Daily ShareChat: Hallenstein Glassons

Hallenstein Glasson Holdings advise that its first-half net profit will be down between 13% and 18% on the previous year was in contrast to his expectation the result would be slightly up on the previous year, says Guy Hallwright, an analyst at Forsyth Barr.

Hallenstein expects net profit for the six months ended February 1 will be between $7 million and $7.4 million with sales down 1.6% with the company reporting difficult trading conditions in both New Zealand and Australia, particularly in women's fashion.

"Much will depend on the autumn/winter season with Hallenstein's largest business, (womenswear chain) Glassons New Zealand having a strong second-half skew to sales and profit," Hallwright says.

"Assuming a less negative trend in the second half, resulting in total sales approximately flat for the year and cost control measures offsetting some margin slippage, we are now forecasting an $18.2 million profit in full-year 2011, a 12% downgrade," he says.

"However, autumn/winter weather patterns could alter this significantly."

Hallwright has also cut his 2012 forecast by 8% and lowered his valuation of the stock by 13 cents to $4.17

Hallenstein has said it intends maintaining its dividend at last year's rate. "While this may refer only to the first half, we are assuming a flat full-year 2011 dividend," he says.

Recommendation: Hold

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