HBY
29/08/2013 14:47
FLLYR
REL: 1447 HRS Hellaby Holdings Limited
FLLYR: HBY: Hellaby Holdings Annual Result Announcement
HELLABY HOLDINGS LIMITED - NZX / MEDIA RELEASE: 29 August 2013
HELLABY SOUNDLY POSITIONED ON GROWTH TRACK
Hellaby Holdings group performance highlights for the year to 30 June 2013:
- Trading EBITDA up 1% at $37.7 million
- Group NPAT of $18.6 million in line with half-year guidance
- 22.9% return on funds employed
- $29.6 million free cash flow (before tax) generated
- Acquisition of 85% shareholding in Contract Resources
- $50 million capital raised
- Final dividend of 8 cents per share, taking total to 13 cents per share
Investment company Hellaby Holdings Limited (Hellaby) today reported a solid
result for the 12 months to 30 June 2013, with its recent investment in
specialist oil and gas services company Contract Resources bolstering group
EBITDA performance.
Group revenue increased by 9.7% to $545.8 million from $497.8 million, lifted
by a three month contribution from Contract Resources. Group net profit after
tax (NPAT) fell slightly from $19.3 million to $18.6 million meeting guidance
given at the half year.
Trading EBITDA (trading surplus before interest, tax, depreciation,
amortisation and other non-trading transactions) was $37.7 million, up
marginally from $37.4 million last year. Trading EBIT (trading surplus before
interest, tax and other non-trading transactions) was slightly lower at $29.7
million compared to last year's $30.1 million.
Hellaby Chairman John Maasland said: "Contract Resources, in which we
acquired an 85% stake, has made a strong contribution to the group. Its
EBITDA has achieved expectations and has effectively offset expenses relating
to the acquisition. This, combined with a stronger second-half performance
from the rest of the group, has mitigated the effects of a weak first half.
We are very satisfied with the quality of this acquisition and how seamlessly
the Contract Resources team has transitioned into our group."
Mr Maasland said Hellaby would remember the 2013 financial year as a turning
point, in which significant progress was made towards reshaping its
investment portfolio.
"We have long communicated our ambition to have a more balanced portfolio,
spread across different geographies and sectors, providing greater earnings
opportunities and currency diversification through economic cycles.
"The acquisition of Contract Resources signals the starting point for the new
Hellaby. It is a substantial business which is forecast to earn $20 million
EBITDA in the 2014 financial year, compared to $5.4 million EBITDA in the
three months of Hellaby ownership to 30 June 2013. Offshore revenue
represents around 25% of group revenue in 2014, compared to 5% in recent
years."
"Of equal significance was the successful raising of $50 million of new
capital in the latter part of the year. This has not only given us the
flexibility to move quickly on our next acquisition, but also reflects the
confidence of our new institutional investors in Hellaby's growth strategy,"
Mr Maasland said.
The board has declared a final dividend of 8 cents per share, fully imputed,
for the year ended 30 June 2013, payable 18 October 2013. This brings the
total dividend for the year to 13 cents, the same level as last year.
"While the total 2013 year dividend payout at 65% of NPAT attributable to
shareholders of the parent company is in excess of Hellaby's current dividend
policy, it recognises the expected significant improvement in group profits
that will arise from the Contract Resources acquisition in the year to 30
June 2014."
Hellaby's Managing Director John Williamson said that the result continued to
demonstrate the benefits of a diverse portfolio.
He said: "Our divisional performances were mixed, reflecting the varying
economic conditions of the sectors in which we operate. Strongest revenue
growth was in Equipment as we began to see renewed client investment in
capital equipment. The Automotive division performed consistently in a
challenging market, while the results from our Packaging and Footwear
divisions were relatively disappointing.
"However, regardless of continued market challenges, the financial controls
of all our divisions remained disciplined and accordingly free cash flow and
normalised return on funds employed (ROFE) were strong across the group."
Mr Williamson said Hellaby had worked hard to ensure it had the capability
and flexibility to fund its growth ambitions.
At 30 June 2013, total net debt (interest bearing debt including core bank
debt) was $45.4 million, up from $10.1 million a year earlier due to the
Contract Resources acquisition.
Gearing (total net debt to total net debt plus total equity) consequently
grew to 17.8% from 6.3% in 2012. Gearing remained well within the company's
target of 45% or below, ensuring that Hellaby retains the capacity to fund
significant growth opportunities within its gearing policy.
The company's earnings per share were 22.9 cents compared to 25.9 cents last
year. Earnings per share performance were diluted due to the 24% increase in
Hellaby shares on issue following the capital raising. This similarly
affected the return on average shareholder's funds which was 10.3% against
last year's 13.5%. Earnings per share will rise in 2014 with the additional
group profits from the Contract Resources acquisition.
Hellaby's return on funds employed (ROFE) was 22.9% overall, and while this
measure was also impacted by the inclusion of only three months' contribution
from Contract Resources, it was still higher than the group target of 20%.
Mr Williamson noted that three of the four divisions (excluding Oil & Gas
Services) comfortably exceeded a 20% ROFE - with Footwear missing the target,
although it still returned a highly credible 18.4% in a testing year.
Outlook
Looking ahead, Mr Williamson said the company remained focused on delivering
its growth strategy through further acquisitions as well as optimising
existing divisional performance. "We are looking for particular improvement
from Packaging and Footwear, and we expect Contract Resources to deliver to
our forecast of at least $20 million EBITDA in its first full year under
Hellaby ownership."
"We believe the next significant lift in profitability will come from further
acquisitions. We will continue to play the long game as we reshape our
portfolio and remain patiently determined to make the 'right' acquisitions
for Hellaby. We have a solid ongoing pipeline of opportunities under review
and with an exceptionally strong balance sheet, are well positioned for our
next stage of growth."
Note: Reconciliations of non-GAAP financial measures are included on pages
4-5 of the 2013 Annual Report
ENDS
For further information please contact:
John Williamson
Chief Executive Officer
Hellaby Holdings Limited
Phone: +64 9 307 6844
Mobile: +64 21 271 4960
Richard Jolly
Chief Financial Officer
Hellaby Holdings Limited
Phone: +64 9 307 6844
Mobile: +64 27 497 6710
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:00240403 For:HBY Type:FLLYR Time:2013-08-29 14:47:59
