Ann: GENERAL: HBY: Hellaby Lifts Dividend Pay-out Policy

• Release Date: 01/12/14 11:04
• Summary: GENERAL: HBY: Hellaby Lifts Dividend Pay-out Policy
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					HBY
01/12/2014 11:04
GENERAL
PRICE SENSITIVE
REL: 1104 HRS Hellaby Holdings Limited

GENERAL: HBY: Hellaby Lifts Dividend Pay-out Policy

Move follows capital market feedback.  Acquisition and portfolio strategy
unchanged.

Investment company Hellaby Holdings Limited (Hellaby, NZX:HBY) today
announced it is lifting its dividend pay-out policy to around 75% of net
profit after tax attributable to shareholders of the parent company (NPAT).
The previous policy was to pay out around 50% of NPAT.

The move follows a review of Hellaby's capital management policies, which
considered the company's strong record of free cash flow generation and
feedback from shareholders and advisers that investors are increasingly
looking for yield as well as growth.

Hellaby Chairman Steve Smith said: "The revised dividend policy reflects the
company's confidence in future cash flows as well as ensuring we retain
financial flexibility to support our growth strategy."

"As we noted at the annual shareholders meeting in October, the acquisition
of businesses that meet our investment criteria remains a priority.  With a
very strong balance sheet to fund acquisitions, we believe it is now
appropriate for shareholders to receive a larger proportion of our net
profits each year."

Hellaby Managing Director John Williamson said the company had initiated a
review of its capital management policies because Hellaby's share price
movement was underperforming relative to its earnings growth, analyst
valuations, and when compared to the NZX50.

"Hellaby's share price has remained largely unchanged over the past two years
despite delivering a 44% increase in normalised group NPAT and a 15% increase
in dividends per share in the financial year to June 2014."

"We have a clearly communicated growth strategy, and have recently made four
acquisitions, all of which have enhanced earnings per share", he said.

"Hellaby is committed to improving total shareholder returns, being one of
our key performance indicators.  However, we consider the current share price
is not reflecting the company's strong earnings growth and increased scale
over the past couple of years. We are currently trading at a 12 month
forward price-earnings ratio of around 9 times, well short of the current
NZX50 average of around 17 times."

Mr Williamson said Hellaby's previous policy of paying around 50% of NPAT was
driven by the need to deliver growth initiatives and strengthen the company's
balance sheet. Hellaby's actual dividend over the past two years has been
slightly above the 50% policy, reflecting the company's strong cash flows and
confidence in future performance. In reviewing the dividend policy, the Board
considered that the company remained in a strong position to grow but would
also be able to provide a greater dividend yield.

"We are in excellent financial shape with a gearing ratio (total net debt to
total net debt and total equity) of 23% as at 30 June 2014, well short of our
45% target.  Our Directors expect that the combination of strong earnings
performance and an increased dividend pay-out should progressively lead to a
re-rating of Hellaby's share price."

Hellaby's dividend policy remains subject to business performance, market
conditions and capital requirements for growth. Imputation credits are
attached only when they are available from taxation payments.

The increased dividend policy will apply to the interim dividend to be
announced along with the half year results in February 2015.

Mr Williamson said the Board had also determined that, as signalled in
Hellaby's annual result announcement in August 2014, the company would be
suspending its Dividend Reinvestment Plan.

The company also advises that it may consider the merits of a share buy back
as a further capital management measure. No decision has been made with
regard to a share buy back.

For further information please contact

John Williamson
Managing Director
T +64 9 307 6844
M +64 21 271 4960

Richard Jolly
Chief Financial Officer
T +64 9 307 6844
M +64 27 497 6710
www.hellabyholdings.co.nz

Hellaby at a glance

Hellaby Holdings is an NZX-listed investment holding company, which owns a
diversified portfolio of 15 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's core purpose is to generate long-term shareholder value by building
better businesses. We achieve this through a combination of performance
improvement and organic growth in the businesses we own, as well as smart
acquisitions and divestments. We describe this strategy simply as 'Buy,
Build, Harvest'.

Our investment portfolio is structured through five divisions - Oil & Gas
Services, Automotive, Equipment, Packaging and Footwear - with 3,000 people
across New Zealand, Australia, Middle East and North America. We have a
variable investment horizon, and our portfolio will evolve as opportunities
arise in target investment areas.

We actively manage our investments through a lean corporate office, and
decentralise leadership and performance accountabilities to our companies.

We seek to generate total shareholder returns superior to the NZX50.
End CA:00258323 For:HBY    Type:GENERAL    Time:2014-12-01 11:04:03