HLG Full Year Results for the period ending 1 August 2024
New Zealand Stock Exchange Listing Rules
Disclosure Full Year Report
For the year ending 1 August 2024
Contents
Media Release
Results Announcement
Audited Financial Statements & Audit Report
Distribution Notice
---
Results announcement
Results for announcement to the market
Name of issuer Hallenstein Glasson Holdings Limited
Reporting Period 12 months to 1 August 2024
Previous Reporting Period 12 months to 1 August 2023
Currency NZD
Amount (000s) Percentage change
Revenue from continuing operations $435,635 6.3%
Total Revenue $435,635 6.3%
Net profit/(loss) from continuing
operations
$34,486 7.9%
Total net profit/(loss) $34,486 7.9%
Final Dividend
Amount per Quoted Equity Security $0.26500000
Imputed amount per Quoted Equity
Security
$0.07791000
Record Date 6 December 2024
Dividend Payment Date 13 December 2024
Current period Prior comparable period
Net tangible assets per Quoted
Equity Security
$1.71 $1.60
A brief explanation of any of the
figures above necessary to enable
the figures to be understood
For further information refer to the attached:
Group CEO’s announcement
Financial Statements and the Independent
Auditor’s Report
Authority for this announcement
Name of person
authorised to make
this announcement
Cameron Alderton
Contact person for this
announcement
Cameron Alderton
Contact phone number +64 22 394 5785
Contact email address cameron@glassons.com
Date of release through MAP
30 September 2024
Audited financial statements accompany this announcement.
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Distribution Notice
Please note: all cash amounts in this form should be provided to 8 decimal places
Section 1: Issuer information
Name of issuer Hallenstein Glasson Holdings Limited
Financial product name/description Ordinary Shares
NZX ticker code HLG
ISIN (If unknown, check on NZX
website)
NZHLGE 0001S4
Type of distribution
(Please mark with an X in the
relevant box/es)
Full Year X Quarterly
Half Year Special
DRP applies
Record date 6/12/2024
Ex-Date (one business day before the
Record Date)
5/12/2024
Payment date (and allotment date for
DRP)
13/12/2024
Total monies associated with the
distribution
1
$15,807,001 based on the number of units on issue at
the date of the form
Source of distribution (for example,
retained earnings)
Retained Earnings
Currency NZD
Section 2: Distribution amounts per financial product
Gross distribution
2
$0.34291000
Gross taxable amount
3
$0.34291000
Total cash distribution
4
$0.26500000
Excluded amount (applicable to listed
PIEs)
$0.00000000
Supplementary distribution amount $0.03535416
Section 3: Imputation credits and Resident Withholding Tax
5
Is the distribution imputed Partial imputation
1
Continuous issuers should indicate that this is based on the number of units on issue at the date of the form
2
“Gross distribution” is the total cash distribution plus the amount of imputation credits, per financial product, before the deduction of
Resident Withholding Tax (RWT).
3
“Gross taxable amount” is the gross distribution minus any excluded income.
4
“Total cash distribution” is the cash distribution excluding imputation credits, per financial product, before the deduction of RWT.
This should include any excluded amounts, where applicable to listed PIEs.
5
The imputation credits plus the RWT amount is 33% of the gross taxable amount for the purposes of this form. If the distribution is
fully imputed the imputation credits will be 28% of the gross taxable amount with remaining 5% being RWT. This does not constitute
advice as to whether or not RWT needs to be withheld.
If fully or partially imputed, please
state imputation rate as % applied
6
22.72%
Imputation tax credits per financial
product
$0.07791000
Resident Withholding Tax per
financial product
$0.03525030
Section 4: Distribution re-investment plan1 (if applicable)
DRP % discount (if any)
N/A
Start date and end date for
determining market price for DRP
Date strike price to be announced (if
not available at this time)
Specify source of financial products to
be issued under DRP programme
(new issue or to be bought on market)
DRP strike price per financial product
Last date to submit a participation
notice for this distribution in
accordance with DRP participation
terms
Section 5: Authority for this announcement
Name of person
authorised to make
this announcement
Cameron Alderton
Contact person for this
announcement
Cameron Alderton
Contact phone number +64 22 394 5785
Contact email address cameron@glassons.com
Date of release through MAP
30/09/2024
6
Calculated as (imputation credits/gross taxable amount) x 100. Fully imputed dividends will be 28% as a % rate applied.
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HALLENSTEIN GLASSON HOLDINGS LIMITED
1
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 1 AUGUST 2024
Note 2024
2023
$'000
$'000
Sales Revenue 2.1 435,635
409,711
Cost of Sales 2.1
(176,904) (174,863)
Gross Profit 258,731
234,848
Other Operating Income
2.2 353
253
Selling Expenses
(152,844)
(140,462)
Distribution Expenses
(15,552)
(14,008)
Administration Expenses
(36,392)
(32,825)
Total Expenses
(204,788)
(187,295)
Operating Profit 54,296
47,806
Finance Income
2.1 1,957
1,171
Finance Expense
2.1, 2.2
(4,168)
(3,556)
Profit Before Income Tax 52,085
45,421
Income Tax Expense 6.1 (17,599)
(13,444)
Net Profit after Tax attributable to the Shareholders
of the Holding Company 2.1
34,486
31,977
Other Comprehensive Income
- Items that will not be reclassified to profit or loss
(Loss)/Gain (net of tax) on Revaluation of Land and Buildings
6.1
(421)
1,632
Increase in Share Option Reserve
6.1
-
135
- Items that may be subsequently reclassified to profit or loss
Fair Value (Loss)/Gain (net of tax) in Cash Flow Hedge Reserve
6.1
(63)
367
Total Comprehensive Income for the year attributable to the Shareholders
of the Holding Company 34,002
34,111
Earnings Per Share
Basic and diluted Earnings per Share
2.4
57.82
53.61
The Notes to the Financial Statements form an integral part of and are to be read in conjunction w ith these Financial Statements.
2
HALLENSTEIN GLASSON HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 1 AU G U S T 2 0 2 4
Note2024
2023
$'000
$'000
Equity
Contributed Equity
5.129,279
28,140
Asset Revaluation Reserve
26,105
26,526
Cashflow Hedge Reserve
936
999
Share Option Reserve
-
294
Retained Earnings
46,887
40,717
Total Equity103,207
96,676
Represented by
Current Assets
Cash and Cash Equivalents
3.145,915
32,478
Trade and Other Receivables
407
318
Advances to Employees
847
160
Prepayments
5,841
5,431
Inventories
3.227,484
31,005
Derivative Financial Instruments
7.51,317
1,452
Total Current Assets81,811
70,844
Non-Current Assets
Property, Plant and Equipment
4.258,779
56,367
Right of use Assets
4.167,029
65,285
Investment Property
4.33,080
3,208
Intangible Assets
993
717
Deferred Tax
6.27,323
6,005
Total Non-Current Assets137,204
131,582
Total Assets219,015
202,426
Current Liabilities
Trade Payables
9,828
8,104
Employee Benefits
7.18,928
7,294
Other Payables
15,400
13,390
Lease Liabilities
4.126,691
25,147
Derivative Financial Instruments
7.52
47
Taxation Payable
2,466
590
Total Current Liabilities63,315
54,572
Non-Current Liabilities
Lease Liabilities
4.152,493
51,178
Total Liabilities115,808
105,750
Net Assets
103,207
9
6,676
______________________________Director ______________________________Director Date30 September 2024
The Notes to the Financial Statements form an integral part of and are to be read in conjunction with these Financial Statements.
The Financial Statements are signed for and on behalf of the Board and were authorised for issue on 30 September 2024.
3
HALLENSTEIN GLASSON HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 1 AUGUST 2024
Note
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 2022
29,279 (1,474) 24,894 632 228 37,249 90,808
Comprehensive Income
Profit for Year
-
-
-
-
-
31,977
31,977
Revaluation net of Tax 6.1 - - 1,632 - - - 1,632
Cash Flow Hedges net of Tax 6.1 - - - 367 - - 367
Increase in Share Option Reserve
6.1
- - - - 135 - 135
Total Comprehensive Income
- - 1,632 367 135 31,977 34,111
Transactions with Owners
Sale of Treasury Stock
5.1, 5.2
-
303
-
-
-
-
303
Dividends
Transfer of Share Option Reserve to
Retained Earnings
2.3, 5.1
-
-
86
-
-
-
-
-
-
(69)
(28,632)
69
(28,546)
-
(Gain) / Loss on Sale of Treasury Stock
transferred to Retained Earnings
5.1
-
(54)
-
-
-
54
-
Total Transactions with Owners
- 335 - - (69) (28,509) (28,243)
Balance at 1 August 2023
29,279 (1,139) 26,526 999 294 40,717 96,676
Comprehensive Income
Profit for Year
- - - - - 34,486 34,486
Revaluation net of Tax 6.1 - - (421) - - - (421)
Cash Flow Hedges net of Tax 6.1 - - - (63) - - (63)
Total Comprehensive Income
- - (421) (63) - 34,486 34,002
Transactions with Owners
Sale of Treasury Stock 5.1, 5.2 - 141 - - - - 141
Dividends 2.3, 5.1 - 29 - - - (28,632) (28,603)
Increase in Share Option Reserve
- - - - 43 - 43
Share Options Excercised 5.1 - 948 - - - - 948
Transfer of Share Option Reserve to
Retained Earnings
- - - - (337) 337 -
(Gain) / Loss on Sale of Treasury Stock
transferred to Retained Earnings 5.1 - 21 - - - (21) -
Total Transactions with Owners
- 1,139 - - (294) (28,316) (27,471)
Balance at 1 August 2024
29,279 - 26,105 936 - 46,887 103,207
The Notes to the Financial Statements form an integral part of and are to be read in conjunction w ith these Financial Statements.
