HLG - Hallenstein Glassons Holdings

[BlackPeter]

Here you go folks:

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Interesting chart. SP never reached the 16, but likes to move back towards the 8 when it was close to the highs before. Time to drop below the medium again?

But for sure, this time it will be different ...

[Ferg]

BP: the bands* of 8 and 16 were my choosing.  I try to pick values that the SP oscillates between.  If I tighten the bands up it could in theory be a buy/sell signal.

The other thing to consider is that with a rising share price a company can reverse into it's P/E ratio by delivering EPS growth.  If they don't then history tells us a high P/E stock will have its SP savaged by Mr Market.

*By the way the bands are a blend of past and future earnings (except for the latest periods which are all historical).  So half way through the reporting cycle the band will be based on half the prior EPS and half of the next EPS.

[Basil]

Many thanks Ferg. Applying my deep value GARP screening filter no growth PE of 8.5 + 1 extra PE for each 1% CAGR = 8.5, the forward PE should be 17 times FY26 EPS (consensus forecast of 78.07 cps) = $13.27.  I am firmly of the view this is the best value GARP stock on the NZX at only 12.8 times FY26 EPS.

[winner (n)]

Good stuff Ferg - well  done

[Basil]

1H FY26 trading update preview for announcement sometime later this month.  I am hoping for gross sales of $270-275m up 13.5%
Net Profit of $24-25m up 15%
1H dividend to be announced towards the end of March with the result, hoping for 30 cps up 22% (noting the record level of cash on hand at balance date and their ability to easily pay 30 cps in dividends from 40+ cps in earnings).   Lets see how we go.

[winner (n)]

1H FY26 trading update preview for announcement sometime later this month.  I am hoping for gross sales of $270-275m up 13.5%
Net Profit of $24-25m up 15%
1H dividend to be announced towards the end of March with the result, hoping for 30 cps up 22% (noting the record level of cash on hand at balance date and their ability to easily pay 30 cps in dividends from 40+ cps in earnings).   Lets see how we go.

Hey midpoint of your $270m-$275m sales guess is clsoe to my trusty seasonality model number of $273.2

We'll see eh

[winner (n)]

Uni in OZ came out with a great H1 result

Sales up 14% - GM expansion ---NPAT up 22% on last year

Ans sales still growing double digit into H2

[Basil]

Market likes the UNI result. Hope we see a similar rerate when HLG trading update is announced on or before 27 Feb. UNI on a trailing PE of 27, HLG trailing PE 15 with approx 60% of their sales in Aust...hmmm.

[winner (n)]

Market likes the UNI result. Hope we see a similar rerate when HLG trading update is announced on or before 27 Feb. UNI on a trailing PE of 27, HLG trailing PE 15 with approx 60% of their sales in Aust...hmmm.

Jeez PE 27 - that's some love

[Basil]

Jeez PE 27 - that's some love

Forward PE for UNI about 22 but HLG screams "cheep" louder than a cage full of budgies on a forward PE of only 12.

[Basil]

https://www.nzherald.co.nz/business/retail-spending-sees-solid-rise-in-december-quarter/HMRSZD2ODNBKLGRO2XKFZUQFGE/

Good sign for a gradually recovering N.Z. economy.  Looking forward to HLG's trading update later this week.

[Pierre]

MKTUPDTE: HLG: Trading Update and Profit Forecast

27 February 2026 Hallenstein Glasson Holdings Limited Trading Update
and Profit Forecast

The Company advises that unaudited total Group sales
for the six-month period ended 1 February 2026 were $275.2 million, an
increase of 14.6% on the prior corresponding period ($240.0 million).
Group unaudited net profit before tax (NPBT) is expected to be in the range
of $39.3 million to $39.8 million, which is up +32.1% on the prior year
result ($29.9 million). The balance sheet for the Group remains strong
and stock levels continue to be well controlled. A full announcement with
six months' financial statements including a dividend declaration will be
released to the market on 27 March 2026.

Superb result.
I think we can expect a divvie of at least 30cps, possibly a bit more!

[Basil]

Crickey !!  That's well and truly blown my expectations out of the water.  What a stunning trading update !
Just putting some numbers around this.  At the mid point of Net Profit before tax forecast of $39.55m and assuming that the tax rate normalises to about 29.2% (60% Aussie tax at 30% 40% N.Z. tax at 28%), that's $28m Net Profit after tax and a stunning first half EPS of ~ 47 cps !
I've raised my outlook for FY26 to EPS of 90 cps putting HLG on a foreword PE for FY26, (with 8 months of the financial year gone already) of only 10.9 at $9.77.

That seems completely ridiculous for a company no debt, about $1 per share in cash in the bank with a 10 year CAGR of 8.5% that's currently growing EPS at 32% at the very early stages of a retail recovery.  With a vast runway for growth in Australia and a well proven track record of growth, trading on profoundly compelling metrics, with well proven management and systems, this looks like an outstanding opportunity to me for those not already well positioned.

[winner (n)]

Hey midpoint of your $270m-$275m sales guess is clsoe to my trusty seasonality model number of $273.2

We'll see eh

We were a bit conservative eh --- but pretty spot on

[Basil]

We were a bit conservative eh --- but pretty spot on

We got the top line very close mate but the bottom line has far exceeded my expectations.  Currency wasn't especially helpful in that half, more favorable now, so there must have been a very strong recovery in N.Z. profitability which on the face of it is very encouraging for the future level of imputation credits.