Results for the 6 months ended 1 February 2019

29 March 2019
HALLENSTEIN GLASSON HOLDINGS LIMITED

UNAUDITED RESULTS FOR 6 MONTHS ENDED 1 FEBRUARY 2019

The Company advises that Group sales for the six months to 1 February 2019 were $151.24 million,
an increase of 3.1% over the corresponding period last year ($146.76 million). Net profit after tax
was $16.04 million, an increase of 5.9% over the corresponding period last year ($15.14 million). The
result is in line with the guidance announced to the NZX on 13 February 2019. The prior year figures
include the financial results for the Storm business, which has since been sold.

Gross margin on sales was 59.7% compared with 61.5% in the prior corresponding period, this was a
result of higher promotional activity due to the competitive market place particularly during
November and December. The cost of doing business fell over the six-month period, continuing to
be well controlled into the current trading period.

Segment Results

Glassons

Sales in Australia were $48.45 million for the six month period, which were up 15.9% against the
prior corresponding period. There were three stores refurbished during the season in Bondi,
Parramatta and Highpoint and two new stores were opened in The Glen in Melbourne and Liverpool
in Sydney. A number of new stores are currently under consideration.

Sales in New Zealand were $51.11 million, which was up 1.6% against the same period last year. The
Dunedin store was refurbished during the six month period and there was significant strategic
investment in digital. The Newmarket store is currently being refurbished and upgrades to the
Bayfair, Palmerston North and Te Rapa stores are planned for the Winter season.

As with last season, the focus will be on fashion, speed to market and customer service to keep the
brand in a strong position in both New Zealand and Australia.

Hallenstein Brothers

Sales for the six month period were $51.69 million (including Australia), with sales growing 1.3%
against the same period last year. The brand continues to build on its market leading proposition in
New Zealand, and the three stores in Australia are delivering solid growth. During the period, the
Hallenstein Brothers Fulfillment Centre was extended to support the growth of online sales.
Investment in the brand is ongoing with a new store opening in Frankton, Queenstown in May and
with the Botany, Bayfair and Te Rapa stores being refurbished during the Winter season.

E-Commerce

Digital sales now represent over 14% of total Group sales and this is continuing to grow. The key
marketing focus for both Glassons and Hallenstein Brothers is building digital engagement. This
remains a key area of investment for the Group.

Dividend

The Directors have declared an interim dividend of 20 cents per share (fully imputed) (last year 20
cents per share) to be paid on 18 April 2019. The balance sheet continues to be strong, inventories
well controlled and the current trading patterns have allowed the Company to maintain the dividend
payment.

Future Outlook

Although the trading environment in both New Zealand and Australia is still challenging, it has been
encouraging that Group sales for the first seven weeks on the 2019 Winter season are +1.5% ahead
of the same period last year. Following the appointment of Mary Devine from 1 April 2019 as the
new Group Managing Director, the business will continue to focus on building digital engagement
with our customers, cost control and improving our market share in the New Zealand and Australian
fashion apparel sector in which we operate.


Warren Bell
Chairman

---

HALLENSTEIN GLASSON HOLDINGS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 1 February 2019 (unaudited)
1


Half Year
ended
1/2/19
Half Year
ended
1/2/18
$000
$000
Sales revenue
151,244


146,757


Cost of sales
(60,995)


(56,551)


Gross profit
90,249


90,206


Other operating income
399


423


Selling expenses
(51,622)


(51,396)


Distribution expenses
(4,252)


(3,894)


Administration expenses
(12,373)


(14,320)


Total expenses
(68,247)


(69,610)


Operating profit
22,401


21,019


Finance income
133


136


Profit before income tax
22,534


21,155


Income tax expense
(6,494)


(6,013)


Net profit after tax attributable to the shareholders of the Holding Company
16,040


15,142


Other comprehensive income
- Items that will not be reclassified to profit or loss
Increase in share option reserve
62


64


- Items that may be subsequently reclassified to profit or loss
Fair value (loss)/gain (net of tax) in cash flow hedge reserve
(2,470)


