9th August 2016
HALLENSTEIN GLASSON HOLDINGS LIMITED
TRADING UPDATE FOR FULL YEAR ENDED 1 AUGUST 2016
The Company advises that sales for the 12 months ended 1 August 2016 were
$223.48 million which were marginally above the prior year ($221.52 million.)
Net profit after tax is projected at approximately $13.5 million, a decrease
of -22% on the prior year ($17.386 million.)
Whilst top line sales have been maintained in a very challenging environment
for apparel, there were 3 main factors that caused profit erosion:
1 A lower exchange rate has had a negative impact on gross margin which has
fallen 3 basis points from 59.3% in the prior year to 56.5% in the current
year. We have substantially consumed forward cover at unattractive rates and
purchases for the key December trading period will be made at a more
attractive rate.
2 Record mild temperatures on both sides of the Tasman during early winter
resulted in key winter categories failing to match last year sales. A return
to normalised winter temperatures has allowed the Company to trade through
winter stocks although this had been at a lower that usual margin.
3 Difficulties in securing effective management for Glassons business had
seen a lack of continuity fashionability which has impacted both sales and
margin. That key issue has been addressed and following the appointment of Di
Humphries in April 2016 significant work had been done to address those
issues. Since June we have started to see an improvement in performance and
we look forward to the new year with confidence.
The Group''s cash reserves remain healthy and future cash flow is projected to
be positive. Given current trading trends the expectation is that December
dividend will remain at historic levels.
A full profit release will be made to the market on 23 September 2016.
Graeme Popplewell
Group CEO
+64 21738728
End CA:00286877 For:HLG Type:FORECAST Time:2016-08-09 08:30:01