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Hallenstein Glasson lifts 1H profit 15 percent, sales lag as weather stays warm

Wednesday 27th March 2013

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Hallentein Glasson, which runs the clothing chains for which it's named, lifted first-half profit 15 percent to meet the bottom of its own forecast range, and has struggled to gain traction due to unseasonally warm weather.

Net profit rose to $10.3 million, or 17.39 cents per share, in the six months ended Feb. 1, from $9.8 million, or 15.14 cents, a year earlier, the Auckland-based company said in a statement. That was at the bottom of its $10.3 million to $10.5 million guidance range, offered last month. Revenue rose 6.5 percent to $115.7 million in the period.

Group sales are down 1 percent in the first seven weeks of the new season from a year earlier, and the retailer isn't optimistic about a turnaround in the sector. No annual guidance was offered.

"The first seven weeks of the new season have been a challenge with record warm temperatures making it difficult to get traction for the winter season both in Australia and New Zealand," the company said. "We do not expect the retail environment to show any significant uplift, and are working on the premise that conditions will be very competitive."

The shares were unchanged at $5.50 yesterday, and have gained 5 percent this year. The stock is rated an average 'hold' based on five analyst recommendations compiled by Reuters, with a median target price of $4.755.

Hallenstein Glasson's board declared an interim dividend of 16 cents per share, paid on April 19 to shareholders registered on April 12.

The retailer's Hallenstein stores lifted sales 6 percent to $43.8 million for a 21 percent increase in profit to $5.1 million. Glassons New Zealand lifted sales 2 percent to $45.9 million with profit up 13 percent to $4.6 million.

The Glassons Australia unit increased sales 13 percent to $21.4 million, though it widened its loss to $600,000 with sales falling short over December and January. The unit also booked a $500,000 cost for store relocation and restructuring.

The Storm brand boosted sales 39 percent to $4.7 million with profit rising to $822,000 from $476,000 a year earlier.

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