Strong New Zealand sales have buoyed Hallenstein Glasson Holdings Ltd's after-tax profit for the first half of its financial year, but current sales are being undermined by warmer-than-usual autumn weather.
For the six months to January, revenue was up 6.6% to $115.7 million, earnings before interest and tax (ebit) was up 15% to $14.44 million while after-tax profit climbed almost 15%, to $10.3 million.
Hallenstein Glasson chief executive Graeme Popplewell said there were some ''significant improvements'' in the first half of the year compared with last year, but the beginning of the second half had been a challenge.
''The first seven weeks of the new season have been a challenge with record warm temperatures making it difficult to get traction for the winter season both in Australia and in New Zealand,'' he said in a statement to the market.
Subsequently, group sales were down 1% on last year, but as cooler weather had started, that trend had begun to reverse, he said. Hallenstein Glasson's shares were up 13c at $5.65 following the announcement. Last year's 14.5c dividend was boosted to 16c.
Craigs Investment Partners broker Peter McIntyre said the 1% decline in present sales reflected the sector's seasonl nature, highlighting that, in general, Hallenstein Glasson was very good with the all-crucial inventory control.
Forsyth Barr broker Suzanne Kinnaird said she expected margins to increase for Hallensteins, Glassons NZ and Storm, but Forsyth Barr would be reducing its Australian earnings forecasts.
''Continued investment in Australia will help build critical mass but the increased penetration at low economic returns is adding little value in the near-term,'' Ms Kinnaird said.
Mr Popplewell said the company did not expect the retail environment to show any significant lift and was ''working on the premise that conditions will be very competitive''.
The Hallensteins brand sales for the half year were up 6%, with after-tax profit up 21% at $5.14 million, while the Storm brand sales rose 39%, with after-tax profit up 72% at $822,000.
