Hallenstein Glasson Holdings Ltd [HLG.NZX] had a profit downgrade yesterday and they indicated that net profit after tax for the 6 months ended 1 February 2011 is projected to be in the range of $7.0 –$ 7.4 million, a decrease of 13% - 18% on the prior year ($8.549 million). Sales were marginally down indicating HLG was discounting to keep market share.
This comes on top of a pretty good FY 2010 result.
I was only questioning myself in September last year about whether I should sell or hold given that the shares were rocketing up and they peaked in November last year at $4.60.
The shares have been losing ground over the last few months before this announcement and they were down by 24c to $3.86 or almost 6% yesterday on low volumes traded.
It is a well managed company with excellent dividends and this bad news could be a good opportunity to pick some up as the stock price drifts south.
Buy on inevitable further weakness in the retail sector.
Disclosure: I own HLG shares in the Share Investor Portfolio
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