HLG - Hallenstein Glassons Holdings

[Waltzing]

Off TOPIC - but related to financial reporting.

The solution to data information has been available since the mid 1960's with the creation of SIMULA and the later definition of XML..

Its simple publish the information in XML and the comparison if financial would be simple and that has been available for since when?

https://en.wikipedia.org/wiki/XML

[winner (n)]

Might see HLG at 10 bucks next week

That be some duly deserved milestone

[winner (n)]

That $10 share price must be close now

[Basil]

https://www.marketscreener.com/quote/stock/HALLENSTEIN-GLASSON-HOLDI-6495564/

Based on average of 3 analysts expectations at $9.97 HLG trades of on a price earnings ratio of:-
12.9 for FY26
11.7 for FY27
10.8 for FY28

Still very reasonable metrics in my opinion for the quality of this company, its management, its proven growth record and the huge opportunity in the decades ahead with Glassons Australia.

[LoungeLizard]

https://www.marketscreener.com/quote/stock/HALLENSTEIN-GLASSON-HOLDI-6495564/

Based on average of 3 analysts expectations at $9.97 HLG trades of on a price earnings ratio of:-
12.9 for FY26
11.7 for FY27
10.8 for FY28

Still very reasonable metrics in my opinion for the quality of this company, its management, its proven growth record and the huge opportunity in the decades ahead with Glassons Australia.

I'm not sure about that. Looks like a bubble forming on low trading by FOMO's. Any slip in delivery could lead to quite a negative adjustment. At close to $10 per share the yield isn't commensurate with the risk. Buyers beware, would be my instinct.
Disc. Cashed up.

[winner (n)]

Might put a buy at $10.05 in the morning before the open ....that'll get the share price over 10 bucks

I can then skite that I made HL.g go over 10 bucks

[Basil]

..        FY26     FY27    FY28
EPS     77       85       93
DPS   66(77) 75(87) 82(95)
Sales   505     536     564

I posted this a little while back.  The DPS number in brackets assumes 50% imputation credits so is the gross dividend number
Gross estimated yield @$10 for the years ahead is as follows
FY26 7.7%
FY27 8.7%
FY28 9.5%
On top of those attractive yields those purchasing soon will get the 30.5 cps final divvy for FY25 in December and likely another similar sized interim FY26 divvy shortly thereafter in April 2026.
I think HLG makes a compelling case for itself both as a dividend hounds stock and also on the price earnings multiple.  A classic GARP stock.
Sales year to date for the first 7 weeks of FY26 were recently reported as up 12.9% and arguably we're right at the bottom of the retail cycle with green shoots emerging https://www.nzherald.co.nz/business/green-shoots-are-emerging-anzs-sharon-zollner-says-as-business-confidence-jumps-to-eight-month-high/HRV7NFWY5JCMLDG46ARHZOGBME/.
A share price of approx. $15, 3 years hence, (maybe sooner if there's a takeover offer, but I hope there isn't), from now would not surprise me in the slightest.  Looking forward to the AGM in December and a further trading update.  Annual report is due out any day now..

[Ferg]

A share price of approx. $15, 3 years hence, (maybe sooner if there's a takeover offer, but I hope there isn't), from now would not surprise me in the slightest.
{snip}
Annual report is due out any day now..

I see today's high was $9.99....so close to $10 which is likely a mental hurdle for some.

I think they released their annual report the other day:
https://www.nzx.com/announcements/459538

Edit: I take that back sorry.....it was just the financials.....
https://api.nzx.com/public/announcement/459538/attachment/453038/459538-453038.pdf

[Pierre]

As at today, HLG and TRA together account for 42% of my portfolio value. (They also provide a decent slice of my annual dividend income.)

In theory, I should sell some and diversify a bit more, but where else can I achieve the ongoing lift in income and capital growth that are almost guaranteed by these two companies?

I think I'll wait for a year or two for some of my other shares to do some heavy lifting to shift the percentages. Looking at you HGH, SPK, PEB, SUM and XRO.

[Basil]

As at today, HLG and TRA together account for 42% of my portfolio value. (They also provide a decent slice of my annual dividend income.)

In theory, I should sell some and diversify a bit more, but where else can I achieve the ongoing lift in income and capital growth that are almost guaranteed by these two companies?

TRA and HLG set the bar bloody high that's for sure. ~ 35% for me, combined.  I can't find anything in the market that I like as much as those two which makes me want to go even higher.  The conservative accountant in me thinks 35% is too much but the greedy dividend hound in me thinks its not enough and grow a pair of balls will ya and take the combined holding up to 50% immediately.   I'm not sure which side of my brain is correct.  I might split the difference and join you on 42% portfolio allocation lol

[Basil]

Annual Report is out.  https://api.nzx.com/public/announcement/461702/attachment/455526/461702-455526.pdf

Looks like there's no talk of a replacement group CEO.  Board may be thinking what's the point as each division has its own CEO and we don't need too many cooks in the kitchen.  Why not save the ~ $1m cost instead ?  Market seems to think its a good idea too with the share price up quite significantly since Chris Kinraid left.   

[Ferg]

How prescient was that?  You called it yesterday Basil.

Has HLG ever done this before?  I can't recall them previously issuing share performance rights.
https://www.nzx.com/announcements/461713

Given they haven't issued any new shares in the 15 years of data I have, would they buy on market to satisfy this?  Or would they issue new shares?  Small numbers I know but I'm curious if this is a shift in methods....

[Basil]

It does seem to be a shift in remuneration methodology and also a new way to try and encourage long term earnings growth in Glassons N.Z. and Hallensteins.  I like that the issue of these shares is tied to CAGR in EPS over the three year period.  That's how all share rights performance targets should be set.

I don't know Ferg, but I suspect they will buy the shares on market in 2028 given the small number required.  A $374,000 @ $10 per share performance rights issue at the current price is not a lot over three years for 2 divisional CEO's and maybe the board think this is a good way to retain team leaders,. drive EPS growth and save the ~ $1m a year on a group CEO ?  Makes good common sense to me if its kept to a sensible level like this and the shares are bought on market in due course.   I see James Glasson's bought just under 300,000 shares from Tim Glasson in the last financial year and now has just over 800,000 shares so he's motivated too..

[Ferg]

Thankfully the company is not in the business of playing chess.....

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But seriously, a good company with good growth & dividends.

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[Basil]

But seriously, a good company with good growth & dividends.

I couldn't agree more and run very conservatively too with no debt.
EPS 2020 44.6 cps EPS 2025 69.2 cps, (normalized for the unusually high tax rate this year with an extra $1.8m prior period tax adjustment, worth 3.0 cps, that the company has not been forthcoming on providing an colour on) gives a 5 year CAGR in EPS of 9.18% over that really tumultuous 5 year period.

With the HUGE runway for growth with Glassons Au I think they can do that going forward too for the foreseeable future so no growth Ben Graham 8.5 PE + 1 PE extra for each 1 % they can grow EPS = 9 = they screen as deep value up to a forward PE of 17.5 in my GARP valuation criteria.  Average FY26 EPS by analysts = 77.18 cps x 17.5 = $13.50.  I think I need to get some more because honestly I'd rather buy more of a very high quality company that screens well within my GARP valuation formula than take a risk on other shares that appear cheaper but are not performing or for that matter more expensive tech that might blow up in your face..