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Investors eye steady plodder carefully

Friday 7th November 2003

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Frayed menswear sales in Australia and another flat profit could be starting to play on the minds of investors in Hallenstein Glasson Holdings (HLG).

Fund manager AMP Henderson recently sold down its holding to below 5% as the retail company warned of tough trading ahead while reporting an after-tax profit of $11.4 million for the year August 1.

AMP had built up a $15.8% stake on a strong rising trend in the share price but has since sold down gradually.

The price is still at all-time highs and the stock carries an attractive dividend yield but the promise of future value is fading.

The result came in at virtually the same as last year, on a 1% increase in revenue from $175.1 million to $177 million.

A combination of fierce competition, exchange rate movements and changes in customer shopping patterns, have made it difficult for HLG to expand its business.

The group, which runs the Hallensteins menswear, Glassons womenswear and HBK Girl clothing stores in New Zealand and Australia, has built its store chain steadily but was forced to withdraw its menswear brand from Australia after poor results.

Chairman Warren Bell said the latest result reflected a trading year in which the apparel market had been subject to aggressive discounting as competitors fought for market share.

Bond Offer: Infratil Ltd, 7.2 year & 10.2 year unsecured unsubordinated bond

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