By NZPA
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Thursday 5th December 2002 |
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The December trading period, however, accounts for a large proportion of Hallenstein's profit in the first half and until December was complete it was impossible to accurately project earnings, the company said.
It told shareholders at the annual meeting that the 2003 financial year may be influenced by international events that could have a "ripple down" impact on New Zealand's economy.
Currently the New Zealand domestic economy remains relatively strong, in spite of some weaknesses being experienced in the USA and European economies, it said.
"We welcome this strong New Zealand domestic economy continuing. However, the terrorist activities around the world and the current Iraq situation are overhanging the world economies, and New Zealand will not be able to remain unaffected should something unsavoury eventuate."
Chairman Warren Bell said the issue of "unrealistic" rental increases sought by some major mall landlords was a concern, "and as pressure continues we are forced to look at other options to maintain our profit base".
To this end the larger format Hallensteins store recently opened in Albany, Auckland, had shown encouraging results, and further large format stores in lower rental areas would be considered as the opportunity arose.
In November HBK Girl opened two new stores in St Lukes Mall, Auckland, and in Napier, bringing the total number of HBK Girl stores to 15.
Hallenstein in the 2002 year made an audited profit after tax of $11.432 million, a 0.3 percent increase on the same period last year. Sales revenue was 4.67 percent higher at $175 million.
Like many New Zealand companies that had expanded into Australia, it was having difficulty making a profit.
After 2000 it was sufficiently encouraged to expand from six stores to the present 16. But the costs associated with putting in place an appropriate infrastructure, an Australian-based management team, together with one-off costs and extremely difficult trading conditions in the first half of the 2002 financial year meant the Australian operations did not meet budget expectations.
Mr Bell said the board had fully reviewed the Australian operations, "and remains committed to establishing a strong presence in Victoria and New South Wales".
"Australian trading to date in the new financial year would indicate an improved Australian trading result for the summer season, if current trends continue."
In New Zealand the company's three chains, Glassons, Hallensteins and HBK Girl, all increased market share.
Mr Bell said that Hallensteins could benefit from one of its traditional competitors, Hugh Wright, being placed in receivership.
Tim Glasson is stepping down as managing director of Glassons, and Cliff Kinraid has been appointed group managing director of Hallenstein Glasson Holdings.
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