HALLENSTEIN GLASSON HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 1 AUGUST 2024
4
Note
Cash Flows from Operating Activities
Cash was provided from:
Sales to Customers
Rent Received
2.2
Government Grants
2.2
Interest Income
2.1
Interest on Debtors
2.1
Cash was applied to:
Payments to Suppliers
Payments to Employees
Interest Paid on Leases
2.2
Taxation Paid
Net Cash Flows from Operating Activities
Cash Flows from Investing Activities
Cash was provided from:
Proceeds from Sale of Property, Plant and Equipment and Intangible Assets
Repayment of Employee Advances
Cash was applied to:
Purchase of Property, Plant and Equipment and Intangible Assets
4.2
Net Cash Flows applied to Investing Activities
Cash Flows from Financing Activities
Cash was provided from:
Sale of Treasury Stock and Dividends
5.1, 5.2
Cash was applied to:
Dividend Paid
2.3
Lease Liability Payments
4.1
Net Cash Flows applied to Financing Activities
Net Increase/(Decrease) in Funds held
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year 3.1
The Notes to the Financial Statements form an integral part of and are to be read in conjunction w ith these Financial Statements.
2024
2023
$'000
$'000
435,154
409,444
248
253
-
243
1,951
1,165
6
6
437,359
411,111
252,304
253,254
78,808
74,429
4,168
3,556
16,769
11,849
352,049
343,088
85,310
68,023
168
397
261
82
429
479
15,944
14,811
15,944
14,811
(15,515)
(14,332)
170
389
170
389
28,632
28,632
27,896
28,083
56,528
56,715
(56,358)
(56,326)
13,437
(2,635)
32,478
35,113
45,915
32,478
HALLENSTEIN GLASSON HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS (continued)
FOR THE YEAR ENDED 1 AUGUST 2024
5
RECONCILIATION OF PROFIT AFTER TAXATION Note
TO CASH FLOWS FROM OPERATING ACTIVITIES
Net Profit after Taxation
Add / (deduct) items classified as Investing or Financing activities
Loss/(Gain) on Sale of Plant and Equipment
2.2
Add / (deduct) Non Cash Items
Depreciation and Amortisation
2.2
Gain on Termination of Lease
2.2
Net Fair Value Loss on Investment Property
2.2
Deferred Taxation
6.2
Share Option Expense
Add / (deduct) movements in Working Capital Items
Taxation Payable
Trade and Other Receivables and Prepayments
Trade and Other Payables and Employee Benefits
Inventories
Net Cash Flows from Operating Activities
The Notes to the Financial Statements form an integral part of and are to be read in conjunction w ith these Financial Statements.
2024
2023
$'000
$'000
34,486
31,977
528
(217)
38,516
38,111
(112)
(304)
128
164
(1,045)
435
43
135
1,876
1,162
(499)
(8)
7,868
(5,868)
3,521 2,436
85,310 68,023
HALLENSTEIN GLASSON HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 1 AUGUST 2024
6
1. Basis of preparation
This section presents a summary of information considered relevant and material to assist the reader in understanding the
foundations on which the financial statements as a whole have been compiled. Material accounting policies specific to notes shown
in other sections are disclosed in a shaded box and are included as part of that particular note.
1.1 General information
Reporting entity
Hallenstein Glasson Holdings Limited (“Company” or “Parent”) together with its subsidiaries (the “Group”) is a retailer of men’s and
women’s clothing in New Zealand and Australia.
The Company is a limited liability company incorporated and domiciled in New Zealand. The address of its registered office is Level
3, 235-237 Broadway, Newmarket, Auckland.
Statutory base
Hallenstein Glasson Holdings Limited is a company registered under the Companies Act 1993 and is a FMC reporting entity under
Part 7 of the Financial Markets Conduct Act 2013. The Company is also listed on the New Zealand Stock Exchange (NZX). The
financial statements of the Group have been prepared in accordance with the requirements of Part 7 of the Financial Markets
Conduct Act 2013 and the NZX Main Board Listing Rules.
The financial statements were approved for issue by the Board of Directors on 30 September 2024.
HALLENSTEIN GLASSON HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 1 AUGUST 2024
7
1.2 General accounting policies
Statement of compliance
These financial statements for the year ended 1 August 2024 have been prepared in accordance with Generally Accepted
Accounting Practice in New Zealand (GAAP). They comply with New Zealand equivalents to International Financial
Reporting Standards (NZ IFRS), other New Zealand accounting standards and authoritative notices that are applicable to
entities that apply NZ IFRS. The financial statements comply with International Financial Reporting Standards Accounting
Standards (IFRS Accounting Standards).
Basis of preparation of financial statements
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies
have been consistently applied to all the periods presented, unless otherwise stated.
Certain comparative balances have been restated for consistency with the treatment in the 1 August 2024 consolidated
financial statements.
The reporting currency used in the preparation of these financial statements is New Zealand dollars, rounded where
necessary to the nearest thousand dollars.
Entities reporting
The financial statements are the Consolidated Financial Statements of the Group comprising Hallenstein Glasson
Holdings Limited and its subsidiaries, together they are referred to in these financial statements as ‘the Group’. The
parent and its subsidiaries are designated as for-profit entities for financial reporting purposes.
Principles of consolidation
Subsidiaries
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to,
or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its
power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They
are deconsolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains and losses on transactions between Group companies are
eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies
adopted by the Group.
Investments in subsidiaries
Principal Subsidiaries Interest held by parent
and group
Principal activities
2024
2023
Hallenstein Bros Limited
100%
100% Retail of menswear in New Zealand
Hallenstein Brothers Australia Limited
100%
100% Retail of menswear in Australia
Glassons Limited
100%
100% Retail of womenswear in New Zealand
Glassons Australia Limited
100%
100% Retail of womenswear in Australia
Hallenstein Properties Limited
100%
100% Property ownership in New Zealand
HALLENSTEIN GLASSON HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 1 AUGUST 2024
8
Historical cost convention
These financial statements have been prepared under the historical cost convention, as modified by the revaluation of
investment property, land and buildings and certain financial assets and liabilities (including derivative instruments)
measured at fair value.
Critical accounting estimates, judgements and assumptions
The preparation of financial statements in conformity with NZ IFRS and IFRS Accounting Standards require the use of
certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the
Group’s accounting policies.
Property, plant and equipment/Right of use Assets: The Group has assessed whether the carrying value of its property,
plant and equipment and right of use assets have suffered any impairment since they were acquired. The recoverable
amounts of cash generating units (at a store level) have been determined based on value in use calculations. These
calculations require the use of estimates and projections of future operating performance.
Inventory provision: The Group assessed the inventory provision using management judgement which considers a range
of factors including the review of historical data, the age of inventory and current selling price trends to determine the
appropriateness of the provision.
Revaluation of Land and Buildings: The fair value of the Group’s land and buildings is determined by the Board following
an independent valuation undertaken at least every three years. The basis of the valuation is assessed within a range
indicated by two valuation approaches: discounted cash flow analysis and an income capitalisation approach. The key
assumptions are disclosed in note 4.2.
Revaluation of Investment Property: The fair value of the Group’s investment property is determined by the Board following
an independent valuation undertaken annually. The basis of the valuation is assessed within a range indicated by two
valuation approaches: discounted cash flow analysis and an income capitalisation approach. The key assumptions are
disclosed in note 4.3.
Foreign currency translation
Functional and presentation currency
Items included in the financial statements of each of the Group’s operations are measured using the currency of the primary
economic environment in which it operates (‘the functional currency’). The financial statements are presented in New
Zealand dollars, which is the Group’s presentational currency.
Transactions and balances
The results and financial position of all the Group entities that have a functional currency different from the presentation
currency are translated into the presentation currency as follows:
(a) assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;
and
(b) income and expenses for each statement of comprehensive income are translated at average exchange rates.
All resulting exchange differences are recognised in the statement of comprehensive income.
Revised comparative balances
Changes to record anticipated breakage of contract liabilities
The Group revised its estimates of prior period breakage for unredeemed gift cards, leading to changes in the 2023
consolidated financial statement of position, consolidated statement of changes in equity, and respective consolidated notes
to the financial statements. As a result, other payables decreased by $0.5M, deferred tax reduced by $0.1M and 2023
opening retained earnings increased by $0.4M.
Historical cost convention
These financial statements have been prepared under the historical cost convention, as modified by the revaluation of
investment property, land and buildings and certain financial assets and liabilities (including derivative instruments)
measured at fair value.
Climate related risks
Transactions and balances
As part of its risk management framework, the Group continues to monitor its exposure to risk, including climate related
risks and regulatory related reporting requirements. During the year ended 1 August 2024, the Group completed its first
climate related risk assessment for its Climate Related Disclosure under the Aotearoa New Zealand Climate Standards. As
part of this assessment, we have not identified any material impacts requiring specific disclosure in the financial statements.
The identified climate related risks and opportunities including both physical and transitional impacts have been considered
as part of the below critical accounting estimates, judgements and assumptions. Our Climate Related Disclosure will be
published by the end of November 2024 on our website – www.hallensteinglasson.co.nz.
Critical accounting estimates, judgements and assumptions
The preparation of financial statements in conformity with NZ IFRS and IFRS Accounting Standards require the use of
certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the
Group’s accounting policies.
Property, plant and equipment/Right of use Assets: The Group has assessed whether the carrying value of its property,
plant and equipment and right of use assets have suffered any impairment since they were acquired. The recoverable
amounts of cash generating units (at a store level) have been determined based on value in use calculations. These
calculations require the use of estimates and projections of future operating performance.
Inventory provision: The Group assessed the inventory provision using management judgement which considers a range
of factors including the review of historical data, the age of inventory and current selling price trends to determine the
appropriateness of the provision.
Revaluation of Land and Buildings: The fair value of the Group’s land and buildings is determined by the Board following
an independent valuation undertaken at least every three years. The basis of the valuation is assessed within a range
indicated by two valuation approaches: discounted cash flow analysis and an income capitalisation approach. The key
assumptions are disclosed in note 4.2.
Revaluation of Investment Property: The fair value of the Group’s investment property is determined by the Board following
an independent valuation undertaken annually. The basis of the valuation is assessed within a range indicated by two
valuation approaches: discounted cash flow analysis and an income capitalisation approach. The key assumptions are
disclosed in note 4.3.
