Ann: HALFYR: HBY: Hellaby Holdings Limited - Inte

• Release Date: 19/02/13 16:06
• Summary: HALFYR: HBY: Hellaby Holdings Limited - Interim Announcement
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HBY
19/02/2013 14:06
HALFYR

REL: 1406 HRS Hellaby Holdings Limited

HALFYR: HBY: Hellaby Holdings Limited - Interim Announcement

HELLABY HOLDINGS LIMITED - NZX / Media Release: 19 February 2013

Hellaby on track for future growth despite weaker first half

Efficiencies from operational and capital restructuring in recent years have
enabled Hellaby Holdings Limited to deliver a steady trading performance in
sluggish economic conditions, however increased corporate costs as the
company gears up for future expansion have impacted its first half result.

Chairman John Maasland said the company's shift from turnaround to
acquisition mode has driven a significant level of investment in key areas to
support the company's growth programme.

"We now have a solid pipeline of acquisition opportunities, and are delighted
to have recently announced our first acquisition in this programme.  However
there is always a time lag between the costs of acquisition against the
returns received, but we fully expect these costs to generate long term value
for shareholders.

Despite a weaker overall result for the first half, the board is confident
that Hellaby is in excellent shape to continue reshaping its investment
portfolio and pursuing its growth objectives."

Hellaby's Managing Director John Williamson said that the group's four
divisions faced challenging market conditions due to high levels of
price-driven competition, during the six month period to 31 December 2012.

Group sales held steady at $243.7 million for the half year period, 1.0%
higher than last year's $241.2 million. Most of the growth was driven by
solid performances in the Equipment and Automotive divisions, but offset by
weaker performances from Packaging and Footwear.

"Three of the group's four divisions achieved operating profits equal to or
better than the same period last year, with only Footwear performing below
last year's level. With the first half's earnings traditionally contributing
a lower proportion of the full year's result we are confident that second
half performance will improve.

To keep this in perspective, our subsidiaries are still collectively
achieving a return on funds employed (ROFE) of 24.8%, well ahead of our group
target of 20%, and at an outstanding level by any measure for these types of
businesses."

Mr Williamson said that corporate costs, due to increased acquisition due
diligence and investment in the company's future-proofing leadership
programme, had impacted group trading EBITDA (trading surplus before
interest, tax, depreciation, amortisation and other non-trading transactions)
which at $13.7 million, was 13.3% lower than $15.8 million for the same
period last year.

Group trading EBIT (trading surplus before interest, tax and other
non-trading transactions) was $10.6 million compared to $12.2 million last
year.

Group NPAT (net profit after tax) was $6.2 million, compared to $7.8 million
for the same six month period last year.  Mr Williamson said that lower
interest and tax costs were largely offset by a $1.3 million non-trading
expense during the period for the parent company's long-term executive
incentive scheme, which concluded on 30 November 2012. The performance
criteria of this three year incentive scheme was total shareholder return,
being the increase in share price plus dividends, adjusted for any new equity
issued. A total shareholder return of $159 million, a 209% increase, was
achieved in the three year period to 30 November 2012, and the full payment
represented around 1.85% of that value generated.

"While a lower half-year result is not ideal, we should note that these
corporate costs have been incurred either as a reflection of increased value
already delivered to shareholders, or to pursue quality growth in future
shareholder value" said Mr Williamson.

An interim dividend of 5 cents per share has been declared, which is the same
amount as the prior year.  The record date is 12 April 2013, with payment to
be made on 19 April 2013.

Hellaby made significant progress in its acquisition programme in December
when it reached conditional agreement to acquire an 85% shareholding in the
industrial services group Contract Resources Holdings Limited (Contract
Resources). This agreement is scheduled to settle effective 31 March 2013.

"Because Contract Resources is a major acquisition and because it negatively
impacts Hellaby's profit performance for the final quarter of this financial
year, Hellaby is providing a FY2013 profit guidance" said Mr Williamson.

"On the basis that the Contract Resources acquisition proceeds, for the three
months to 30 June 2013, the combination of our 85% share of Contract
Resources profits, less one-off transaction and funding costs, is expected to
negatively impact on Hellaby's NPAT for the year to 30 June 2013 by around
$0.8 million."

Mr Williamson said that based on a stronger second half operating performance
expected from existing subsidiaries, and the Contract Resources acquisition
impact, Hellaby is currently forecasting a 30 June 2013 full-year NPAT of
around $18.5 million.

Contract Resources is currently forecast to achieve greater than $20 million
EBITDA for the year ended 30 June 2014. As a debt-funded acquisition,
Contract Resources is expected to positively impact Hellaby's earnings per
share for that financial year.

Mr Williamson said overall Hellaby is in very good shape.

"We remain well above our return on funds employed target, our balance sheet
is strong and our net asset backing has further improved. Our subsidiaries
are lean and agile, with management constantly reviewing and adjusting for
market conditions. All investment is carefully considered.  We expect the
impending acquisition of Contract Resources to mark the commencement of
Hellaby's growth phase through acquisition."

ends

For further information, please contact:

John Williamson
Chief Executive Officer
Hellaby Holdings Limited
Phone: 09 307 6844
Mobile: 021 271 4960

Richard Jolly
Chief Financial Officer
Hellaby Holdings Limited
Phone: 09 307 6844
Mobile: 0274 976 710

About Hellaby Holdings: www.hellabyholdings.co.nz

Hellaby Holdings ('Hellaby') is an NZX-listed investment holding company,
which owns a diversified portfolio of New Zealand and Australian industrial,
distribution and retail businesses.

Our vision is to be a leading Australasian investor, based on the value we
add to our portfolio, the returns we deliver to our shareholders and the
calibre of our people. Hellaby will generate attractive long-term shareholder
value through a combination of performance improvement and organic growth in
the businesses we own, and through smart acquisitions and divestments. We
describe this strategy simply as 'Buy, Build, Harvest'. We seek to generate
total shareholder returns superior to the NZX50 Gross Index.

We have a variable investment horizon, and our portfolio will evolve over
time. We actively manage our investments through a lean corporate office, and
decentralise leadership and performance accountabilities to our companies.
End CA:00233115 For:HBY    Type:HALFYR     Time:2013-02-19 14:06:21