28 Mar 2013

Hallenstein Glasson reports 15% profit increase

8:07 am on 28 March 2013

The company made $10.4 million in the six months to the beginning of February, an increase of 15% on the same period a year earlier.

The listed retailer says there has been significant improvement in the period, with total sales rising 6.6% to nearly $116 million.

In New Zealand, sales at stores open at least a year - a key indicator of the firm's profitability - rose 8% at menswear chain Hallensteins and a more modest 2% at Glassons, while Storm enjoyed a 27% jump.

The firm's Australian operations lost $600,000, most of which resulted from the cost of relocating stores and restructuring the business there.

The clothing retailer said sales at Glassons outlets in Australia in December and January did not meet expectations.

Warm weather on both sides of the Tasman has curbed winter season purchases; Hallensteins sales were down 1% in the first seven weeks of trading in the second half of the year.

Although cooler weather is now prompting more people to buy winter gear, the retailer is not expecting any significant growth in the sector.

Craig's Investment Partners head of research Mark Lister says Hallenstein Glasson is in a good position in the market despite a downturn in its Australian operations.

"Still a very good result, the dividend was lifted, everything looked like it was going in the right direction."

He says Hallenstein Glasson has been very good at delivering and is a well run business which keeps quite tight controls on costs and inventories, so people are likely to remain comfortable with where the company is positioned.

The company will pay a higher half-year dividend of 16 cents a share.

Hallenstein Glasson shares rose 18 cents or 3% on Wednesday to $5.70.