Ann: HALFYR: HBY: Hellaby Holdings Limited - Inte

• Release Date: 27/02/12 15:51
• Summary: HALFYR: HBY: Hellaby Holdings Limited - Interim Announcement
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HBY
27/02/2012 13:51
HALFYR

REL: 1351 HRS Hellaby Holdings Limited

HALFYR: HBY: Hellaby Holdings Limited - Interim Announcement

HELLABY HOLDINGS LIMITED - NZX / Media Release: 27 February 2012

Profit improvement continues for Hellaby Holdings

Performance highlights for the half year to 31 December 2011

- EBIT up 12% to $12.2 million
- NPAT up 42% to $7.8 million
- Total net debt down 35% to $29.5 million
- 25% return on funds employed
- Significant improvement by Equipment division
- Interim dividend of 5 cents per share, fully imputed

Investment company Hellaby Holdings Limited today announced a further
improvement in earnings as operational and capital restructuring initiatives
of recent years continue to deliver efficiencies.

Despite sluggish economic conditions in the final quarter of 2011, net profit
after tax (NPAT) for the six months ended 31 December 2011 rose 41.9% to
$7.8m, from $5.5m in the prior comparative period (pcp).

Group revenues for the half year period rose 6.2% to $243.2 million from last
year's $229.0 million. Most of the growth was driven by a belated return of
demand to the Equipment sector, which grew sales by 28.9% against the pcp.
Other divisions experienced generally flat sales growth despite relatively
stable market shares.

Trading conditions notwithstanding, group EBITDA (trading surplus before
interest, tax, depreciation, amortisation and before one-off transactions)
and EBIT (trading surplus before interest, tax and one-off transactions)
again grew at a greater rate than group revenue, as subsidiaries continued to
lock in operational efficiencies. Group trading EBITDA was $15.8 million,
8.1% higher than the pcp; and group trading EBIT was $12.2 million, up 11.6 %
on the pcp.

Hellaby cut total net debt (interest-bearing including core bank debt) by
34.8% to $29.5 million at 31 December 2011, reflecting higher profits and
reduced capital expenditure. Group gearing (total net debt to total net debt
plus equity) at 31 December 2011 fell to 17.1% (compared to 26.3% for the
pcp).

Hellaby's return on funds employed (EBIT as a percentage of average working
capital plus fixed assets) for the rolling 12 month period was 25.2% compared
to 21.6% for the pcp - comfortably exceeding the group target of 20%.

Earnings per share for the period rose 19.3% to 10.5 cents from 8.8c per
share for the pcp. Net asset backing at 31 December 2011 was $1.92 per share
($1.72 per share for pcp) and net tangible asset backing was $1.16 per share
($0.95 per share for pcp).

Chairman John Maasland said the result reflected a clear focus on performance
and financial discipline across the group.  "Some of our businesses are still
operating in very tough markets and the board believes these are creditable
financial results for the company."

Dividend:

Mr Maasland said the board had declared an interim dividend of 5 cents per
share, fully imputed, (compared to 4 cents for the pcp).  The dividend will
be paid on Friday 20 April 2012. The record date for determination of
entitlements to the dividend is 13 April 2012.

Operational Performance:

Chief Executive John Williamson said that the standout performance for the
half year came from the Equipment division where an increased focus on
aftermarket services was now being rewarded in addition to a much-improved
demand for capital equipment.

"While progress is currently being measured against a relatively low base,
we're confident momentum will continue building over the second half," he
said.

Mr Williamson also noted the gradual return of on-farm capital expenditure in
the rural sector where TRS Tyre & Wheel performed strongly against the pcp.

Mr Williamson said the Automotive, Packaging and Footwear divisions generally
experienced soft market conditions, particularly in the second quarter, as
consumers chose to defer discretionary spending.

"However this has not deterred subsidiaries from reaping the benefits from
operational efficiencies introduced in recent years and meeting profit
targets.  Footwear, for example, improved its EBIT by 22.0% against last year
despite slightly lower revenues.  This is an outstanding achievement."

The Packaging division returned a disappointing result with revenues slightly
down but a significant drop in EBIT.   Mr Williamson said that profitability
was affected by one-off costs in relation to the closure of Elldex
Packaging's Wellington plant and the consolidation of all manufacturing to
the larger Christchurch plant. Recent investment in business development
expertise in New Zealand and Australia further impacted overheads.  "While
the benefits from these strategic initiatives will not be felt immediately,
we remain committed to growth and expect to start seeing improved operating
efficiency and revenue improvement during the 2012 calendar year," he said.

Acquisitions and disposals:

While there were no acquisitions or disposals for the half year period to
December 2011, the group continued to actively assess many acquisition
opportunities. All opportunities are evaluated according to the return on
investment and valuation criteria identified in the company's strategic
framework. Hellaby's investment approach will be patient and selective.

Outlook:

Looking ahead, Mr Williamson said that Hellaby has now established an
effective performance culture of 'doing more with less' and would continue to
focus on improving earnings and building strong market positions through
customer knowledge and service.

"In addition, the upside of a weak economy is that value accretive
acquisition and investment opportunities are more likely to occur.  We intend
to ignore the state of the economy and get on with reshaping our portfolio
with a mix of assets which we believe will create superior growth in
shareholder value."

ends

For further information please contact:

John Williamson
Managing Director
Hellaby Holdings Limited
Phone: 09 307 6844
Mobile: 021 271 4960

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

About Hellaby Holdings:

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. We structure our investment portfolio
through four divisions - Automotive, Equipment, Packaging and Footwear.

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 small, lean corporate
office, and decentralise leadership and performance accountabilities to our
companies.
End CA:00220056 For:HBY    Type:HALFYR     Time:2012-02-27 13:51:24