Foreign currency translation
Functional and presentation currency
Items included in the financial statements for each of the Group’s operations are measured using the currency of the primary
economic environment in which it operates (‘the functional currency’). The financial statements are presented in New
Zealand dollars, which is the Group’s presentational currency.
Transactions and balances
The results and financial position of all the Group entities that have a functional currency different from the presentation
currency are translated into the presentation currency as follows:
(a) assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;
and
(b) income and expenses for each statement of comprehensive income are translated at average exchange rates.
All resulting exchange differences are recognised in the statement of comprehensive income.
HALLENSTEIN GLASSON HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 1 AUGUST 2024
9
Operating segments are reported in a manner consistent with the internal reporting provided to the Board of Directors. The
Board of Directors is the chief operating decision maker and is responsible for allocating resources and assessing
performance of the operating segments and they delegate that authority through the Group Chief Executive Officer.
2. Performance
2.1 Segment information
The Board of Directors considers the business from both a product and geographic perspective as follows:
- Hallenstein Bros Limited (New Zealand) and Hallenstein Brothers Australia Limited (Australia)
- Glassons Limited (New Zealand)
- Glassons Australia Limited (Australia)
- Hallenstein Properties Limited (New Zealand) (Property)
The reportable segments derive their revenues primarily from the retail sale of clothing. The revenues from external parties reported
to the Board of Directors are measured in a manner consistent with that in the statement of comprehensive income. There are no
material revenues derived from a single external customer.
Revised comparative balances
Changes to record anticipated breakage of contract liabilities
The Group revised its estimates of prior period breakage for unredeemed gift cards, leading to changes in the 2023
consolidated financial statement of position, consolidated statement of changes in equity, and respective notes to the
consolidated financial statements. As a result, other payables decreased by $0.5M, deferred tax reduced by $0.1M and
2023 opening retained earnings increased by $0.4M. The Group considered this revision as immaterial to the consolidated
financial statements as a whole.
HALLENSTEIN GLASSON HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 1 AUGUST 2024
10
Segment results
For the year ended 1 August 2024
INCOME STATEMENT
Segment Revenue
Intercompany Segment Revenue
Glassons
New
Zealand
$000's
120,303
(10,241)
Glassons
Australia
$000's
219,440
(1,317)
Hallensteins
$000's
108,359
(909)
Property
$000's
-
-
Parent
$000's
1,002
(1,002)
Total Group
$000's
449,104
(13,469)
Sales Revenue from External Customers
110,062
218,123
107,450
-
-
435,635
Cost of Sales
(49,191)
(83,862)
(43,851)
-
-
(176,904)
Finance Income
348
721
718
-
170
1,957
Finance Expense
(1,415)
(1,625)
(1,105)
-
(23)
(4,168)
Depreciation and Amortisation
(11,143)
(16,593)
(10,166)
(524)
(90)
(38,516)
Profit/(Loss) before Income Tax
15,039
29,466
7,479
258
(157)
52,085
Income Tax (Expense)/Benefit
(4,255)
(9,969)
(2,141)
(1,278)
44
(17,599)
Net Profit/(Loss) after Income Tax
10,784
19,497
5,338
(1,020)
(113)
34,486
STATEMENT OF FINANCIAL POSITION
Current Assets
24,170
26,072
22,052
6,010
3,507
81,811
Non-Current Assets
40,704
53,510
22,253
20,737
-
137,204
Current Liabilities
16,600
30,969
15,360
396
(10)
63,315
Non-Current Liabilities
17,535
25,785
9,173
-
-
52,493
Purchase of Property, Plant and Equipment and
Intangible Assets
3,774
8,029
4,131
10
-
15,944
For the year ended 1 August 2023
Glassons
New
Zealand
Glassons
Australia
Hallensteins
Property
Parent
Total Group
$000's
$000's
$000's
$000's
$000's
$000's
INCOME STATEMENT
Segment Revenue
122,336
192,070
106,309
-
753
421,468
Intercompany Segment Revenue
(9,888)
(841)
(275)
-
(753)
(11,757)
Sales Revenue from External Customers
112,448
191,229
106,034
-
-
409,711
Cost of Sales
(51,924)
(75,567)
(47,372)
-
-
(174,863)
Finance Income
149
487
449
-
86
1,171
Finance Expense
(1,268)
(1,226)
(1,045)
-
(17)
(3,556)
Depreciation and Amortisation
(11,518)
(15,826)
(10,288)
(422)
(57)
(38,111)
Profit/(Loss) before Income Tax
15,149
24,602
5,425
320
(75)
45,421
Income Tax Expense
(4,256)
(7,496)
(1,540)
(136)
(16)
(13,444)
Net Profit/(Loss) after Income Tax
10,893
17,106
3,885
184
(91)
31,977
STATEMENT OF FINANCIAL POSITION
Current Assets
22,836
18,356
21,601
5,503
2,548
70,844
Non-Current Assets
43,412
39,018
26,663
22,489
-
131,582
Current Liabilities
16,715
21,003
16,440
379
35
54,572
Non-Current Liabilities
20,370
17,694
13,114
-
-
51,178
Purchase of Property, Plant and Equipment and
Intangible Assets
2,965
8,755
3,083
8
-
14,811
HALLENSTEIN GLASSON HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 1 AUGUST 2024
11
Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services, excluding
Goods and Services Tax, net of rebates and discounts and after eliminating sales within the Group.
Revenue is recognised as follows:
Sales of goods - retail
Sales of goods are recognised when a Group entity has delivered a product to the customer. For in-store sales, control
passes to the customer at the point of sale. For online sales, the order and the delivery to the customer are considered to
comprise a single performance obligation, therefore control passes to the customer when the goods are delivered. Retail
sales are usually in cash, credit card, debit card or by various pay later services. The recorded revenue is the gross amount
of sale (excluding GST), including credit card fees and service fees payable for the transaction. Such fees are included in
selling expenses.
The Group offers customers the option of purchasing gift cards. This is considered deferred revenue until such time where
the customer redeems the gift card on future purchases. A contract liability for the purchase of a gift card is recognised at the
time of the sale. Revenue is recognised when the gift card is redeemed or when they expire. As at 1 August 2024, the gift
card liability balance recognised under “Other payables” was $2.22M (2023: $2.61M, 2022: $2.98M).
Interest income
Interest income is recognised using the effective interest method.
Rental income
Rental income from operating leases (net of any incentives) is recognised on a straight line basis over the lease term.
2.2 Income and expenses
HALLENSTEIN GLASSON HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 1 AUGUST 2024
12
Income and expenses
Profit before income tax includes the following specific income and expenses:
Group
Other Operating Income
Audit of Financial Statements
1
Amount paid in respect of tax compliance and tax advisory services provided in Australia.
2
Wages, salaries and other short term benefits includes wage subsidy benefit from the New Zealand government of $Nil (2023: $0.24M).
2024
2023
$000
253
-
6,156
230
21
647
74,229
10,423
27,273
415
$000
Rental Income
248
Insurance Proceeds
105
Expenses
Occupancy Costs
9,355
PwC New Zealand
Other Services
249
Performed by PwC Australia
1
18
Directors' Fees
698
Wages, Salaries and other Short Term Benefits
2
80,753
Depreciation of Property, Plant & Equipment
11,415
Depreciation of Right of Use Assets
26,604
Amortisation of Software 497
Total Depreciation and Amortisation
38,516
38,111
164
3,556
(304)
(217)
Net Fair Value Loss on Investment Property
128
Interest on Leases
4,168
Gain on Termination of Lease
(112)
Loss/(Gain) on Disposal of Property, Plant and Equipment
528
HALLENSTEIN GLASSON HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 1 AUGUST 2024
13
Provision is made for the amount of any dividend declared on or before the balance date but not distributed at balance date.
Basic and diluted earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the
weighted average number of ordinary shares outstanding during the period, adjusted for bonus elements in ordinary shares
issued during the period.
2.3 Dividends
2024
cents per
Share
2023
cents per
Share
2024
$000's
2023
$000's
Final dividend for the year ended 1 August 2023 24.00
14,316
Interim dividend for the year ended 1 August 2024
Final dividend for the year ended 1 August 2022
24.00
24.00
14,316
14,316
Interim dividend for the year ended 1 August 2023
24.00
14,316
Total
48.00
48.00
28,632
28,632
Dividends paid were partially imputed. Supplementary dividends of $177,160 (2023: $64,315) were paid to shareholders not resident
in New Zealand for tax purposes for which the Group received a foreign investor tax credit.
2.4 Earnings per share
Basic
Basic earnings per share is calculated by dividing the profit after tax of the Group by the weighted average number of ordinary shares
outstanding during the year.
Diluted
Diluted earnings per share is calculated by adjusting profit after tax and the weighted average number of ordinary shares outstanding
to assume conversion of all dilutive potential ordinary shares. There were no options convertible into shares as at 1 August 2024
(2023: Nil).
Earnings per share
2024
$000's
2023
$000's
Profit after tax
34,486
31,977
Weighted average number of ordinary shares outstanding
59,649
59,649
Basic and diluted earnings per share (cents per share)
57.82
53.61
HALLENSTEIN GLASSON HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 1 AUGUST 2024
14
Cash and cash equivalents include cash at bank, cash on hand, EFTPOS (electronic funds transfer point of sale)
transactions which have not been cleared by the bank at balance date, deposits held at call with financial institutions,
other short-term highly liquid investments with original maturities of three months or less that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts.
Consolidated Statement of Cash flows
The following are the definitions of the terms used in the consolidated statement of cash flows:
(I.) Cash comprises cash and cash equivalents.
(II.) Investing activities are those activities relating to the acquisition, holding and disposal of property, plant and equipment,
investments and employee advances.
(III.) Financing activities are those activities which result in changes in the size and composition of the capital structure of
the Group. This includes lease payments, equity and debt not falling within the definition of cash. Dividends paid are
included in financing activities.
