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- Release Date: 08/02/12 10:30
- Summary: FORECAST: HLG: Trading Update and Earnings Guidance
- Price Sensitive: No
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HLG
08/02/2012 08:30
FORECAST
REL: 0830 HRS Hallenstein Glasson Holdings Limited
FORECAST: HLG: Trading Update and Earnings Guidance
TRADING UPDATE AND EARNINGS GUIDANCE
Revenue
The Company advises that group sales for the 6 months ended 1 February 2012
were $108.56 million, an increase of 7.9% over the prior year ($100.61
million).
CEO Graeme Popplewell said that the sales improvement had been achieved
despite a difficult retail environment in both New Zealand and Australia. In
particular record Christmas sales and a strong January had underpinned
performance in the New Zealand market.
Sales for Glassons were +7% (same store +8%) in New Zealand, and +13% (same
store +13%) in Australia. Hallensteins were +5% (same store +5%), and Storm
+26% (same store +7%). It has been particularly pleasing to see the sales
improvement in Australia where we are clearly gaining market share in a very
competitive environment. However there is still some way to go in Australia
before we can return a level of profitability acceptable to the board.
Earning Guidance
Net profit after tax for the period is projected to be in the range of $8.7
million to $9.0 million, an increase of approximately 25%.
Gross margin on sales was 57.1%, a small improvement on the prior period
(56.6%). To hold on to our gross margin in such an intensely competitive
environment has been a key driver in improving earnings.
Future Outlook
We anticipate it will be a difficult challenge to continue the earnings
momentum over the balance of the financial year. A consumer conditioned to
paying less than full price, rising rents, wages, and the increased cost of
goods from China in particular will present us with some real obstacles to
overcome moving forward.
The embedded practice of annual rent increases in excess of CPI that major
shopping centre owners are enjoying is increasingly making specialty retail
in some centres a marginal proposition, and in common with other retailers we
are carefully reviewing our store portfolio.
Sales on the internet continue to present an opportunity and strong progress
has been made over the past 6 months in growing our sales on the internet. We
will continue to give strong focus to our digital stores which will clearly
become an increasingly significant part of the business in the future.
Full Earnings Announcement
A full announcement on the 6 months earnings to 1 February 2012 will be
released to the market on 28 March 2012.
Graeme Popplewell
CEO
+64 21738728
End CA:00219279 For:HLG Type:FORECAST Time:2012-02-08 08:30:18