1,057


Total comprehensive income for the year
13,632


16,263


Earnings per share
Basic and diluted earnings per share
26.89


25.39


Group

HALLENSTEIN GLASSON HOLDINGS LIMITED
STATEMENT OF FINANCIAL POSITION
As at 1 February 2019 (unaudited)
2


As at 1/2/19
As at 1/2/18
As at 1/8/18
(Restated)
$000
$000
$000
EQUITY
Contributed equity
27,955


27,060


27,818


Asset revaluation reserve
15,609


15,609


15,609


Cashflow hedge reserve
(731)


(597)


1,739


Share option reserve
204


95


155


Retained earnings
24,756


22,729


23,019


Total equity
67,793


64,896


68,340


Represented by
CURRENT ASSETS
Cash and cash equivalents
9,223


18,318


17,453


Trade and other receivables
580


488


182


Advances to employees
275


201


464


Prepayments
4,295


4,645


3,871


Inventories
23,915


18,676


20,959


Derivative financial instruments
77


-


2,417


Total current assets
38,365


42,328


45,346


NON-CURRENT ASSETS
Property, plant and equipment
42,436


36,848


36,811


Investment property
8,464


8,464


8,464


Intangible assets
462


457


560


Deferred tax
2,321


2,515


940


Total non-current assets
53,683


48,284


46,775


Total assets
92,048


90,612


92,121


CURRENT LIABILITIES
Trade payables
4,004


7,236


5,506


Employee benefits
4,383


5,370


4,786


Other payables
11,511


9,222


10,777


Derivative financial instruments
1,092


842


-


Taxation payable
3,265


3,046


2,712


Total current liabilities
24,255


25,716


23,781


Total liabilities
24,255


25,716


23,781


Net assets
67,793


64,896


68,340


Group

HALLENSTEIN GLASSON HOLDINGS LIMITED
STATEMENT OF CHANGES IN EQUITY
For the six months ended 1 February 2019 (unaudited)
3


SHARE
CAPITAL
TREASURY
STOCK
ASSET
REVALUATION
RESERVE
CASH FLOW
HEDGE
RESERVE
SHARE
OPTION
RESERVE
RETAINED
EARNINGS
TOTAL
EQUITY
$000
$000
$000
$000
$000
$000
$000
Balance at 1 August 2017 (restated)
29,279


(2,009)


15,609


(1,654)


327


17,271


58,823


COMPREHENSIVE INCOME
Profit for year
-
-
-
-
-
15,142
15,142
Cash flow hedges net of tax
-
-
-
1,057
-
-
1,057
Increase in share option reserve
-
-
-
-
64
-
64
Total comprehensive income
-
-
-
1,057
64
15,142
16,263
TRANSACTIONS WITH OWNERS
Purchase of treasury stock
-
(750)
-
-
-
-
(750)
Sale of treasury stock
-
606
-
-
-
-
606
Transfer of share option reserve to
retained earnings
-
-
-
-
(296)
296
-
Dividends
-
94
-
-
-
(10,140)
(10,046)
(Gain)/loss on sale of treasury stock
transferred to retained earnings
-
(160)
-
-
-
160
-
Total transactions with owners
-
(210)
-
-
(296)
(9,684)
(10,190)
Balance at 1 February 2018
29,279


(2,219)


15,609


(597)


95


22,729


64,896


COMPREHENSIVE INCOME
Profit for year
-
-
-
-
-
12,219
12,219
Cash flow hedges net of tax
-
-
-
2,336
-
-
2,336
Increase in share option reserve
-
-
-
-
60
-
60
Total comprehensive income
-
-
-
2,336
60
12,219
14,615
TRANSACTIONS WITH OWNERS
Purchase of treasury stock
-
(50)
-
-
-
-
(50)
Dividends
-
83
-
-
-
(11,929)
(11,846)
Transfer to employee advances
-
725
-
-
-
-
725
Total transactions with owners
-
758


