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Hallenstein first-half profit beats guidance, 'cautiously optimistic' on outlook

Thursday 25th March 2010

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Hallenstein Glasson Holdings, owner of the men’s and women’s clothing chains, beat its guidance on first-half profit, which surged 56%, and said it is ‘cautiously optimistic’ on the outlook. 

Net profit jumped to $8.5 million, or 14.33 cents per share, in the six months ended February 1, from $5.5 million, or 9.19 cents, a year earlier, the Auckland-based company said in a statement. That’s more than the company’s guidance announced in January of between $8.1 million and $8.4 million. Revenue gained 6.9% to $102.3 million.  

“The effect of improved sales, increased margin and tight control on costs has all combined to lift profits towards the levels previously achieved,” said chairman Warren Bell. “Strong trading over the Christmas period and early January cemented what had been a steady improvement during the period.” 

Hallenstein joins a growing number of retailers, including Briscoe Group, Kathmandu Holdings and Michael Hill International in seeing signs of a recovery in consumer confidence, albeit a slow one. Retail sales rose 0.8% in January, though the headline figure was underpinned by an increase in vehicle-related spending.  

The clothing retailer said sales volumes were down 2% in the first seven weeks of the second half, though the margin was ahead of the same period last year, which was marred by “strong discounting.”

Hallenstein will pay an interim dividend of 14 cents per share, compared to 10 cents a year earlier. The shares were unchanged at $3.45, and have gained 3% this year.  

The company said it has resumed capital expenditure projects that were curtailed last year, including new look Glasson’s stores in Palmerston North and Christchuch, and the new format will be rolled out to its Newmarket outlet later in the half.  

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