Hallenstein Glasson Holdings Limited, Annual Meeting 2025

1 December 2025

Hallenstein Glasson Holdings Limited (HLG)

The company will hold its Annual Shareholders Meeting at 10.00am Wednesday 10 December 2025.

The location is Rydges Latimer, 30 Latimer Square, Christchurch.

You can also join the meeting online at this link.

Company Overview

The company was formed in 1985 from the merger of Hallenstein Brothers, a menswear retailer first established in 1873, and Glassons, a fashion retailer founded in the early 1900’s. It operates 121 stores employing over 2,500 people in New Zealand and Australia trading under the Hallenstein Brothers brand in men’s fashion and Glassons in women’s fashion.

Peter Steenson was appointed to the Board in August 2025. The CEO, Chris Kinraid, resigned in September 2025 after a short tenure.

Current Strategy

Neither the Annual Report nor the company’s website sets out the company’s current strategy, although ongoing investment within Australia is clearly a major focus. Despite the lack of clarity for investors when it comes to strategy, the company maintains strong financial performance.

Previous Year Shareholder Meeting

NZSA recorded the following key items at last year’s annual shareholder meeting:

1. A pleasing result for the 12 months to 1 August 2024 given the difficult retail environment in Australasia, and particularly New Zealand.
2.  Sales were up 6.3% and profit before tax up 14.7%.
3. Online sales now represent 18.2% of total sales.

The meeting report is available at this link.

Disclaimer

To the maximum extent permitted by law, New Zealand Shareholders Association Inc. (NZSA) will not be liable, whether in tort (including negligence) or otherwise, to you or any other person in relation to this document, including any error in it.

Forward looking statements are inherently fallible.

Information on www.nzshareholders.co.nz and in this document may contain forward-looking statements and projections. For any number of reasons, the future could be different – potentially materially different. For example, assumptions may be wrong, risks may crystallise, unexpected things may happen. We give no warranty or representation as to any future financial performance or any other future matter. We may not update our website and related materials for changes.

There is no offer or financial advice in our documents/website.

Information included on www.nzshareholders.co.nz and in this document is for information purposes only. It is not an offer of financial products, or a proposal or invitation to make any such offer. It is not financial advice and does not take into account any person’s individual circumstances or objectives. Prior to making any investment decision, NZSA recommends that you seek professional advice from a licensed financial advice provider.

There are no representations as to accuracy or completeness.

The information, calculations and any opinions on www.nzshareholders.co.nz and in this document are based upon sources believed reliable. The NZSA, its officers and directors make no representations as to their accuracy or completeness. All opinions reflect our judgement on the date of communication and are subject to change without notice.

Please observe any applicable legal restrictions on distribution

Distribution of our documents and materials on www.nzshareholders.co.nz (including electronically) may be restricted by law. You should observe all such restrictions which may apply in your jurisdiction.

Key

The following sections calculate an objective rating against criteria contained within NZSA policies.

Governance

NZSA assessment against its key policy criteria are summarised below.

Directors Fees: The Remuneration Policy on the company’s website refers to a “director fee pool”, but the quantum is not disclosed in the Annual Report. It appears from the shareholder resolution put forward in the Notice of Meeting that the current fee pool is $725,000.

The company discloses the actual amounts paid to each Director, as well as noting an additional consulting fee paid to Karen Bycroft. The Remuneration Policy states that additional fees may be paid for Committee work, but if this has occurred the amounts are not disclosed separately in the Annual Report. It is not disclosed if Directors can be paid for any additional work.

We also note the following in the Annual Report. “Total remuneration of $988,000 was paid by the Company to close family members of the Board of Directors for individuals that were either employed or engaged as consultants by the Company in the year ended 1 August 2025.”

Director Share Ownership:  There is no disclosure as to whether Directors are required to own shares. We note three of the Directors do not own shares, implying there is no compulsion.