(IV.) Operating activities include all transactions and other events that are not investing or financing activities.
Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted average method
and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. Net
realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses,
excluding borrowing costs. The Group assesses the likely net residual value of inventory. Stock provisions are recognised for
inventory which is older than two years and for inventory which is expected to sell for less than cost. Management will also
use their judgement to assess whether any further provisions are required based on style performance, current trends and
specific product information from buyers.
3. Working Capital
3.1 Cash and cash equivalents
Cash and cash equivalents
2024
$000's
2023
$000's
Cash at Bank
44,470
28,667
Short Term Bank Deposits
1,364
3,739
Cash on Hand 81 72
Total Cash and Cash Equivalents
45,915
32,478
The carrying amount of cash and cash equivalents equals the fair value.
3.2 Inventories
2024
$000's
2023
$000's
Finished goods
27,659
31,285
Inventory adjustments
(175)
(280)
Net inventories 27,484 31,005
Inventory adjustments are provided at year end for stock obsolescence within cost of sales in the Consolidated Statement of
Comprehensive Income.
The cost of inventories recognised as an expense and included in cost of sales amounted to $176,649,177 (2023: $174,548,112).
HALLENSTEIN GLASSON HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 1 AUGUST 2024
15
4. Long term Assets
4.1 Leases
Right-of-use assets and lease liabilities arising from a lease are initially measured on a present value basis. Lease liabilities
include the net present value of the remaining lease payments.
Right-of-use assets are initially recognised on commencement of lease at cost, comprising the initial amount of the lease
liabilities less any lease incentives received. Right-of-use assets are subsequently depreciated using the straight-line method
from the commencement date to the end of the lease term.
The Group leases retail stores under non-cancellable operating leases expiring within one to six years. There is a small
portion of lease contracts which contain renewal rights. In considering the lease term for these contracts, the Group has
determined that rights of renewals are not reasonably certain to be exercised due to the nature and location of the stores and
the changing retail environment. It is the Group’s strategy to renegotiate the terms of all leases at their expiry instead of
exercising renewal rights. This agile strategy is enabled by having stores relatively small in size and not highly customised,
and therefore relatively straight forward to move locations. In addition, with the current retail market uncertainty the Group
needs to maintain a degree of flexibility.
Both right-of-use assets and lease liabilities are discounted applying the interest rate implicit in the lease. If that rate cannot
be determined, the lessee’s incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow
the funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions.
Short term leases where the Group is the lessee
Leases in which a material portion of the risks and rewards of ownership are retained by the lessor are classified as operating
leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the profit or
loss in the Consolidated Statement of Comprehensive Income on a straight line basis over the period of the lease.
The Group is the lessor
Assets leased to third parties under operating leases are included in Investment Property in the Consolidated Statement of
Financial Position. Rental income (net of any incentives given to lessees) is recognised on a straight line basis over the lease
term. Lease receivables are disclosed under Note 4.3.
HALLENSTEIN GLASSON HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 1 AUGUST 2024
16
The following tables show the movements and analysis in relation to the right-of-use assets and lease liabilities.
Right of Use Assets
2024
2023
$000
$000
Opening net book value
65,285
67,146
Depreciation
(26,604)
(27,273)
Modifications and additions
30,253
27,037
Lease Terminations (2,104) (1,066)
FX impact 199 (559)
Carrying amount 67,029
65,285
Lease liabilities
2024 2023
$000
$000
Opening lease liabilities 76,325 77,410
Lease modifications and additions
32,724
29,344
Interest for the period 4,168 3,556
Lease payments made (32,064) (31,639)
COVID-19 rent abatements received - (234)
Lease Terminations
(2,216)
(1,370)
FX impact 247 (742)
Closing Lease liabilities 79,184
76,325
HALLENSTEIN GLASSON HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 1 AUGUST 2024
17
Lease liabilities maturity analysis for the year ended 1 August 2024
Minimum
lease
payments Interest
Present
value
$000's $000's $000's
Due within one year 30,354 (3,663) 26,691
One to two years 24,640 (2,413) 22,227
Two to five years
30,225 (2,143) 28,082
Later than five years 2,267 (83) 2,184
Total 87,486 (8,302) 79,184
Current
Non-current
26,691
52,493
Total
79,184
Lease liabilities maturity analysis for the year ended 1 August 2023
Minimum
lease
Present
payments
$000's
Interest
$000's
value
$000's
Due within one year 28,130 (2,983) 25,147
One to two years 22,851 (1,992) 20,859
Two to five years 31,628 (1,924) 29,704
Later than five years 628 (13) 615
Total
83,237 (6,912) 76,325
Current
25,147
Non-current
51,178
Total
76,325
Lease related expenses included in the consolidated statement of comprehensive income:
2024 2023
$000
$000
Depreciation 26,604 27,273
Rent on short-term leases 9,355 6,390
COVID-19 rent abatements received
-
(234)
Gain on lease termination
(112)
(304)
Interest on leases 4,168 3,556
Total
40,015 36,681
Lease payments included in the consolidated statement of cash flows:
2024 2023
$000
$000
Interest paid on leases (operating activities) 4,168 3,556
Payments for lease liabilities principal (financing activities) 27,896 28,083
Total cash outflows from leases
32,064
31,639
Lease commitments:
The Group currently has no non-cancellable short-term operating lease agreements as at 1 August 2024 (2023: $Nil).
HALLENSTEIN GLASSON HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 1 AUGUST 2024
18
4.2 Property, plant and equipment
Recognition and measurement
Land and buildings were valued on 1 August 2024 by Telfer Young (Hawkes Bay) Limited, Fordbaker Valuation Limited and Colliers
International (collectively “the valuers”), who are independent registered valuers and associates of The New Zealand Institute of
Valuers. The valuers have recent experience in the location and category of the item being valued. The fair values of the assets
represent the estimated price for which a property could be sold on the date of valuation in an orderly transaction between market
participants.
The adopted valuation have been assessed within a range indicated by two valuation approaches: Income capitalisation approach
and discounted cash flow analysis.
The following table summarises the valuation approach and key assumptions used by the valuers to arrive at fair value.
Valuation approach Description of the valuation approach
Income Capitalisation
Approach
A valuation methodology which determines fair value by capitalising a property’s
sustainable net income at an appropriate, market derived capitalisation rate (yield).
Unobservable inputs within the income capitalisation approach include:
a) Net Market Rent which is the annual amount for which a tenancy within a
property is expected to achieve under a new arm’s length leasing transaction
after deducting a fair share of property operating expenses.
b) Capitalisation Rate (yield) which is the rate of return, determined through analysis
of comparable, market related sales transactions which is applied to a property’s
sustainable net income to derive value.
Discounted Cash Flow analysis With the discounted cash flow analysis, a cash flow budget is established for the property
over a ten-year time horizon. Within the cash flow an allowance is made for rental growth
as well as deducting costs associated with property ownership. A terminal value is also
estimated and the cash flows are discounted at a market rate to arrive at a net present
value.
Unobservable inputs within the discounted cash flow analysis include:
a) The discount rate which is the rate determined through analysis of comparable
market related sales transactions which is applied to a property’s future net cash
flows to convert those cash flows into a present value.
b) The terminal capitalisation rate which is the rate which is applied to a property’s
sustainable net income at the end of an assumed holding period to derive an
estimated market value.
c) Rental growth rate which is the annual growth rate applied to market rent over an
assumed holding period.
d) Expenses growth which is the annual amount applied to property operating
expenses over an assumed holding period.
Land and building measurements are categorised as Level 3 in the fair value hierarchy. During the year there were no transfers
between levels of the fair value hierarchy.
HALLENSTEIN GLASSON HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 1 AUGUST 2024
19
Both the income capitalisation approach and discounted cash flow analysis contain unobservable inputs in determining fair value.
These are summarised in the table below:
Range of significant unobservable inputs
Sensitivity
The higher the market rent
and growth rate, the higher
the fair value
The higher the capitalisation
rates and discount rate, the
lower the fair value.
The higher the expenses, the
lower the fair value.
The higher the market rent
and growth rate, the higher
the fair value
The higher the capitalisation
rates and discount rate, the
lower the fair value.
The higher the expenses, the
lower the fair value.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured
reliably.
Increases in the carrying amount arising on revaluation of land and buildings are credited to other comprehensive income and
shown as an asset revaluation reserve in shareholders’ equity. Decreases that offset previous increases of the same asset are
charged in other comprehensive income and debited against the asset revaluation reserve directly in shareholders’ equity; all other
decreases are charged to the profit and loss in the consolidated statement of comprehensive income.
All other property, plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost
includes expenditure that is directly attributable to the acquisition of the items. This cost includes labour attributable to bringing the
assets to the location and working condition for its intended use.
Depreciation
Land is not depreciated. Depreciation on other assets is calculated using the straight line method to allocate their cost, net of
their residual values, over their estimated useful lives, as follows:
- Buildings 67 years
- Plant & equipment 2 - 5 years
- Furniture & fittings 5 - 10 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate at each balance date.
Class of property
Inputs used to measure
fair value
2024
2023
Land and Buildings –
Retail and Investment
Property
Net Market Rent
$355 per m2
$359 per m2
Rental growth rate 2.00% - 2.50% 1.50% - 2.50%
Capitalisation rate (yield) 6.76% 6.56%
Discount Rate 7.89% 7.80%
Terminal Capitalisation Rate 7.50% 7.25%
Expenses growth
2.0% - 3.0%
1.8% - 4.4%
Land and Buildings -
Warehouse
2024
2023
Net Market Rent $127 - $214 $128 - $210
Rental growth rate 1.80% - 2.80% 1.70% - 3.10%
Capitalisation rate (yield) 5.49% - 6.70% 5.25% - 6.75%
Discount Rate 7.50% - 8.00% 7.38% - 7.75%
Terminal Capitalisation Rate 5.75% - 7.00% 5.50% - 6.75%
Expenses growth 0.00% - 2.53% 0.00% - 5.00%
HALLENSTEIN GLASSON HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 1 AUGUST 2024
20
Impairment
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its
estimated recoverable amount. Assets that are subject to depreciation are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable, for example a planned store closure, withdrawal from a
business segment, or assessment of loss making stores. Assets are grouped at the lowest levels for which there are separately
identifiable cash flows; a store’s assets is the relevant cash generating unit. If, in a subsequent period, the amount of the impairment
loss decreases and it can be related objectively to an event occurring after the impairment was recognised, the reversal of the
previously recognised impairment loss is recognised in the consolidated statement of comprehensive income.
