Hallenstein Glassons reports flat result

By Phil Boeyen, ShareChat Business News Editor

Tuesday 25th September 2001

Sales are up but profit is not at clothing retailer Hallenstein Glassons (NZSE: HLG).

For the twelve months ended July HLG made a profit of $11.4 million, very slightly up on last year's $11.3 million.

Sales grew 4.3% to $167.3 million from $160.4 million previously. Given that first-half sales only rose 1.3% on the previous year, much of this growth has come from the second half of the year.

In New Zealand the company says the cold winter and stronger economy, lead by the rural recovery, helped improve sales at both Hallensteins and Glassons stores but it doesn't say how well the Australian stores fared in the second half.

Earlier in the financial year the Australian stores were hurt by a downturn in consumer spending due both to the Olympics and the introduction of GST.

During the year the company opened two new Hallensteins stores in Auckland and two in Melbourne but closed four smaller stores around New Zealand.

Womenswear retailer Glassons also opened two new Auckland stores during the year and three new stores in Australia.

The company says Glassons has continued to build its Australian based infrastructure, both in terms of its Australian based executive team, and its distribution capability. While these have added extra costs in the short-term the company maintains they are important for longer term positioning of the chain.

All HBK stores have now been converted to only offer girlswear but because the company does not provide a breakdown of divisional revenue it is hard to say how the stores are doing.

Overall the company has improved its gross trading margin for the year, which has risen to 42.9% from 42% the previous period. End of year inventories stood at $11.8 million compared with $11.11 million last year.

HLG says prior to the last two weeks it was reasonably optimistic for the current financial year with the New Zealand economy holding up reasonably well against a tightening world economy.

"However, the recent terrorist attacks in the USA and possible USA military reprisals have made the world, including New Zealand particularly uneasy at present. This is not helpful to "consumer spending confidence" so the impact on the company's business is difficult to determine at present," the company says.

"Company sales for the new financial year to date are ahead of the same period last year, but it is early in the summer season."

Directors have declared a final dividend of 9.5 cents per share.

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