Hallenstein Glasson Holdings Limited Analysis

Overview

The present company was the vehicle for the merger of Hallensteins and Glassons retail chains in 1985. The company's stores cater for the medium priced-quality end of the market, and the group's property assets are principally occupied by Hallensteins and Glassons stores.

In June 2003, the company decided to withdraw its Hallensteins menswear chain from Australia and focus expansion on the Glassons womenswear chain.

In March 2004 it agreed to sell its HBKGirl outlets. In September 2007 the group's total stores stood at 111, including 25 in Australia.

In May 2008, HLG moved its Glassons buying team to Melbourne for the purposes of moving its `core function' to the `growth opportunities' that are present within the Australian market.

Performance

The following information was extracted from Hallenstein Glasson Holdings Limited's full year results, released on 30 September 2024:

RESULTS FOR FULL YEAR ENDED 1 AUGUST 2024

The Company advises that Group sales for the 12 months to 1 August 2024 were $435.6 million, an increase of 6.3% on the prior year ($409.7 million), with an improved gross margin of +210 basis points.

The audited net profit before tax for the 12 months was $52.1 million, an increase of +14.7% on the prior corresponding period ($45.4 million).

Group audited net profit after tax was $34.5 million (prior year $32.0 million). This includes a net non-cash deferred tax expense of $1.1 million connected to changes in tax legislation on the deductibility of depreciation on non-residential buildings. This is a pleasing result given the difficult retail environment in Australasia, and in particular New Zealand.

Gross margin at 59.4% grew from 57.3% in the prior year. Margin growth was due to a focus of onboarding new suppliers, an improvement in freight costs, and most significantly well controlled stock levels resulting in more full-price sales and lower discounting. This is despite a challenging foreign exchange rate for inventory purchases, which was lower than the prior corresponding period.

The Group continued to focus on improved product and sourcing, as well as managing operating costs wherever possible given the current economic environment. Inventory levels were tightly managed, improving stock turn year on year, driving improved liquidity. This gives the Group the flexibility needed to adjust to the trading environment and consumer preferences while executing our core business strategy.

The Group maintains a strong balance sheet with a cash balance of $45.9 million at the end of FY24, up $13.4 million on the previous year.