The value in use calculation evaluates recoverability based on the stores’ forecasted discounted cash flows, which incorporate
estimated sales, margin & expense growth based upon current plans for the store. Key assumptions in the determination of
recoverable amount are:
• the estimate of future cash flows of the store incorporating reasonable sales growth and margin improvement; and
• the discount rate incorporating the rates of return based on the risk and uncertainty inherent in the forecast cash flows.
The Group has performed an assessment to determine whether there is any sensitivity to changes in key assumptions.
As a result of the sensitivity analysis and impairment testing performed, it was determined that no material risks of impairment
existed as at 1 August 2024 (2023: $Nil).
Disposal
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These are included in the
Consolidated Statement of Comprehensive Income.
HALLENSTEIN GLASSON HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 1 AUGUST 2024
21
Year ended 1 August 2024
Land at fair Buildings at Fixtures & Plant &
$000's value fair value Fittings Equipment TOTAL
Opening NBV 11,025 20,138 19,789 5,415 56,367
Additions - - 10,562 4,593 15,155
Disposals - - (308) (354) (662)
Depreciation - (626) (7,690) (3,099) (11,415)
Revaluations 210 (876) - - (666)
Closing NBV 11,235 18,636 22,353 6,555 58,779
Cost/Valuation
11,235
18,636
76,709
29,630
136,210
Accumulated depreciation - - (54,356) (23,075) (77,431)
Closing NBV 11,235 18,636 22,353 6,555 58,779
Year ended 1 August 2023
$000's
Land at fair
value
Buildings at
fair value
Fixtures &
Fittings
Plant &
Equipment
TOTAL
Opening NBV
11,045 18,363 16,292 4,715 50,415
Additions
- - 10,779 3,502 14,281
Disposals
- - (142) (38) (180)
Depreciation - (519) (7,140) (2,764) (10,423)
Revaluations (20) 2,294 - - 2,274
Closing NBV 11,025 20,138 19,789 5,415 56,367
Cost/Valuation
11,025
20,138
70,006
26,482
127,651
Accumulated depreciation
- - (50,217) (21,067) (71,284)
Closing NBV
11,025 20,138 19,789 5,415 56,367
If land and buildings were stated on a historical cost basis, the amounts would be as follows:
Land
Buildings
Cost
Accumulated depreciation
Net book amount
2024
2023
$000's
$000's
4,270
4,270
12,792
12,792
17,062
17,062
(2,993)
(2,737)
14,069
14,325
HALLENSTEIN GLASSON HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 1 AUGUST 2024
22
Recognition and measurement
Investment property consists of a portion of land and buildings for the purpose of retail. Land and buildings were valued on 1
August 2024 by Telfer Young (Hawkes Bay) Limited (“the valuer”) who are independent registered valuers and associates of The
New Zealand Institute of Valuers. The valuer has recent experience in the location and category of the item being valued. The fair
values of the assets represent the estimated price for which a property could be sold on the date of valuation in an orderly
transaction between market participants.
The adopted valuation has been assessed within a range indicated by two valuation approaches: Income capitalisation approach
and discounted cash flow analysis. These valuation approaches and the key assumptions used by the valuer in order to arrive at
fair value has been summarised in note 4.2.
The loss of $128,000 on the fair value revaluation of Investment Property was recognised as an operating expense in the
Consolidated Statement of Comprehensive Income (2023: $164,000). Subsequent revaluation surpluses or losses will be
recognised through the Consolidated Statement of Comprehensive Income.
Land and building measurements are categorised as Level 3 in the fair value hierarchy. During the year there were no transfers
between levels of the fair value hierarchy.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured
reliably.
4.3 Investment Property
Investment Property
2024
$000's
2023
$000's
Opening balance
3,208
3,372
Net loss from fair value adjustment (128) (164)
Closing balance 3,080 3,208
Lease receivables:
The Group owns rental property that it leases under non-cancellable operating lease agreements to external parties. Leases reflect
normal commercial arrangements with varying terms and renewal rights.
The future minimum rental payments receivable under these leases is as follows:
Lease receivables
2024
$000's
2023
$000's
Due within one year
83
207
One to two years - 74
Total lease receivables 83 281
HALLENSTEIN GLASSON HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 1 AUGUST 2024
23
Ordinary shares are classified as capital, net of treasury stock.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax,
from the proceeds.
Treasury stock
Shares purchased on market under the executive share scheme are treated as treasury stock on acquisition at cost. On
vesting to the employee, treasury stock shares are credited to equity and an employee loan is recorded initially at fair value
and subsequently at amortised cost.
Reserves
The asset revaluation reserve records revaluations of land and buildings classified as property, plant and equipment, net of
tax. The cash flow hedge reserve records the fair value of derivative financial instruments, net of tax that meet the hedge
accounting criteria. The Share Option reserve is used to record the accumulated value of unvested share rights arising from
the executive share scheme which have been recognised in the consolidated statement of changes in equity.
5. Equity
5.1 Share capital
Contributed Equity
2024
Shares
2023
Shares
2024
$000's
2023
$000's
Balance at beginning of year
59,452,061
59,402,061
28,140
27,805
Sale of Treasury Stock
25,000
50,000
141
303
Dividends
-
-
29
86
Share Options Exercised
Loss/(Gain) on sale of Treasury Stock transferred to Retained
172,000
-
948
-
Earnings
-
-
21
(54)
Balance at end of year
59,649,061
59,452,061
29,279
28,140
Representing:
Share Capital
59,649,061
59,649,061
29,279
29,279
Treasury Stock (net of Dividends) - (197,000) - (1,139)
Total
59,649,061
59,452,061
29,279
28,140
All shares are fully paid and rank equally.
HALLENSTEIN GLASSON HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 1 AUGUST 2024
24
Equity settled share-based compensation benefits are provided to certain employees in accordance with the Group’s executive
share scheme. The fair value of share rights granted under the scheme is recognised as an employee benefit expense with a
corresponding increase in equity. The fair value is measured at grant date and recognised over the period during which the
employees become unconditionally entitled to the share rights.
The fair value at grant date of the share rights are determined using a Black Scholes Pricing model that takes into account the
exercise price, the term of the share right, the vesting and performance criteria, the non-tradable nature of the share right, the
share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free
interest rate for the term of the share right.
At each balance date, the Group revises its estimate of the number of share rights that are expected to become exercisable.
The employee benefit expense recognised each period takes into account the most recent estimate.
Upon the vesting of share rights, the balance of the share option reserve relating to the share rights is transferred to retained
earnings.
5.2 Executive Share Scheme
The Company operates an employee share scheme for certain senior executives to purchase ordinary shares in the Company.
The Company provides the employees with limited recourse loans on an interest free basis to assist employees’ participation.
The loans are applied to purchase shares on market and the shares are treated as treasury stock.
The loan amount is the total market value of the shares plus any commission applicable on the date of purchase.
Any dividends payable on the shares are applied towards the repayment of the advance.
Shares purchased under the scheme are held by two directors as custodians and vest three years from the date of purchase. In
the event the employee leaves the company during the vesting period, the loan is repaid by selling the shares on market. Any
gain or loss arising from the sale of shares is included in equity. Refer to note 5.1 for further detail on treasury stock.
In accordance with NZ IFRS 2 Shared-based payment, this scheme is an equity-settled scheme.
There were no shares issued during the 2024 financial year (2023: Nil).
Executive share scheme
Year ended 1
August 2024
Year ended 1
August 2023
Number of
Average
exercise price
per share
Number of
Average
exercise price
per share
shares option
shares option
Balance at beginning of financial year 197,000 $6.74 247,000 $6.62
Forfeited during the year
(25,000) $5.62
(50,000) $6.06
Exercised during the year (172,000) $6.65 - $0.00
Balance at end of financial year - - 197,000 $6.74
HALLENSTEIN GLASSON HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 1 AUGUST 2024
25
The income tax expense or revenue for the period is the tax payable or receivable on the current period’s taxable income
based on the notional income tax rate for each jurisdiction, adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial
statements and unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets
are recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for each
jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to
measure the deferred tax asset or liability. An exception is made for certain temporary differences arising from the initial
recognition of an asset or a liability. No deferred tax asset or liability is recognised in relation to these temporary differences
if they arose in a transaction, other than a business combination, that at the time of the transaction did not affect either
accounting profit or taxable profit or loss.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future
taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases
of investments in operations where the company is able to control the timing of the reversal of the temporary differences and
it is probable that the differences will not reverse in the foreseeable future.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.
The Consolidated Statement of Comprehensive Income and the Consolidated Statement of Cash Flows have been prepared
so that all components are stated exclusive of GST. All items in the Consolidated Statement of Financial Position are stated net
of GST, with the exception of receivables and payables, which include GST invoiced.
6. Taxation
6.1 Income tax expense
Goods and Services Tax (GST)
Income tax expense
Income tax expense
2024
$000's
2023
$000's
The tax expense comprises:
Current tax expense
17,567
12,954
Prior period adjustment
1,077
55
Deferred tax expense (note 6.2)
- Future tax expense current year
459
435
- Prior period adjustment (1,504) -
Total income tax expense
17,599
13,444
Reconciliation of income tax expense to tax rate applicable to profits
Profit before income tax expense
52,085
45,421
Tax at 28% (2023: 28%)
14,584
12,718
Tax effect of:
- Income not subject to tax
35
-
- Expenses not deductible for tax
245
144
- Adjustment due to different rate in different jurisdictions
605
527
- Prior period adjustment
(427)
55
- Removal of tax base on buildings
2,557
-
Total income tax expense
17,599
13,444
The effective tax rate for the year was 33.8% (2023: 29.6%). The Group has no tax losses (2023: Nil) and no unrecognised
temporary differences (2023: Nil).