-
-


-


(11,929)


(11,171)


Balance at 1 August 2018
29,279


(1,461)


15,609


1,739


155


23,019


68,340


COMPREHENSIVE INCOME
Profit for year
-
-
-
-
-
16,040
16,040
Cash flow hedges net of tax
-
-
-
(2,470)
-
-
(2,470)
Increase in share option reserve
-
-
-
-
62
-
62
Total comprehensive income
-
-
-
(2,470)
62
16,040
13,632
TRANSACTIONS WITH OWNERS
Transfer of share option reserve to
retained earnings
-
-
-
-
(13)
13
-
Dividends
-
100
-
-
-
(14,316)
(14,216)
Transfer to employee advances
-
37
-
-
-
-
37
Total transactions with owners
-
137


-
-
(13)


(14,303)


(14,179)


Balance at 1 February 2019
29,279


(1,324)


15,609


(731)


204


24,756


67,793


Group

HALLENSTEIN GLASSON HOLDINGS LIMITED
STATEMENT OF CASH FLOWS
For the six months ended 1 February 2019 (unaudited)
4


Half Year
ended 1/2/19
Half Year
ended 1/2/18
$000
$000
CASH FLOWS FROM OPERATING ACTIVITIES
Cash was provided from:
Sales to customers
150,846


146,507


Rent received
399


384


Interest received
125


126


Interest on debtors
8


10


151,378


147,027


Cash was applied to:
Payments to suppliers
103,696


94,362


Payments to employees
25,914


25,609


Taxation paid
6,360


6,345


135,970


126,316


Net cash flows from operating activities
15,408


20,711


CASH FLOWS FROM INVESTING ACTIVITIES
Cash was provided from:
Proceeds from sale of property, plant and equipment and intangible assets
46


5


Repayment of employee advances
226


37


272


42


Cash was applied to:
Purchase of property, plant and equipment and intangible assets
9,694


4,798


9,694


4,798


Net cash flows applied to investing activities
(9,422)


(4,756)


CASH FLOWS FROM FINANCING ACTIVITIES
Cash was provided from:
Proceeds from sale of treasury stock and dividends
100


701


100


701


Cash was applied to:
Dividend paid
14,316


10,140


Purchase of treasury stock
-


750


14,316


10,890


Net cash flows applied to financing activities
(14,216)


(10,189)


Net (decrease)/increase in funds held
(8,230)


5,766


Cash and cash equivalents at the beginning of the period
17,453


12,552


Cash and cash equivalents at the end of the period
9,223


18,318


Group

HALLENSTEIN GLASSON HOLDINGS LIMITED
STATEMENT OF CASH FLOWS (CONTINUED)
For the six months ended 1 February 2019 (unaudited)
5


RECONCILIATION OF PROFIT AFTER TAXATION TO CASH FLOWS FROM OPERATING
ACTIVITIES
Half Year
ended
1/2/19
Half Year
ended
1/2/18
$000
$000
NET PROFIT AFTER TAXATION
16,040


15,142


ADD/(DEDUCT) ITEMS CLASSIFIED AS INVESTING OR FINANCING ACTIVITIES
(Gain)/loss on sale of plant and equipment
(34)


38


ADD/(DEDUCT) NON CASH ITEMS
Depreciation and amortisation
4,155


4,392


Deferred taxation
(419)


(857)


Revaluation of financial instruments
-


(12)


Share option expense
62


64


ADD/(DEDUCT) MOVEMENTS IN WORKING CAPITAL ITEMS
Taxation payable
553


524


Trade and other receivables and prepayments
(822)


(1,022)


Trade and other payables and employee benefits
(1,171)


513


Inventories
(2,956)


1,929


NET CASH FLOWS FROM OPERATING ACTIVITIES
15,408


20,711


Group

HALLENSTEIN GLASSON HOLDINGS LIMITED
SEGMENT INFORMATION
For the six months ended 1 February 2019 (unaudited)
6


