HLG - Hallenstein Glassons Holdings

[winner (n)]

Share price heading back to 6 bucks by Christmas and then 7 bucks at half year profit announcement when punters realise good sales growth equal booming profits

And this time next year you never know share price close to 10 bucks

[Basil]

I'm trying hard not to think about what the share price does.  Yes, I am excited for the future of the share price but that's not why I have invested heavily in HLG.
At the end of the day I want a very comfortable retirement, and this is a classic dividend hounds stock.

The interesting thing that came out of the meeting is that they saw FY22 as, and I am quoting off my notes here, "The most challenging environment they had ever seen"

What I find fascinating is that despite that they could still pay 42 cents in dividends for the year.
To me this is highly supportive of my contention that 42 cents is the new "chart datum" (google it if you haven't heard the term before)

[winner (n)]

I think that some think you are being rather exhuberant with your call that the new 'base' for dividends is 42 cents when they have averaged about 31 cents for years

What those doubters don't grasp is that while dividends averaged those 31 cents a year HLG sales were under $300m - like growing from $200m in 2007 to $287m in 2020.

these days HLG sales are well over $400m and likely to grow solidly from there - so makes sense that dividends going forward are going be more than averageing 31 cents .... and 42 cents surely is a new base as you say

[Waltzing]

"Dual Listing "

this has been mentioned on the forums and is long over due although there is the cost and possble they are just to busy selling to bother....

after all one of reports in the FA had totals missing...

they dont have time to count the cash by the look of it....

Has MR B batted himself a TON here .... again!!!

[Basil]

https://www.hallensteinglasson.co.nz/content/reports/Annual%20Report.pdf
Let's walk back in history a bit 5 years ago before Glassons Au sales really took off and have a look at the 5 year comparative figures on page 4 covering the years from 2013 to 2017 inclusive.

What we had back then was a no growth N.Z. focused company meandering along with sales ebbing and flowing with the tide of the economy from one year to another turning over on average $222m per annum.  (Please note I am forecasting nearly double that in FY23 ~ $435m.) Despite this they could pay an average annual dividend of 30.9 cps.

Since then we've had Glassons Au growing sales at a compound average annual rate of 26% per annum for the last five years leading to $351m turnover in FY22 despite the business experiencing "the most challenging environment they had ever seen"

I have previously forecasted annual growth in sales this year of 24% to $435m, (sales year to date for the first 19 weeks are up 41%).  I will leave my forecast unchanged at this point and revise it when they update further in February 2023.

I think it should be clear after any decent level of objective analysis this is a very different business than it was 5 years ago operating at a very different scale in Australia.  The prospects for further growth there, (same number of Glassons stores at 36 as N.Z.), should be readily apparent to all with their market being 5-6 times the size of ours.  This suggests a very, very long runway of growth ahead for Glassons Au with their steady expansion plans.
Dividend hounds should really appreciate the very conservative and prudent way they're going about delivering on their growth ambitions, their very strong balance sheet with no debt and strong cash on hand (59 cents per share despite carrying more inventory to fuel more growth), and the disciplined way they manage your business.

It's a pleasure to watch and be part of this company.  A masterclass in how to grow a business in a prudent and a very carefully managed way, while contemporaneously richly rewarding shareholders all along the way with strong and very reliable dividend payments.  I'm not aware of any other company on the NZX that has such a high yield and such excellent prospects for growth in profits and dividends going forward.

Has MR B batted himself a TON here .... again!!!

We will have to wait and see my friend but I've got a TON of shares, (and I think you know I am not talking about 100 shares lol), so I'm off to a good start 

[Waltzing]

Although we have invested and traded in this stock for over 15 years.

The recent presentation of FA information on this forum has refocused attention on this stock.

Any benefits that may accrue are due to this well presented information and charts by B & W....

https://www.youtube.com/watch?v=1PBU_l0pP18

[Left Field]

NBR article today mentions that Glassons are expected to expand (further?)  into the USA?

(Paywalled) https://www.nbr.co.nz/retail/retail-brand-glassons-expected-to-continue-us-push-next-year/

A big step not mentioned/noticed here? (Can't see it in any of the releases either?)

[Basil]

Yes James Glasson spoke about that at the meeting.  Sort of on the back-burner at present. Their focus at the moment is on the markets they know the best, rebuilding N.Z. and growing Australia.  They are looking at a number of opportunities in Australia at present for expanding their Glassons retail footprint.

Other stuff - Online sales for Hallenstiens in Australia has been going very well and now exceeds N.Z. online sales despite them only having 4 physical stores there and 42 stores here !   WOW, that was interesting ! The new Hallensteins CEO, Rob, spoke very well and seemed to have a very good grasp of the business and key area's needing progress despite only being in the role for 2 months. 

Its clear they see best use of capital as expanding the Glassons retail footprint in Australia and digital investment elsewhere.   That said, store refurbishment and modernisation continues across the network.

Ongoing strong growth in Austrailia is a given in my considered view, albeit it won't be in a straight line upwards at the same pace every year but what to my mind has been deeply impressive is how Glassons Au has grown its sales and most especially its profits in the midst of a pandemic, covid lockdowns and extremely difficult freight costs and logistics.  Its going to be absolutely fascinating to see the growth there in the years ahead unencumbered by such extraordinarily difficult trading conditions. 

I'm interested to see how N.Z. trading recovers as that's a key to the level of imputation credits we can expect with dividends going forward.  (With that I am rescinding my previous forecast of the level of imputation credits as this is simply too hard to assess at this point).  On average going forward they will be partially imputed as much as possible, the extent of that partial imputation I cannot estimate with any reasonable degree of reliability at this stage but I will know a lot more once we have the divisional breakdown with the forthcoming half year financials' in late March 2023.

I think it was clear from the annual meeting that this year's year to date sales growth for the group of 41%, whilst they said both N.Z. and Australia sales have grown, Australia has grown faster.
 

[Left Field]

Thanks for clarifying the USA situation Basil and thanks also for all your detailed posts on HLG.

GLH's.

[Waltzing]

great stuff from B & W...

sure evryone has read this ...

https://www.stuff.co.nz/business/130770372/boom-before-the-bust-economy-grew-2-in-three-months-says-stats-nz

[winner (n)]

The more I see how much Glassons has grown over the last 5 years (particularly in Australia) the more I'm in awe of what Di Humphries did to turn Glassons around and set that new direction.

HLG wouldn't be where it is today without Di's efforts back then

Great job Di

[entrep]

Glad I found this forum, just wanted to say there's some great posts in this thread. Thank you! Will need to add HLG to my shopping list this Xmas.

[Waltzing]

 upgraded results 17th feb ... not far away just 8 weeks...

 OIl down again strong Kiwi ... and hopefully la nina gives some sunny days..

[BlackPeter]

...

We will have to wait and see my friend but I've got a TON of shares, (and I think you know I am not talking about 100 shares lol), so I'm off to a good start 

ton, unit of weight in the avoirdupois system equal to 2,000 pounds (907.18 kg) in the United States (the short ton) and 2,240 pounds (1,016.05 kg) in Britain (the long ton). The metric ton used in most other countries is 1,000 kg, equivalent to 2,204.6 pounds avoirdupois.

So many options, but 100?

[winner (n)]

So many options, but 100?

Wonder what Kane thinks when he scores a TON