HALLENSTEIN GLASSON HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 1 AUGUST 2024
26
The Taxation (Annual Rates for 2023-24, Multinational Tax and Remedial Matters) Act, which received Royal Assent on 28 March
2024, removes tax depreciation deductions for commercial buildings with effect from the beginning of the 2025 income tax year.
This legislative change reduces the tax base of the commercial buildings in New Zealand. This change decreased the deferred tax
asset recognised in respect of property, plant and equipment, and investment property by $2.6 million, partially off-set by a $1.5
million related prior period adjustment. A net non-cash deferred tax expense of $1.1 million has been recognised in the current year
tax expense.
The tax (charge)/credit relating to components of other comprehensive income are as follows:
(Loss)/Gains (net of tax) on revaluation of land and buildings
Fair Value (Loss)/Gain (net of tax) in Cash Flow Hedge Reserve
Increase in Share Option Reserve
6.2 Deferred tax
Amounts recognised in profit or loss
Depreciation
Provisions and accruals
Right of use assets
Lease liabilities
Amounts recognised directly in equity
Asset revaluation reserve
Cash flow hedges
Total amount recognised
Movements
Balance at beginning of year
Credited/(Charged) to the Income Statement
Prior perod adjustment
Charged to equity
Balance at the end of the year
2024
2023
$000's
$000's
2,583
3,937
3,042
1,567
(21,145)
(20,459)
22,979
22,010
7,459
7,055
245
(642)
(381)
(408)
7,323
6,005
6,005
7,364
(459)
(435)
1,504
273
(924)
7,323
6,005
2024
2023
Before
$000's
Tax
After
Before
$000's
Tax
After
Tax charge Tax
Tax charge Tax
(666) 245 (421)
2,274 (642) 1,632
(91) 28 (63)
506 (139) 367
- - -
135 - 135
HALLENSTEIN GLASSON HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 1 AUGUST 2024
27
2024
$000's
8,928
2024
$000's
3,691
Wages and salaries, annual leave and sick leave
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected to be
settled within 12 months of the reporting date are recognised in other payables in respect of employees' services up to the
reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for
non-accumulating sick leave are recognised when the leave is taken and measured at the rates paid or payable.
6.3 Imputation credits
2023
$000's
Imputation credits available for subsequent reporting periods
4,172
The above amounts represent the balance of the imputation account as at the end of the reporting period, adjusted for:
Imputation credits that will arise from the payment of the provision for income tax;
Imputation debits that will arise from the payment of dividends recognised as liabilities at the reporting date; and
Imputation credits that will arise from the receipt of dividends recognised as receivables at the reporting date.
7. Other
7.1 Employee benefits
2023
$000's
Holiday pay accrual and other benefits 7,294
7.2 Contingencies
Contingent liabilities under contracts, guarantees and other agreements arising in the ordinary course of business on which no loss
is anticipated are as follows:
2024
$000's
2023
$000's
Bank guarantee provided to the New Zealand Stock Exchange Limited
75
75
Letters of Credit
Bank letters of credit issued to secure future purchasing requirements are matched to a contingent asset of the same value
representing inventories purchased.
7.3 Capital expenditure commitments
2024
$000's
2023
$000's
Commitments in relation to store fitouts
986 1,043
HALLENSTEIN GLASSON HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 1 AUGUST 2024
28
7.4 Related party transactions
During the year, the Company advanced and repaid loans to its subsidiaries by way of internal current accounts. In presenting the
financial statements of the Group, the effect of transactions and balances between fellow subsidiaries and those with the Parent
have been eliminated.
The Group undertook transactions with the related interests of the majority shareholder as detailed below:
2024
2023
T C Glasson $000
$000
Rent payments on retail premises
1,373
2,166
Balance as at year end - lease liabilities
4,143
3,556
The following Directors received Directors’ fees and dividends in relation to shares held personally as follows:
Directors' fees
Dividends
2024
2023
2024
2023
$000
$000
$000
$000
Ms J Appleyard
86
62
-
-
Mr W J Bell
141
135
-
-
Ms K Bycroft
99
95
-
-
Mr M Ford
106
100
4
4
Mr J C Glasson
-
-
41
20
Mr T C Glasson
86
85
5,338
5,338
Mr G Popplewell
94
85
91
91
Ms S Vincent
86
85
22
22
698
647
5,496
5,475
During the financial year, consulting fees of $10,000 (2023: $9,000) were paid to Karen Bycroft. There was no balance outstanding
as at 1 August 2024 (2023: $Nil).
Total remuneration of $702K was paid by the Company to close family members of the Board of Directors for individuals that were
either employed or engaged as consultants by the Company in the year ended 1 August 2024 (2023: $440K).
Key management compensation was as follows:
2024
2023
$000
$000
Short term employee benefits
3,864
2,912
Share Scheme Benefit
43
135
The Company operates an employee share scheme for certain senior executives and is outlined in Note 5.2.
HALLENSTEIN GLASSON HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 1 AUGUST 2024
29
7.5 Financial risk management
Fair value estimation
Fair value estimates are classified in a hierarchy based on the inputs to valuation techniques used to measure fair value.
The different levels have been defined as follows:
- Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).
- Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that
is, as prices) or indirectly (that is, derived from prices) (Level 2).
- Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3).
The Group’s policy is to recognise transfers into and out of fair value hierarchy levels as of the date of the event or change in
circumstances that caused the transfer.
The Group has financial instruments that are classified as Level 2 within the fair value hierarchy. The fair value of financial
instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using
valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely
as little as possible on entity specific estimates. If all material inputs required to fair value an instrument are observable, the
instrument is included within Level 2. Under Level 2 the Group holds forward foreign exchange contracts. The fair value of
these forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date, with the
resulting value discounted back to present value. Refer to note 7.5.4.
The Group's land and buildings within property, plant and equipment and investment property are classified as Level 3 in the
fair value hierarchy as one or more of the material inputs into the valuation are not based on observable market data. Refer
to notes 4.2 and 4.3 for more information.
Derivatives
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-
measured to their fair value. The method of recognising the resulting gain or loss depends on whether the derivative is
designated as a hedging instrument, and if so, the nature of the item being hedged. The company designates certain
derivatives as either; (1) hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedge);
or (2) hedges of highly probable forecast transactions (cash flow hedges).
The Group documents at the inception of the transaction the relationship between hedging instruments and hedged items,
as well as its risk management objective and strategy for undertaking various hedge transactions. The Group also
documents its assessment, both at hedge inception and on an ongoing basis, whether the derivatives that are used in
hedging transactions have been and will continue to be highly effective in offsetting changes in fair values or cash flows of
hedged items.
Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is
recognised in equity in the cash flow hedge reserve. The gain or loss relating to the ineffective portion is recognised
immediately in the profit or loss in the Consolidated Statement of Comprehensive Income.
Amounts accumulated in equity are recycled in the Consolidated Statement of Comprehensive Income in the periods when
the hedged item will affect profit or loss (for instance when the forecast sale that is hedged takes place). However, when
the forecast transaction that is hedged results in the recognition of a non-financial asset (for example, inventory) or a non-
financial liability, the gains and losses previously deferred in equity are transferred from equity and included in the
measurement of the initial cost or carrying amount of the asset or liability.
When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge
accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast
transaction is ultimately recognised in the Consolidated Statement of Comprehensive Income. When a forecast transaction
is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the profit
or loss in the Consolidated Statement of Comprehensive Income.
Derivatives that do not qualify for hedge accounting
Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of these derivative instruments
are recognised immediately in the profit or loss in the Consolidated Statement of Comprehensive Income.
HALLENSTEIN GLASSON HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 1 AUGUST 2024
30
7.5.1 Financial risk factors
The Group’s activities expose it to various financial risks including, liquidity risk, credit risk, and market risk (including currency risk
and cash flow interest rate risk). The Group’s risk management strategy is to minimise adverse effects on the Consolidated
Statement of Comprehensive Income. Derivative financial instruments are used to hedge currency risk.
7.5.2 Liquidity Risk
Liquidity risk is the risk that the Group will be unable to meet its financial obligations as they fall due. The Group’s approach to
managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under
both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.
The Group manages liquidity risk by maintaining adequate reserves, and by regularly monitoring cash flow.
At balance date, the Group had $45.915 million (2023: $32.478 million) in cash reserves and accordingly, management consider
liquidity risk to be relatively low.
The table below analyses the Group’s financial liabilities and gross-settled derivatives into relevant maturity groupings based on the
remaining period from the Consolidated Statement of Financial Position to the contractual maturity date. The cash flow hedge
“outflow” amounts disclosed in the table are the contractual undiscounted cash flows liable for payment by the Group in relation to
all forward foreign exchange contracts in place at balance date. The cash flow hedge “inflow” amounts represent the corresponding
inflow of foreign currency back to the Group as a result of the gross settlement on those contracts, converted using the spot rate at
balance date. The carrying value shown is the net amount of derivative financial liabilities and assets as shown in the Consolidated
Statement of Financial Position.
Trade payables are shown at carrying value in the table. No discounting has been applied as the impact of discounting is not
material.