For the period ended
1 February 2019
GLASSONS
NEW
ZEALAND
GLASSONS
AUSTRALIA
HALLENSTEIN
BROTHERSSTORM
HALLENSTEIN
PROPERTYPARENT
TOTAL
SEGMENTS
$000$000$000$000$000$000$000
INCOME STATEMENT
Sales revenue from external
customers51,110 48,447 51,687 - - - 151,244
Cost of sales(21,373) (18,264) (21,358) - - - (60,995)
Gross profit29,737 30,183 30,329 - - - 90,249
Finance income34 25 65 3 - 6 133
Depreciation and software
amortisation1,112 1,429 1,427 - 187 - 4,155
Profit/(loss) before income tax7,870 7,485 6,862 (52) 368 1 22,534
Income tax expense(2,212) (2,252) (1,942) 15 (103) - (6,494)
Profit/(loss) after income tax5,658 5,233 4,920 (37) 265 1 16,040
BALANCE SHEET
Current assets10,491 9,284 18,396 1,211 (1,822) 805 38,365
Non-current assets14,045 10,836 9,238 (58) 19,622 - 53,683
Current liabilities7,111 9,686 6,810 203 413 32 24,255
Purchase of property, plant and
equipment and intangibles3,731 3,076 1,282 - 1,605 - 9,694
For the period ended
1 February 2018
GLASSONS
NEW
ZEALAND
GLASSONS
AUSTRALIA
HALLENSTEIN
BROTHERSSTORM
HALLENSTEIN
PROPERTYPARENT
TOTAL
SEGMENTS
$000$000$000$000$000$000$000
INCOME STATEMENT
Sales revenue from external
customers50,294 41,814 51,029 3,620 - - 146,757
Cost of sales(20,491) (14,508) (20,143) (1,409) - - (56,551)
Gross profit29,803 27,306 30,886 2,211 - - 90,206
Finance income60 23 45 2 - 6 136
Depreciation and software
amortisation1,085 1,113 1,435 128 186 - 3,947
Profit before income tax7,618 8,249 6,976 (2,051) 360 3 21,155
Income tax expense(2,131) (2,312) (2,067) 598 (101) - (6,013)
Profit after income tax5,487 5,937 4,909 (1,453) 259 3 15,142
BALANCE SHEET
Current assets13,313 11,477 16,586 874 167 (89) 42,328
Non-current assets10,877 9,067 9,634 1,118 17,588 - 48,284
Current liabilities8,041 9,194 6,292 1,725 431 33 25,716
Purchase of property, plant and
equipment and intangibles1,460 1,991 1,207 122 18 - 4,798

---

Hallenstein Glasson Holdings Limited
Results for announcement to the market

Reporting Period 6 months to 1 February 2019
Previous Reporting
Period
6 months to 1 February 2018

Amount (000s) Percentage change
Revenue from ordinary
activities
$NZ 151,244 +3.1%
Profit (loss) from
ordinary activities after
tax attributable to
security holders
$NZ 16,040 +5.9%
Net profit (loss)
attributable to security
holders
$NZ 16,040 +5.9%

Interim Dividend Amount per security Imputed amount per
security
$NZ 0.20 NZ 0.07778

Record Date 11 April 2019
Dividend Payment Date 18 April 2019

Comments: A brief Please refer to Chairman’s Report (attached)


Net Tangible Assets per
Share
2019 2018
$NZ 1.13 $NZ 1.08

---

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Reprinted May 2006Page 1 of 1
021 52818409 306 2523
Director's resolution
03201929
EMAIL: announce@nzx.com
Stuart Duncan
HALLENSTEIN GLASSON HOLDINGS LIMITED
Ordinary SharesNZHLGE 0001S4
Notice of event affecting securities
$0.013889$0.077778
Date Payable
Enter N/A if not
applicable
18 April, 2019
$0.200
NZ DOLLARS$0.035294
RETAINED EARNINGS
11 April, 201918 April, 2019
$
$11,929,812
In dollars and cents