NZSA encourages share ownership by independent Directors but does not support compulsion as this reduces the pool of available Directors, may compromise independence, and removes the ‘market signal’ associated with share purchases.

CEO Remuneration:  The company discloses its remuneration policy on its website, which includes an overview of the remuneration philosophy applicable to the company. The Remuneration Committee is responsible for implementing the policy.

Incentives: The former CEO was paid a short-term incentive (STI) in cash.

NZSA encourages fulsome disclosure in relation to any incentive payments made to the CEO, including disclosure of measures (or measure ‘groups’), weightings, targets, and the level of achievement versus target for each component associated with any awards. This methodology is supported by the NZX Remuneration Reporting Template.

The only disclosure around the STI is the amount $145,000 and that it was linked to the Group’s financial performance against set targets. It is unclear as to whether this STI relates to the previous year (ie, earned in FY24 but paid in FY25) or was the amount earned in FY25.

The company also notes that “Other Payments/Benefits for Mr J Glasson comprise a base salary, short-term incentives, company car and contributions to superannuation as remuneration for his role as CEO of Glassons Australia.” There is no disclosure as to STI methodology for James Glasson.

The company does not disclose the gender pay gap and CEO/employee remuneration ratio.

HLG’s remuneration disclosures are the worst amongst the NZ50 index constituents. We encourage the company to offer far greater transparency for its shareholders in future.

Golden Parachutes: In the interests of transparency, NZSA believes there should be explicit disclosure around the severance terms and notice periods associated with the CEO, including whether specific termination payments are offered.

Director Independence:  The company describes five of the nine Directors as independent, and therefore the Board (and Audit Committee) has a majority of independent Directors. The Chair is a non-independent Director.

We note the lengthy disclosure on pages 59-60 of the Annual Report around Director independence. The company discusses the status of both Malcolm Ford and Graeme Popplewell, and the rationale of the Board in determining their independent status. The statement includes the following:

“The Board is satisfied that it operates in an effective and independent manner notwithstanding a number of its directors are technically considered to be non-independent directors for the purpose of the NZX Listing Rules.”

Notwithstanding this statement, under both NZX Corporate Governance Code factors and NZSA policy, there are key factors applicable that are at play affecting the potential status of five of the nine Directors as non-independent. NZSA maintains (and the NZX Code) that the Board should comprise a majority of independent Directors and that the Chair should be an independent Director.

NZSA believes this is particularly important for smaller investors given the shareholder structure of the company.

NZSA believes that HLG should consider an enhanced approach towards identifying and recruiting independent directors to ensure effective future succession.

Board Composition:  The Board comprises nine Directors. The market capitalisation is $594 million. We note the largest New Zealand based company on the NZX Fisher and Paykel Healthcare with a market capitalisation of $22 billion has a Board of seven Directors.

The Annual Report does not include a skills matrix that attributes skill sets to individual Directors to demonstrate how they contribute and add value to the governance of the company. While it is difficult to assess the skills of directors in the absence of any meaningful disclosure, Directors appear to have appropriate functional experience, with good social and experiential diversity.

We note in particular the retail-focused skills of Karen Bycroft and Sandra Vincent, as well as the procurement/sourcing experience of Malcolm Ford. We believe these skills are highly relevant for the company. HLG’s remaining 6 directors cover financial and legal skills, or represent family interests. From a succession perspective, given the long service of Malcolm Ford, we believe a primary focus on procurement and/or sourcing experience is relevant. We also encourage the company to reduce the number of directors representing other interests.

The company does not participate in the IoD’s Future Director programme designed to develop and mentor the next generation of Directors. NZSA expect NZX50 companies to participate as part of a responsibility to develop and mentor the next generation of Directors.

Director Tenure:  NZSA looks for evidence of ongoing succession or ‘staggered’ appointment dates that reduce the risks associated with effective knowledge transfer in the event of succession. We also prefer a term maximum of 9-12 years, unless there are exceptional circumstances that may apply.

