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Daily ShareChat: Hallenstein Glasson Holdings

By Jenny Ruth

Thursday 1st April 2010

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 Jenny Ruth

Hallenstein Glasson Holdings produced a solid first-half net profit of $8.5 million, above its guidance of between $8.1 million and $8.4 million and above her $8.3 million forecast, says Buffy Gill, an analyst at Goldman Sachs JB Were.

The company's net profit margins were up at 9.7% compared with 7.9% in the previous first half and the New Zealand sales momentum improved, Gill says.

Despite Australian sales being boosted in the previous first half by government stimulus measures, sales rose 9.3% in New Zealand dollar terms and net profit margin was positive for the first time since the first half of 2007, ending two-and-a-half years of losses in Australia, she says.

Operating costs also fell.

"Management is rolling out a brand update for Glassons, which should enhance the brand's perception and positioning in New Zealand, timely given Topshop's recent announcement to open its first store in New Zealand in Takapuna."

The improved margins and lower costs have led Gill to raise her full-year forecast net profit to $16.5 million from $14.9 million previously.

"Whilst we are confident that Hallenstein will continue to deliver a solid dividend yield, we are not expecting sufficient capital growth for the stock to rank as a Buy versus our expected market return of 18%," she says.






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