HALLENSTEIN GLASSON HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 1 AUGUST 2024
31
Liquidity risk
As at 1 August 2024
Trade and other payables
Less than
3 months
$000's
25,228
3-12
months
$000's
-
Total
$000's
25,228
Carrying
value
$000's
25,228
25,228 - 25,228 25,228
Forward foreign exchange contracts
Cash flow hedges:
- outflow (24,318) (40,613) (64,931) (64,931)
- inflow 25,038 41,176 66,214 66,246
- Net 720 563 1,283 1,315
As at 1 August 2023
Less than 3-12
Carrying
3 months
$000's
months
$000's
Total
$000's
value
$000's
Trade and other payables 21,494 - 21,494 21,494
21,494 - 21,494 21,494
Forward foreign exchange contracts
Cash flow hedges:
- outflow (28,127) (39,403) (67,530) (67,530)
- inflow 28,626 40,375 69,001 68,935
- Net 499 972 1,471 1,405
7.5.3 Credit Risk
Credit risk is the risk of the failure of a debtor or counterparty to honour its contractual obligations resulting in financial loss to the
Group. The Group incurs credit risk from trade receivables and transactions with financial institutions. The Group places its cash,
short-term investments, and derivative financial instruments with high credit quality financial institutions. Retail sales are
predominantly settled in cash or by using major credit cards. 0.0% (2023: 0.1%) of sales give rise to trade receivables. This
maximum exposure to credit risk is the carrying amount of trade receivables.
Concentration of credit risk with respect to debtors is limited due to the large number of customers included in the Group’s customer
base.
The Group does not require collateral or other security to support financial instruments with credit risk.
HALLENSTEIN GLASSON HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 1 AUGUST 2024
32
7.5.4 Market Risk
Foreign exchange risk
The Group is exposed to foreign exchange risk arising from currency exposure predominantly with the US dollar with the purchase
of inventory from overseas suppliers.
The Board has established a Treasury Risk Policy to manage the foreign exchange risk. The policy is reviewed on a regular basis,
and management report monthly to the Board to confirm policy is adhered to. All committed foreign currency requirements are fully
hedged, and approximately 50% (2023: 50%) of anticipated foreign currency requirements are hedged on a rolling twelve month
basis.
The Group uses forward exchange contracts with major retail banks only to hedge its foreign exchange risk arising from future
purchases.
Forward exchange contracts – cash flow hedges
These contracts are used for hedging committed or highly probable forecast purchases of inventory. The contracts are timed to
mature during the month the inventory is shipped and the liability settled. The cash flows are expected to occur at various dates
within one year from balance date.
When forward exchange contracts have been designated and tested as an effective hedge the portion of the gain or loss on the
hedging instrument that is determined to be an effective hedge is recognised directly in equity. These gains or losses will be released
in the profit or loss in the Consolidated Statement of Comprehensive Income at various dates over the following year as the hedged
risk crystallises.
At balance date the Group had entered into forward exchange contracts to sell the equivalent of NZ$64.931 million (2023:
NZ$67.530 million), primarily in US and AU Dollars. At balance date these contracts are represented by net assets of $1.315 million
(2023: assets of $1.405 million). When foreign exchange contracts are not designated and tested as an effective hedge, the gain
or loss on the foreign exchange contract is recognised in the profit or loss in the Consolidated Statement of Comprehensive Income.
At balance date there are no such contracts in place (2023: Nil).
Interest rate risk
The Group has no interest bearing liabilities. Exposure to interest rate risk arises only from the impact on income from operating
cash flows as a result of interest bearing assets, such as cash deposits.
Sensitivity analysis
Based on historical movements and volatilities and management’s knowledge and experience, management believes that the
following movements are ‘reasonably possible’ over a 12 month period:
Proportional foreign exchange movement of -10% (depreciation of NZD) and +10% (appreciation of NZD) against the
USD, from the year end rate of $0.5949 (2023: $0.6192).
Proportional foreign exchange movement of -10% (depreciation of NZD) and +10% (appreciation of NZD) against the
AUD, from the year end rate of $0.9151 (2023: $0.9279).
A parallel shift of +2% / -2% in the market interest rates from the year end deposit rate of 5.5% (2023: 5.5%).
HALLENSTEIN GLASSON HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 1 AUGUST 2024
33
If these movements were to occur, the post-tax impact on profit or loss and equity for each category of financial investment:
FINANCIAL ASSETS
7.5.5 Capital risk management
The Group’s objectives when managing capital are to maximise the value of shareholder equity and ensure that the Group continues
to safeguard its ability to continue as a going concern. Group capital consists of share capital, reserves and retained earnings. In
order to meet these objectives, the Group may adjust the amount of dividend payment made to shareholders. The Group has no
specific banking or other arrangements which require that the Group maintain specific equity levels.
The parent is not exposed to any interest rate or foreign exchange risk.
As at 1 August 2024
Carrying
amount
-2%
Profit
Interest
Equity
rate
+2%
Profit
Equity
For
-10%
Profit
eign exch
Equity
ange rate
+10%
Profit
Equity
$000's
$000's
$000's
$000's
$000's
$000's
$000's
$000's
$000's
FINANCIAL ASSETS
Loans and receivables
Cash and cash equivalents
45,915
(918)
(918)
918
918
2,365
2,365
(1,935)
(1,935)
Accounts receivable
407
-
-
-
-
-
-
-
-
Advances to Employees
847
-
-
-
-
-
-
-
-
Derivatives used for Hedging
Derivatives designated as cash flow hedges (forward foreign
exchange contracts)
1,315
-
-
-
-
-
5,297
-
(4,334)
FINANCIAL LIABILITIES
Liabilities at amortised cost
Trade and other payables
25,228
-
-
-
-
(1,541)
(1,541)
1,261
1,261
TOTAL INCREASE/DECREASE
(918)
(918)
918
918
824
6,121
(674)
(5,008)
As at 1 August 2023
Carrying
Interest rate
Foreign exchange rate
amount
-2%
+2%
-10%
+10%
Profit
Equity
Profit
Equity
Profit
Equity
Profit
Equity
$000's
$000's
$000's
$000's
$000's
$000's
$000's
$000's
$000's
Loans and receivables
Cash and cash equivalents
32,478
(650)
(650)
650
650
2,180
2,180
(1,784)
(1,784)
Accounts receivable
318
-
-
-
-
-
-
-
-
Advances to Employees
160
-
-
-
-
-
-
-
-
Derivatives used for Hedging
Derivatives designated as cash flow hedges (forward foreign
exchange contracts)
1,405
-
-
-
-
-
5,520
-
(4,516)
FINANCIAL LIABILITIES
Liabilities at amortised cost
Trade and other payables
21,494
-
-
-
-
(1,062)
(1,062)
869
869
TOTAL INCREASE/DECREASE
(650)
(650)
650
650
1,118
6,638
(915)
(5,431)
HALLENSTEIN GLASSON HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 1 AUGUST 2024
34
7.6
Events subsequent to balance date
Subsequent to year end, the Board has resolved to pay a final dividend of 26.5 cents per share (partially imputed at 75.6%) (2023:
24.0 cents partially imputed 75%). The dividend will be paid on 13
th
December 2024 to all shareholders on the Company’s register
as at 5:00pm, 6
th
December 2024.
Effective from 2 August 2024, Glassons Australia and Hallensteins Australia, previously registered as branches in New Zealand,
will become Australian companies registered with ASIC in accordance with Part 5B.1 of the Corporations Act 2001 (Cth)
(Australia). The effect of this will give rise to two operating subsidiaries in Australia.
There is no current year impact of the domiciliation.
Subsequent to year end, the functional currency of the Australian branches/subsidiaries has been reassessed. Over time there
has been a gradual change in operations in Australia which has culminated in converting the branches to subsidiaries as noted
above. Management has further determined that a change in functional currency from NZD to AUD upon the restructuring of the
Australian branches on 2 August 2024 is appropriate. This change will be applied prospectively with effect from 2 August 2024
and the Group will record exchange differences on translation to presentation currency in a foreign currency translation reserve
(FCTR) with effect from FY25.
7.7 Standards, amendments and interpretations to existing standards
Certain new accounting standards, amendments to accounting standards and interpretations have been published that are
mandatory for the 1 August 2024 reporting period have been adopted by the Group and have no material impact. There were also
certain new accounting standards, amendments to accounting standards and interpretations that have been published which are
not mandatory for the 1 August 2024 reporting period and have not been early adopted by the Group. These standards,
amendments or interpretations are yet to be assessed for the disclosure impacts for the future reporting periods.
PricewaterhouseCoopers, PwC Tower, 15 Customs Street West, Private Bag 92162, Auckland, 1142, New Zealand
T: +64 9 355 8000, www.pwc.co.nz
To the shareholders of Hallenstein Glasson Holdings Limited
Our opinion
In our opinion, the accompanying consolidated financial statements of Hallenstein Glasson Holdings
Limited (the Company), including its subsidiaries (the Group), present fairly, in all material respects,
the financial position of the Group as at 1 August 2024, its financial performance and its cash flows for
the year then ended in accordance with New Zealand Equivalents to International Financial Reporting
Standards (NZ IFRS) and International Financial Reporting Standards Accounting Standards (IFRS
Accounting Standards).
What we have audited
The Group's consolidated financial statements comprise:
the consolidated statement of financial position as at 1 August 2024;
the consolidated statement of comprehensive income for the year then ended;
the consolidated statement of changes in equity for the year then ended;
the consolidated statement of cash flows for the year then ended; and
the notes to the consolidated financial statements, comprising material accounting policy
information and other explanatory information.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs
(NZ)) and International Standards on Auditing (ISAs). Our responsibilities under those standards are
further described in the
section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Independence
We are independent of the Group in accordance with Professional and Ethical Standard 1 International
Code of Ethics for Assurance Practitioners (including International Independence Standards) (New
Zealand) (PES 1) issued by the New Zealand Auditing and Assurance Standards Board and the
International Code of Ethics for Professional Accountants (including International Independence
Standards) issued by the International Ethics Standards Board for Accountants (IESBA Code), and we
have fulfilled our other ethical responsibilities in accordance with these requirements.
Our firm carries out other services for the Group in the areas of tax compliance and tax advisory. In
addition, certain partners and employees of our firm may deal with the Group on normal terms within
the ordinary course of trading activities of the Group. The provision of these other services and
relationships have not impaired our independence as auditor of the Group.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the consolidated financial statements of the current year. These matters were addressed
in the context of our audit of the consolidated financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
PwC
Description of the key audit matter How our audit addressed the key audit matter
Inventory Valuation
As at 1 August 2024, the Group held
$27.5 million of finished goods, net of
inventory adjustments of $0.2 million.
