Hallensteins Glassons' interim net profit should be 50% up on last year when it is revealed tomorrow, but the company is still some way from fully recovering from the battle for market share during the downturn.In January, the clothing retailer revealed t
Hallensteins Glassons’ interim net profit should be 50% up on last year when it is revealed tomorrow, but the company is still some way from fully recovering from the battle for market share during the downturn.
In January, the clothing retailer revealed that with higher sales during the key holiday trading months, it was projecting that its net profit for the six months ending January would be in the range of $8.1 million and $8.4 million.
That result is 50% higher than last year’s figure of $5.48 million, but still down on the 2008 result of $9.24 million.
Its full year result - revealed in September - saw its net profit fall 19.3%.
Chairman Warren Bell told shareholders at December’s annual meeting that the battle for market share during the downturn had led to margin erosion
He said that by the end of 2009, retail conditions had stabilised at a lower level, but that the company had still managed to strengthen its balance sheet during the slump in consumer demand.
Since that meeting, sales at the company’s various clothing outlets rose by 10.7% during December and January, helping push sales for the first half of the year up to 6.7%.
Those figures bucked the national trend of flat sales, with core retail figures for January up by just 0.3%.
Other retailers, including The Warehouse, have seen relatively flat results over the past six months, although Kathmandu did buck the trend with a local increase in same store sales of more than 13%.
Investor confidence in the company appeared to improve over 2009, with the retailer’s share price (NZX:HLG) rising from an all time low of less than $2 this time last year to currently hover around the $3.50 mark.
The company has already shown its guarded confidence in the future with the early issue of its higher interim dividend.
The dividend – which will be paid on Friday – is up four cents on the previous year to 14c, although this is also below the 2008 payout of 17c.
If tomorrow’s result does show a strong improvement for the half year, it will be a good place to start for new chief executive Stephen Timms.
Mr Timms, who previously served as group chief operating officer for Ascendia Retail in Australia, will formally take over from acting chief executive Roy Dillon at the end of this month.
