Hallenstein Glasson Holdings Results

27 March 2009

Hallenstein Glasson Holdings Limited Results For The 6 Month Period Ended
1 February 2009

The directors advise that unaudited net profit after tax for the 6 months ended 1 February 2009 was $5.481 million, down -40.7% on the prior year ($9.237 million). The result confirms guidance issued on the 4th February 2009.
Group sales were $95.713 million, down -2.8% on the prior year ($98.500 million).

The retail environment has been exceptionally difficult, and the quest for the consumers’ dollar has been at the expense of margin. We have found it necessary to aggressively promote in order to maintain market share and ensure inventory levels are managed effectively. The gross profit on sales was 53.3%, down 2.7 points from 56.0% for the previous period. Notwithstanding a disappointing result, the group balance sheet remains very strong. Inventory levels at $12.180 million were below the prior period level of $16.678 million, again demonstrating the group’s ability to manage inventory.

During the 6 months period to 1 February 2009 a total of 3 new stores were added. In Australia Glassons opened a new store in August 2008 at Doncaster in Melbourne, and in New Zealand a further Glassons store was opened in late November at Blenheim. The Storm chain opened its fourth store at Milford (Auckland) in October 2008.

Further New Zealand site opportunities are being reviewed for each chain, and Hallensteins will open a new store in Masterton in late March 2009.

Future Outlook
The retail environment is extremely difficult to predict. Rising unemployment and concerns over job security are clearly having a dampening effect on demand, yet falling interest rates, reduced taxes, and lower petrol prices are having a counterbalancing effect.
Same store sales for the first 7 weeks of the winter season have been +7% on last year, but sales have been achieved on a lower gross margin than last year so that overall profitability is marginally below last year. These results indicate some resilience, but the key winter trading months have yet to come and it is much too early to make any pronouncement on earnings for the current period.

Dividend
The directors have resolved to pay an interim dividend of 10 cents per share (last year 17 cents). The dividend will be fully imputed at the 33% tax rate or 4.925 cents per share. The dividend will consume $5.965 million dollars from total cash reserves of $20.275 million as at 1 February 2009.

The interim dividend will be paid on 17th April 2009 for shareholders registered as at 5pm 9th April
2009.

ENDS

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