Given the size of the inventory balance,
and the estimates and judgements
described below, the valuation of
inventory required significant audit
attention and is a key audit matter.
As disclosed in note 3.2, inventories are
held at the lower of cost and net realisable
value. At year end, the valuation of
inventory is reviewed by management and
its cost is reduced where inventory is
forecasted to be sold below cost.
The inventory adjustment is determined
based on various factors including
historical data, inventory ageing, current
trends and specific product information
from buyers. Determining the appropriate
level of provisioning involves judgement
and the application of assumptions
including management's estimation of
future selling prices.
Our audit procedures included:
●testing, on a sample basis, the accuracy of
inventory costing to supporting documentation and
calculations;
●testing, on a sample basis, the net realisable value
of inventory items by comparing the selling price to
the cost;
●performing analytical procedures on selected
inventory provisions to assess their
reasonableness and that the provisions amounts
were within expectations;
●assessing the level of aged inventory by
comparison to historical amounts, inventory
turnover levels and enquiries with management;
●considering the results of our testing and in
conjunction with management enquiry determined
whether any specific write downs were required;
and
●reviewing the appropriateness of disclosures in the
consolidated financial statements.
Our audit approach
Overview
Overall Group materiality: $2.6 million, which represents approximately 5% of
Group profit before tax.
We chose Group profit before tax as the benchmark because, in our view, it is
the benchmark against which the performance of the Group is most commonly
measured by users, and is a generally accepted benchmark.
As reported above, we have one key audit matter, being inventory valuation.
As part of designing our audit, we determined materiality and assessed the risks of material
misstatement in the consolidated financial statements. In particular, we considered where
management made subjective judgements; for example, in respect of significant accounting estimates
that involved making assumptions and considering future events that are inherently uncertain. As in all
of our audits, we also addressed the risk of management override of internal controls, including among
other matters, consideration of whether there was evidence of bias that represented a risk of material
misstatement due to fraud.
36
PwC
Materiality
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain
reasonable assurance about whether the consolidated financial statements are free from material
misstatement. Misstatements may arise due to fraud or error. They are considered material if,
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the consolidated financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality,
including the overall Group materiality for the consolidated financial statements as a whole as set out
above. These, together with qualitative considerations, helped us to determine the scope of our audit,
the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both
individually and in aggregate, on the consolidated financial statements as a whole.
How we tailored our group audit scope
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion
on the consolidated financial statements as a whole, taking into account the structure of the Group, the
accounting processes and controls, and the industry in which the Group operates.
Other information
The Directors are responsible for the other information. The other information comprises the
information included in the Annual Report, but does not include the consolidated financial statements
and our auditor's report thereon. The Annual Report is expected to be made available to us after the
date of this auditor's report.
Our opinion on the consolidated financial statements does not cover the other information and we will
not express any form of audit opinion or assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially inconsistent
with the consolidated financial statements or our knowledge obtained in the audit, or otherwise
appears to be materially misstated.
When we read the other information not yet received, if we conclude that there is a material
misstatement therein, we are required to communicate the matter to the Directors and use our
professional judgement to determine the appropriate action to take.
Responsibilities of the Directors for the consolidated financial statements
The Directors are responsible, on behalf of the Company, for the preparation and fair presentation of
the consolidated financial statements in accordance with NZ IFRS and IFRS Accounting Standards,
and for such internal control as the Directors determine is necessary to enable the preparation of
consolidated financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the consolidated financial statements, the Directors are responsible for assessing the
concern and using the going concern basis of accounting unless the Directors either intend to liquidate
the Group or to cease operations, or have no realistic alternative but to do so.
37
PwC
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements, as a whole, are free from material misstatement, whether due to fraud or error, and to
surance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs (NZ) and ISAs will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these consolidated financial statements.
A further description of our responsibilities for the audit of the consolidated financial statements is
https://www.xrb.govt.nz/assurance-standards/auditors-responsibilities/audit-report-1/
Who we report to
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
audit work, for this report or for the opinions we have formed.
Senaratne (Indy Sena).
For and on behalf of:
Chartered AccountantsAuckland
30 September 2024
38
---
30 September 2024
HALLENSTEIN GLASSON HOLDINGS LIMITED
RESULTS FOR FULL YEAR ENDED 1 AUGUST 2024
The Company advises that Group sales for the 12 months to 1 August 2024 were $435.6 million,
an
increase of 6.3% on the prior year ($409.7 million), with an improved gross margin of +210 basis
points.
The audited net profit before tax for the 12 months was $52.1 million, an increase of +14.7% on the prior
corresponding period ($45.4 million).
Group audited net profit after tax was $34.5 million (prior year $32.0 million). This includes a net non‐
cash deferred tax expense of $1.1 million connected
to changes in tax legislation on the deductibility of
depreciation on non‐residential buildings. This is a pleasing result given the difficult retail environment in
Australasia, and in particular New Zealand.
Gross margin at 59.4% grew from 57.3% in the prior year. Margin growth was due to a focus of
onboarding
new suppliers, an improvement in freight costs, and most significantly well controlled stock
levels resulting in more full‐price sales and lower discounting. This is despite a challenging foreign
exchange rate for inventory purchases, which was lower than the prior corresponding period.
The Group continued to focus on improved product
and sourcing, as well as managing operating costs
wherever possible given the current economic environment. Inventory levels were tightly managed,
improving stock turn year on year, driving improved liquidity. This gives the Group the flexibility needed
to adjust to the trading environment and consumer preferences while executing our core business
strategy.
The Group maintains a strong balance sheet with a cash balance of $45.9 million at the end of FY24, up
$13.4 million on the previous year.
Glassons
Australia
Sales in Australia were $218.1 million which was an increase of +14.1% on the prior corresponding
period. Net profit after tax was
$19.5 million, an increase of +14.0% on the prior year ($17.1 million).
Two new stores were opened during the year. A store in Knox, Victoria opened in November, followed by
the March opening of Rundle Mall, our second Adelaide store. Throughout the year, the Bondi Junction
store in New South Wales
and the Fountain Gate store in Victoria were both extended and refurbished.
The Warringah store in New South Wales was also refurbished. In total we have 38 stores in Australia,
and we continue to explore new store opportunities and larger format stores to better showcase our
product offering and improve customer experience as we continue to expand in the Australian market.
New Zealand
Sales in New Zealand for the year were $110.1 million, a decrease of ‐2.1% on the prior corresponding
period. Net profit after tax was $10.8 million, a decrease of ‐1.0% on the prior corresponding period
($10.9 million), reflective of a challenging trading environment.
Over the last year, the Albany and Christchurch CBD stores were both relocated to improved locations
from which we have seen sales growth from both.
After careful consideration, the Blenheim and
Chartwell stores were both closed during the year. Post year end our Lynn Mall store was refurbished,
the Timaru store has closed, and a new store has been opened at the Manawa Bay Outlet Centre near
Auckland Airport.
The Glassons brand’s relentless commitment to stay
on trend, remain agile and provide high quality
fashion at accessible price points has enabled the brand to grow successfully, despite operating in the
most challenging retail environment in many years. Glassons remains focused on creating exciting and
engaging store experiences, maintaining a sustainable and ethical supply chain and is
well placed to
capitalise on the future recovery in consumer sentiment.
Hallensteins
Sales for the 12‐month period were $107.5 million (including Australia), an increase of +1.3% on the prior
corresponding period. Net profit after tax was $5.3 million, an increase of +37.4% on the prior
corresponding period ($3.9 million).
During the year, our new concept design was rolled out in the Manukau store, which has delivered sales
growth since reopening. The Timaru store was also refurbished, and the Queenstown store was closed in
July. Post year end, Hallensteins opened a store in the new Manawa Bay outlet mall near Auckland
Airport. In Australia we now operate 5 Hallenstein stores, the Garden City store opened in a new location
in November 2023 and has seen significant sales growth since reopening. A new pop‐up store in Robina,
Gold Coast was opened in the lead up to last Christmas.
Hallensteins is also working
with relevant content creators and brand ambassadors with a focus on what
matters to our customers, to increase brand awareness both in New Zealand and Australia. Partnerships
with the New Zealand Warriors rugby league team has provided great content and strong brand
recognition, and we look forward to continuing the
partnership into the new financial year.
E‐Commerce and Digital
The Group continues with a customer‐centric focus to ensure that customers have a positive experience
whichever way they choose to shop and to support this, we continue to invest in people, technology and
marketing. Online sales now represent 18.2% of
total sales for the full financial year, broadly in line with
the 18.3% reported in the prior corresponding period.
Digital investment is sustained to ensure that growth continues. The Hallensteins App was released in the
second half of the year and the Glassons App now has over 1.9 million downloads. User experience is
paramount, so the websites and apps continue to be developed and improved to ensure they are
catering
to their users and deliver a seamless experience.
Dividend
The Directors have declared a final dividend of 26.5 cents per share (partially imputed at 75.6%) (24 cents
per share partially imputed at 75.0% last year) to be paid on 13th December 2024. Together with the
interim dividend of 24 cents per share that was paid on 18th April 2024, the full year dividend is 50.5
cents per share. The dividend payment has grown as the Company’s balance sheet continues to remain
strong, and inventory levels well controlled.
Future Outlook
The first eight weeks of the new financial year have seen Group sales improve by +10.9% on the prior
corresponding period. The result to date is driven by good performance from the Australian market,
although cycling a negative prior corresponding period, and is not indicative of expectations for the peak
trade period to come. The environment in New Zealand remains more challenging
as the current
economic conditions and cost‐of‐living pressures continue to impact on consumers spending habits
across both brands.
Alongside the two new stores just opened in Manawa Bay in September, the Group has additional
refurbishment and new store opportunities to support growth in 2025. We continue to look for
operational and cost efficiencies, while remaining flexible with our product offerings to ensure we are
well positioned for the upcoming key black Friday and Christmas periods.
A further update will be provided at the Annual Meeting of Shareholders in December 2024.
Chris Kinraid
Group CEO
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.
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