We note the company has four long-serving Directors, appointed in 1985, 1986 and 2010. The other five Directors were appointed between 2014 and 2025. 

NZSA policy is that unless there are exceptional circumstances a Director should serve between 9-12 years to ensure ongoing Board sustainability. While we appreciate the importance of institutional knowledge, we would wish to see further evidence of a more balanced approach to Director succession to mitigate governance risk.

We appreciate the unique energy and insight a founder-shareholder (in this case, the Glasson family) can bring to a Board. We also note the appointment of James Glasson to the Board and recognise that this provides a succession option for the future.

ASM Format: Hallenstein Glasson Holdings Limited is holding a ‘hybrid’ meeting, (i.e., physical, and virtual), a format preferred by NZSA as a way of promoting shareholder engagement while maximising participation.

Independent Advice for the Board & Risk Management: NZSA looks for evidence, through disclosures, that a Board has access to appropriate internal and external expertise to support board assurance activities. We also look to see Boards are across their risk management responsibilities. 

There is no disclosure in the Annual Report or the Board Charter on the extent to which Board members can seek external or internal advice to support decision-making, nor the extent to which internal assurance staff have unfettered access to the Board.

The company offers some disclosure of financial risks, together with reference to a Risk Management Framework in the Annual Report – however, the framework is not disclosed. We note the sustainability disclosures in the Annual Report and on the website including a Sustainability Framework. There is only limited disclosure as to the processes by which risks are governed. We do note that the Board includes a number of executive directors, likely to offer the Board direct visibility into business risks.

Audit

NZSA assessment against its key policy criteria are summarised below.

Audit Independence:  Good disclosure.

Audit Rotation:  The company ensures the Lead Audit Partner is rotated at 5 years as required by the NZX Listing Rules. There is no disclosure as to the tenure of the current audit firm. NZSA also expects disclosure of the appointment dates of the Lead Audit Partner and Audit Firm in the Annual Report to improve transparency for investors.

Environmental Sustainability

The company has not yet released its FY25 climate reporting disclosure. We encourage the company to consider releasing material at the same time as its annual report, to ensure all relevbant information is available for investors.

Ethical and Social

NZSA assessment against its key policy criteria are summarised below.

Whistleblowing:  The Code of Ethics on the company’s website includes details of how to report a breach of the Code and that the company will stand behind any employee who makes a complaint in good faith.

Political Donations:  The Annual Report discloses that no donations were made. NZSA also expects an explicit disclosure around political donations.

Financial & Performance

Hallenstein Glasson’s share price rose from $7.40 to $9.36 (as of 22^nd October 2025) over the last 12 months – a 29% increase. This compares favourably with the NZX 50 which rose 4% in the same period. The capitalisation of HLG is $570m placing it 46^th out of 115 companies on the NZX by size and makes it a large company.

¹ per share figures based off actual shares at balance date (not weighted average)

2025 was a great year for Hallensteins, in what has been a difficult retail trading environment. All metrics we monitor improved – and some substantially. The company managed to maintain their gross profit margin at last year’s high level. Sales revenues rose 8% to $471m and the gross profit margin held steady at 59%, providing an 8% improvement in gross profit to $279m.

Total costs rose in line with the rise in sales, with total expenses rising 7% to $219m. Administration Expenses continued their forward march up another 11% to $40.6m and we note the continued increase in these over the last few years.

Although costs were up, operating profit was up 12% to $61.0m and subsequently a much higher NPAT of $39.5m (another record) was reported, delivering EPS of $0.662 placing HLG on a slightly elevated PE of 14.

The NTA of HLG is $1.85 and the company trades at a large 415% premium to their NTA signalling investors believe the company is utilising its assets effectively.

