FY23) to the same level of profitability as FY21 they should have approx. $6.5m per annum in imputation credits which is enough to impute 48 cents per annum of annual dividends to a 58% level of imputation credits or just on 11 cps.  48 cents in divvies plus 11 cps in imputation cents = 59 cents per share and on a closing share price today of $5.40 would give an indicative forward yield of 59 / 540 = 10.9% per annum.  Can they restore N.Z. profitability to FY21 level's and how long will that take ?  We will have to wait and see.

I am sticking with my group forecast stated earlier today (post #134) which may be revised after the annual meeting update next Thursday.

[SuperMario]

NZ Card Spend for November out today from Stats NZ

Apparel sales for this November up 8.2% on last year. Annual sales to November up 10.2%

HLG year to date is August/November -  sales for the four months up 48% on last year .... yes 46%

Things rocking in apparel - even in NZ

With those sort of numbers prob need to increase my expectations for full year

Next weeks update will be exciting .... so good they might even do something unusual and come up with profit guidance

Hi winner, are you referring to this report https://www.stats.govt.nz/information-releases/electronic-card-transactions-november-2022/ ?

How did you calculate apparel spending was up 8.2% ?

I couldn't find it stated anywhere so worked it out from the above 2022 report and last years report https://www.stats.govt.nz/information-releases/electronic-card-transactions-november-2021/

• Apparel spending in November 2021: 119+119/0.53 = 343.528301887
• Apparel spending in November 2022: 2.8+2.8/0.008 = 352.8
• Percentage change: ((343.528301887 - 352.8 )/343.528301887) * -100 = 2.69896193765%

[winner (n)]

Hi winner, are you referring to this report https://www.stats.govt.nz/information-releases/electronic-card-transactions-november-2022/ ?

How did you calculate apparel spending was up 8.2% ?

I couldn't find it stated anywhere so worked it out from the above 2022 report and last years report https://www.stats.govt.nz/information-releases/electronic-card-transactions-november-2021/

• Apparel spending in November 2021: 119+119/0.53 = 343.528301887
• Apparel spending in November 2022: 2.8+2.8/0.008 = 352.8
• Percentage change: ((343.528301887 - 352.8 )/343.528301887) * -100 = 2.69896193765%

The .xls spreadsheet that opens use Sheet Table 1 is Electronic card transactions by industry – actual monthly values(1)

Says Nov 22 Apparel sales 394 and Nov 21 as 364

Don't even need to calculate the Percentage change from same month of previous year(6)
as Stats NZ do it for you - its in Cell J56 - 8.2%

Pretty good growth eh

[Waltzing]

just when we though we could kick back and relax ....

lucky its raining....

well have to take notice of these posts ....

ICA accounts are for pros who have done their Tax unit and had years of practise.

INZCompanyImputationYTD  Interface
methods ect to calcuate....

! YET to be implemented

https://www.ird.govt.nz/income-tax/income-tax-for-businesses-and-organisations/income-tax-for-companies/imputation-for-companies/how-imputation-credits-work/imputation-credit-accounts

 

[Forrestdun]

I could be wrong but I think that companies also have to use the same imputation % for all dividends in a year.

[Red Baron]

I've had another look at the imputation account figures and Stuart Duncan's full reply and crunched the numbers on this in light of what he said they'd done with 2022 provisional tax and what the N.Z. profitability was for FY22, (noting the significant change in profitability for N.Z. operations between FY21 and FY22 in the accounts at note 2.1 segment information, pages 32 and 33 of the annual report).

OK I see that.  From section 2.1 'segment information':

Profits over 2021 for Glassons NZ ($11.553m) plus Hallensteins ($4.818m) add to $16.371m
Profits over 2022 for Glassons NZ ($4.079m) plus Hallensteins ($2.092m) add to $6.171m

That means that if provisional tax was paid for the 2022 year, based on the earnings from 2021, much more provisional tax will have been paid compared to the ultimate tax bill owed.

It also means that in 2023 in New Zealand, assuming a recovery, the provisional tax paid for 2023, based on earnings from 2022, will grossly underfund the ultimate tax bill owed for 2023.  This is the situation we find ourselves in now. 

Stuart has told us that the 'tax refund' of $0.572m at 2022 balance date,, is actually higher than that when we look at NZ component only.  This is because that recorded 'refund' of $0.572m is sum, where the New Zealand refund has been offset against a tax payment due in Australia (?).  Is it likely that the 'NZ tax refund component' has been reassigned to the 2023 accounting year, to offset the underpayment in provisional tax that is becoming apparent for 2023?   

People need to understand that movements in the ICA account are solely to do with historical issues around Covid and the significant change in the level of profitability of N.Z. operations in FY22 relative to FY21, (FY22's provisional tax first two installments were based on FY21's profit plus the standard uplift of 5%, also known as "Safe Harbour".  (Sorry for the professional / technical lingo).

And these 'historical issues' are broadly as I have described above?

Nothing whatsoever can be inferred about the balance of this account as it currently stands per my calculations above in regard to FY23's trading or profit. 

They will need to start paying FY23 provisional tax before the next dividend in April and I expect it will be imputed as much as possible. 

I don't understand this comment.  It implies they are not paying provisional tax for FY2023 already, which surely they are (even if not at a rate that covers expected 2023 profits).

RB

[BlackPeter]

Surely best way is to pre-empt this reinvestment and do it before the meeting .... like borrowing from youelf and paying it back with the actual divie.

And after 'First 19 weeks sales are up 35% on pcp' (or maybe a little less) the share price will shoot up ... maybe quite a way over 6 bucks

You'll get more shares from you dividend if you do this ... cost you plenty if you wait

Just trying to remember - wasn't there something our friend KW told us about buying shares in a downtrend?