Hallenstein Brothers Business Analysis

Profitability is a business’s ability to earn a profit. Profit is what is left of a business’s revenue after it has paid all of the expenses relation to the generation of this revenue. These costs include the production of a product and other expenses related to the business’s activities. If a business is doing well it will regarded as very profitable. If the business is not doing as well it will not be as profitable as they will be making less money.
Hallensteins Brothers growth over recent years has been substantial and sufficient in keeping the business alive. The total yearly revenue at 1 August 2013 being at a decrease of -6,658,000 in 2013. In 2012 the business was in exceeds of 2,976,000. What lead to Hallensteins making a significant
With this their net profit (after tax) rose by a staggering 17.71%! This brand has redefined its place in the market and did significantly well for such a challenging market. Three stores were closed related to the Brothers brand during this time. Their second brand, Storm, had a huge increase in sales of 24%, 17% after tax. Storm is currently only running one store(m). This may affect the impact on the business as a whole as yes, the sales have gone up but only for one store. This could mean that it is making the percentage increase look significantly larger than what it actually reflects. Hallensteins also runs a brand called Glassons in both New Zealand and Australia. Glassons NZ had a 3% decrease in sales due to a poor winter season and therefore lead to a decline in profit of 21.77%. Glassons AUS had an increase in sales of 6.45%. This may look good at a glance but it lead to a loss after tax of -$1.161 million NZD. This includes the losses of 500,000 for store relocation and reconstruction. During this period Hallensteins also opened three other stores and closed another. In 2013 this was a significant year in online growth for the company with the recent popularity of online shopping (being able to purchase items from stores online without having to go into them) and online browsing Hallensteins decided to focus more into their investment into technology and people
Their assists remain constant as does most of the business. For a young and aspiring investor such as James this would mean that Hallensteins is a company that is safe to invest in without fear of losing all cash invested due to the company potentially not having enough resources to survive a financial year.
Investing in a company such as Hallensteins requires planning if you do not have money to burn. We can predict our possible profits by looking at the company Earnings Per Share (EPS) figure in order to understand the average return on equity that will be attained per period. To get a full understanding of if we will make money or lose it in Hallensteins we can compare the EPS of Hallensteins to the EPS of another company. This is necessary to enable James to receive the maximum amount of value in the time frame he wants. The current EPS for Hallensteins is
Now if we compare this to