Announcement
FLLYR: HLG: HLG Full Year Results for the period ending 1 August 2020
09:37am
HLG
25/09/2020 09:37
FLLYR
PRICE SENSITIVE
REL: 0937 HRS Hallenstein Glasson Holdings Limited
FLLYR: HLG: HLG Full Year Results for the period ending 1 August 2020
25 September 2020
HALLENSTEIN GLASSON HOLDINGS LIMITED
RESULTS FOR FULL YEAR ENDED 1 AUGUST 2020
The Company advises that Group sales for the 12 months to 1 August 2020 were
$287.76 million which were +0.1% up on the prior year ($287.55 million).
The audited net profit after tax for the 12 months was $27.77 million, a
decrease of 4.29% on the prior corresponding period ($29.02 million).
Overall sales were maintained in an extremely challenging environment,
predominantly due to the increased level of online sales from April 2020
onwards. During the last six months stores in both New Zealand and Australia
were closed on 26 March with New Zealand stores opening on 14 May and
Australian stores opening during May. The web shops in New Zealand for both
brands were closed from 26 March 2020 but did reopen to sell essential
products from 4 April and then all product from 27 April.
The Gross Margin was affected by a number of issues throughout the financial
year including unfavourable exchange rates with the US Dollar in both New
Zealand and Australia as well as challenges with freight costs resulting from
the impact of COVID-19. Over the financial period, costs were well controlled
with additional controls implemented post the lockdowns including reducing
operating costs, claiming of government wage subsidies, extending supplier
terms were appropriate, placing capital projects on hold, negotiating rent
relief with landlords and the Directors, Executives and support office staff
taking short term reductions to their salaries.
The Group continues to take steps to preserve liquidity, particularly
managing stock levels and costs across the business. The rental negotiations
with landlords for the lock down period are still ongoing.
Glassons - New Zealand & Australia
Sales in New Zealand for the year were $102.60 million, an increase of 1.86%
on the prior year.
Over the last year the outlet store in Hornby, Christchurch was refurbished
and the Cuba Mall, Wellington store was moved to a brand-new location and
fully refurbished. In July, the store in Tauranga CBD was closed.
Sales in Australia were $96.69 million which was an increase of 8.03% on the
corresponding period.
During the year, a new store was opened in Robina on the Gold Coast, a pop-up
site in Birkenhead Point, Sydney and the Eastgardens store in Sydney was
increased in size and completely refurbished. In the last 12 months stores in
Chatswood and Hurstville, both in Sydney, were closed. There are currently
further sites being reviewed for potential openings around Australia to
support the planned growth.
A new larger Fulfilment Centre was opened in Christchurch towards the end of
2019 and the new Fulfilment Centre in Sydney was opened in February. These
facilities were instrumental to support the significant growth in online
sales.
With the trajectory in online sales there has been significant investment in
digital including relaunching the website and a planned launch of an
omni-channel Glassons app later in the year.
Glassons maintains a key focus on fashion, bringing the latest trends that
customers want to the market. The team are doing this with agility and an
increasing emphasis on sustainability. We continue to focus on customer
centricity, engaging customers regularly and evolving product to meet
customer demand. This helps Glassons to maintain a strong brand position in
both markets.
Hallenstein Brothers
Sales for the 12 month period were $88.48 million (including Australia), a
decrease of 9.09% on the prior period.
Sales were more challenging in the second half of the year as demand for
Tailored product diminished with the impact of lockdowns on people working
remotely and restrictions on gatherings. However, sales results in the
casual categories are encouraging and have outperformed over the financial
year.
In New Zealand, the outlet store in Hornby, Christchurch was refurbished in
the last 12 months and the CBD store in Tauranga was closed.
The journey continues with the repositioning of the brand and improving
profitability with a successful New Zealand based marketing campaign and
increasing local digital content. Product also remains integral to our
performance with a sustainable focus and improvements in product quality
across core categories. Customer engagement is at the forefront of service
delivery both instore and online.
E-Commerce
Online sales grew over the period by 46.87% against last year with an
exceptional growth of 80.1% within the second six months of the financial
year. Online sales now represent 21.88% of total sales for the full financial
year but represented 30.30% of the total sales for the second half of the
year. The growth in online sales have continued into the new financial year
being ahead of last year.
The previous investment in fulfilment centres has been effective in
supporting the Groups online sales growth. There will be continued
investment in digital as we continue to accelerate online sales growth and
focus on an omni-channel experience for our customers.
Dividend
The Directors have declared a final dividend of 24 cents per share (fully
imputed) (24 cents per share last year) to be paid on 15th December 2020.
Together with the interim dividend of 15 cents per share that was paid on 4
September 2020, the full year dividend is 39 cents per share. The final
dividend payment is able to be maintained as the Company's balance sheet
continues to be strong, and inventories well controlled.
Future Outlook
Following Auckland moving to Level 3 on Wednesday 12 August, thirteen
Hallenstein Brothers stores and twelve Glassons stores were closed and
reopened on 31 August 2020. Eleven stores in Victoria Australia have been
closed since July with the current planned opening to be 26th October 2020 in
line with State Government guidelines. Despite these closures the Glassons
Australia business continues to perform ahead of last year.
The first eight weeks of the new financial year have seen Group sales grow
+10.71% on the prior year, this has been driven predominantly by online sales
as physical store growth has been slower, particularly in CBD locations.
Whilst this is a positive result the Company will continue to be cautious in
regard to the future impacts of COVID-19.
An update will be provided at the Annual Meeting of Shareholders in December
2020.
Mary Devine
Group Managing Director
+64 21 998 351
End CA:00360395 For:HLG Type:FLLYR Time:2020-09-25 09:37:59
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