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Hallenstein first-half profit up 35pc

NZN 29/03/2017 Tina Morrison

Hallenstein Glasson has posted a 35 per cent increase in first-half profit, meeting its forecast. And it says early winter sales are "encouraging".

Profit rose to $9.2 million, or 15.4 cents per share, in the six months ended February 1, from $6.8 million, or 11.43 cents, a year earlier, the Auckland-based retailer said in a statement.

That matched its forecast for profit of $9 million and $9.2 million.

Sales gained 9.4 per cent to $122.9 million, while selling, distribution and administration expenses rose 7.6 per cent to $59 million.

The retailer said its profitability improved, with the gross margin on sales lifting to 58.1 per cent from 56.8 per cent in the year-earlier period, reflecting an improved exchange rate and after it negotiated better product cost prices.

The company's fortunes are starting to lift after profit fell by a fifth last year as a decline in the kiwi dollar made imports more expensive, squeezing its margins, while its women's clothing chain Glassons struggled.

Under the leadership of Di Humphries, Glassons first-half sales and profits improved in Australia and New Zealand, although the group's menswear chain Hallenstein Brothers and fashion brand Storm were weaker.

The company said group sales for the first seven weeks of the 2017 winter season had been "encouraging", up 5 per cent on the year-earlier period, and the gross margin continued to show a small improvement over last year.

First-half profit at Glassons New Zealand jumped to $4.1 million from $1.4 million in the year-earlier period, as sales increased 18 per cent to $45.8 million.

In Australia, Glassons turned to a profit of $1.2 million from a loss of $785,000, and sales rose 23 per cent to $26 million, as it opened two new stores, refurbished three stores and closed two non-profitable stores.

At the Hallenstein Brothers chain, profit fell 34 per cent to $3.6 million as sales slipped 2.1 per cent to $46.9 million.

The company will pay a first-half dividend of 14.5 cents per share on April 13, up from the 13.5 cent payment last year.

Its shares rose 3.3 per cent to $3.49 and have gained 20 per cent over the past year.

The group confirmed its new chief executive Mark Goddard will start mid-April, replacing Graeme Popplewell.

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