Sun Shines On Hallenstein Glasson Performance

Sun Shines On Hallenstein Glasson Performance And Dividend Increased On Profit Growth

Trans Tasman fashion retailer Hallenstein Glasson put the fickle start to summer behind it and delivered a record unaudited after tax operating profit of $8.47 million for the six months ending February 1, 2005, up 21% on the corresponding period.

This lifted earnings per share for the period by 2.5 cents to 14.4 cents.

On the strength of the first half performance, directors have lifted the fully imputed interim dividend to 13 cents, up 30% or 3 cents.

The key to Hallenstein Glasson’s success in the six months was excellence in product ranging, stronger marketing, and getting that critical balance right between fashion, quality and price said Group Managing Director, Cliff Kinraid.

“Along with other apparel retailers we too experienced a slow start to December trading, but our stock offering was right in line with our customers’ fashion expectations.

“Against this background, the performance for the six months was excellent.”

Revenue at $90.6 million was up 6% on last year when the sale of discontinued operations (HBK Girl Stores with 15 outlets) are factored out of last year’s $90.7 million revenue figure.

The provision for taxation at $4.2 million is up 21%.

Chairman Warren Bell said New Zealand sales remained the cornerstone of the company’s operations, but that the excellent progress that continued to be made in Australia was a standout feature.

“Sales from our Glasson shops in Australia increased by 31% to $10.2 million, and our initiatives in Victoria and New South Wales are giving us good growth impetus,” said Mr Bell.

“In Australia we posted an after tax operating profit of $114,000 (against a $396,000 loss), a significant milestone in our development as a trans Tasman retailer.”

Mr Kinraid said that the company has invested heavily in developing its infrastructure in terms of senior personnel that understand the Australian consumer and in an appropriate distribution network.

“That infrastructure is capable of supporting many more stores than the current 16 we have in Australia,” he said.

“During November we opened a further store in Melbourne, and this has been trading to our expectations. Within the next year we will add an additional four or five provided we can access the right locations. An additional store will open next week in Sydney, bringing total store numbers in Australia to 17.

“Our approach to growth in Australia will continue to be measured, with a focus on achieving acceptable levels of profitability.

“Australia holds out enormous promise for us, and based on current success believe we have the formulae on the right track.”

Mr Kinraid said New Zealand sales at $80.4 million were up 4% excluding discontinued operations.

“Excellent stock control and a focus on costs enabled us to maintain our gross margins.”

Total assets at period end were $68.7 million, an increase of $11.6 million in six months.

Mr Bell said while retailing will always be a volatile environment, “our achievements in the first six months in what was a demanding retail environment give us every confidence that we have the brands, the retailing experience and the products to continue to make solid progress”.

The company’s support of the Breast Cancer Research Trust continues to receive excellent support, and it is on track to exceed the $500,000 donation made to this charity in the 2004 financial year.

The dividend will be paid on April 22, 2005, to those shareholders on the register at 5pm on April 15, 2005.

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