The company is in sound financial position, with a healthy current ratio of 1.38 and a debt equity ratio of 1.07. It must be noted that the company has no interest-bearing debt, the only non-current liability being leases. (Leases are still obligations and thus comprise a component of the balance sheet as per IFRS 16)

The operating cashflow for HLG is high and robust at $88.6m and delivers $1.49 in cents per share. This makes HLG a “cash cow”.

HLG paid increased dividends of $0.55 for the year. (Dividends were imputed to 16%, less than last year). These are high dividend payments where full imputation is not provided. Other sources of returning funds to shareholders may be considered.

In a brief outlook statement provided in a media release the company summarised by saying that:

“The first seven weeks of the new financial year have delivered a solid start, with Group sales up +12.9% on the prior corresponding period, driven primarily by the Australian market and the ongoing contribution from stores opened or refurbished in FY2025. Current trading performance should not be seen as indicative of results through the key trading months in the lead up to Christmas”.

Timothy Charles Glasson is the largest shareholder with a 17.95% cornerstone holding.

Resolutions

Peter Steenson was appointed to the Board 13 August 2025 and is therefore required to offer himself for election. He was formerly employed by EY for over 30 years. Peter has expertise in accounting, finance and tax matters particularly relating to property, construction, and financing. In his role at EY Peter provided a full range of reporting, financial, tax and strategic advice to domestic and international businesses. Peter is a Fellow Chartered Accountant (FCA) of Chartered Accountants Australia and New Zealand (CAANZ) and holds a Master of Commerce in Economics (M. Com.Hons) and a Bachelor of Commerce (B. Com), majoring in both Accounting and Economics, from the University of Canterbury.

We will vote undirected proxies IN FAVOUR of this resolution.

Malcolm Ford was appointed to the Board in June 2010. His background includes 20 years’ experience in direct sourcing, particularly in Asia. He also has experience in brand management across wholesale and retail markets.

We refer to our comments above under Board Independence and Board Composition above. NZSA believes the Board is too large for the size of the company, with a significant proportion of long-serving Directors. We believe the Board requires further refreshment and renewal. Specifically in the case of Malcolm Ford, while we appreciate the company’s efforts to disclose its rationale as regards his independence status, we struggle to agree with that assessment.

Nonetheless, we note his experience in relation to procurement and/or sourcing from the limited disclosure that has been provided. We believe that these functional skills are highly relevant for HLG’s governance.

On this basis, we will reluctantly vote undirected proxies IN FAVOUR of this resolution. We remain concerned as to the company’s Board succession plan and the extent of underlying board independence.

Jo Appleyard was appointed to the Board in November 2022. She is a partner at Anderson Lloyd and is a senior practitioner with over 30 years’ experience. Jo specialises in employment, commercial and resource management law. Jo was a member of the NZ Markets Disciplinary Tribunal between 2011 and 2020.

We will vote undirected proxies IN FAVOUR of this resolution.

The current Fee Pool was approved by shareholders at the 2023 ASM. The Notice of Meeting includes the following statement.

“The proposed fee pool of NZ$854,000 per annum is calculated on the basis of eight non-executive directors (rather than seven non-executive directors) and also includes an inflationary adjustment in line with the total percentage change in the Consumer Price Index published by Stats NZ between Q3 2023 and Q3 2025.”

There is no independent Report to justify the increase. NZSA policy is that where Boards seek a fee increase, they should commission an independent Report for shareholders.

Nonetheless we have reviewed the proposed fees against our database of similar sized companies (with similar complexity) and believe the proposed fees are appropriate.

We will vote undirected proxies IN FAVOUR of this resolution.

This is an administrative resolution.

We will vote undirected proxies IN FAVOUR of this resolution.

Proxies

You can vote online or appoint a proxy at https://www.investorvote.com.au/

Instructions are on the Proxy/voting paper sent to you.

Voting and proxy appointments close 10.00am Monday 8 December 2025.

Please note you can appoint the Association as your proxy. We will have a representative attending the meeting.

The Team at NZSA