HALLENSTEIN GLASSON HOLDINGS LIMITED
RESULTS FOR FULL YEAR ENDED 1 AUGUST 2017
The company advises that Group sales for the 12 months to 1 August 2017 were
$239.00 million, an increase of 6.93% over the corresponding period last year
($223.51 million). The audited net profit after tax was $17.27 million, an
increase of 26.24% over the corresponding period last year ($13.68 million).
The 2016/17 financial year has shown solid growth over the prior year with
the first half being stronger than the second half. The improved buying
strategy, focus on cost control and a favourable exchange rate led to the
significant net profit improvement. The trading environment has remained
tough in both New Zealand and Australia, however the brands have adapted and
responded to these challenges to deliver the strong result.
Segment Results
Glassons New Zealand
Sales for the year were $89.50 million, an increase of 7.16% on the prior
year. Although the second half was not as strong as the first, Glassons
continued to deliver margin growth. A key driver in performance over the 12
months has been improvement in fashionability and speed to market. During the
year a new store was opened in Christchurch CBD and one underperforming store
in Glenfield was closed.
As previously announced, at the beginning of this month Di Humphries, the CEO
of Glassons resigned, she has left a strong management team in place who will
continue to drive the business. A search is currently underway to find her
replacement.
Glassons Australia
Sales for the year were $50.06 million, an increase of 21.57% on the prior
year. The strategy to roll out the new concept stores has been successful
along with the improved fashionability and speed to market. This has resulted
in continued growth in Australia despite a particularly tough market for
retail. The store portfolio continues to be reviewed and in the last year
there has been 3 new stores opened, 3 non profitable stores closed and 6
stores refurbished to the new concept format. Investment will continue in
Australia as we are encouraged by the results over the year. There are
currently plans to open 2 new stores including the first Australian CBD store
in Melbourne.
Hallenstein Brothers
Sales for the year were $91.10 million (including Australia), an increase of
1.89% on the prior year. The increase was driven by a much improved second
half as the brand refocused and continued to differentiate in the market.
Hallenstein Brothers continues to build on its established market position in
New Zealand and during the last year has opened 3 stores in Australia. We
will continue to review the performance in Australia and based on the success
of these stores a decision will be made on any further rollout. Two new
stores were opened in Newmarket and Christchurch CBD and one underperforming
store was closed in The Hub in Christchurch.
Storm
Sales for the year were $8.34 million, a decrease of 11.24% on the prior
year. Sales struggled to maintain momentum during the year due to tough
trading in a highly competitive segment of the market. This has not been
helped by major infrastructure works around 3 key Auckland stores which has
had a material impact on trade. A review of the brand was carried out towards
the end of the year and the decision made to close the Storm store in
Australia to focus on the brand in New Zealand, this has seen trading
improve. Christchurch CBD store opened this year replacing the Christchurch
Container Store and a new store was opened in Queenstown. There were also
one-off costs associated with the closure of Storm Australia.
E-Commerce
Online sales continue to grow at a significantly greater rate than bricks and
mortar stores, as a result of the company''s commitment to build and invest in
digital. For the last financial year online sales grew 44% which now
represents over 9% of Group turnover. We will continue to invest in
technology and resources in this area to ensure that growth continues in this
strategic area of the business.
Dividend
The Directors have declared a final dividend of 17 cents per share (fully
imputed) to be paid on 18th December 2017. Together with the interim dividend
of 14.5 cents per share paid on 13th April 2017 the dividend for the full
year is 31.5 cents per share.
During the year capital expenditure was $12.138 million, which was
considerably higher than historic levels of circa $6 million. This was
primarily due to a higher number of new and refurbished stores in Australia,
together with relocating all chains back to the Christchurch CBD. We
anticipate capital expenditure will return to historic levels in the new
financial year. The balance sheet continues to be strong, inventories well
controlled and the current trading patterns have allowed the company to
increase the dividend payment.
Future Outlook
The first 7 weeks of the new financial year has seen sales grow +5.48% on the
prior year. The improved buying strategy has allowed the gross margin rate to
also increase on last year. Customers have reacted well to new seasons stock
and web sales continue to show increased rates of growth. The company is
continuing to invest in stores with refurbishments planned for both
Hallenstein Brothers and Glassons in Queensgate shopping centre in Wellington
this season and 2 new stores in Australia. The group is focused on ensuring
our performance going into Christmas trading.
An update on performance will be provided at the Annual Meeting of
Shareholders in December 2017.
Mark Goddard
Group CEO
+64 21 194 7035
End CA:00307911 For:HLG Type:FLLYR Time:2017-09-28 09:01:26