Ann: FLLYR: HBY: Hellaby Holdings Annual Result Announcement

• Release Date: 27/08/15 12:13
• Summary: FLLYR: HBY: Hellaby Holdings Annual Result Announcement
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					HBY
27/08/2015 12:13
FLLYR
PRICE SENSITIVE
REL: 1213 HRS Hellaby Holdings Limited

FLLYR: HBY: Hellaby Holdings Annual Result Announcement

Hellaby Holdings Limited - NZX / Media Release 27 August 2015

FINANCIAL RESULTS FOR YEAR TO 30 JUNE 2015

HELLABY 2015 EARNINGS REACH A NEW RECORD AND DIVIDEND UP 43%

Increased payout follows recent dividend policy change and reflects strength
of core Oil & Gas Services, Automotive and Equipment divisions, which
generate 90% of earnings.

Hellaby Holdings' group performance highlights for the 12 months to 30 June
2015:
-  Trading EBITDA up 5.4% to $59.1 million
-  Group NPAT (normalised[1]) up 5.9% to $28.4 million
-  Earnings per share (normalised[1]) up 4.4% to 28.6 cents
-  23.6% return on funds employed
-  Creation of an Australian auto electrical distribution platform with the
acquisition of JAS Oceania
-  Sale of non-core Packaging division
-  Total dividend for year up 43% to 21.5c cents per share, fully imputed

Investment company Hellaby Holdings Limited (Hellaby, NZX:HBY) today posted
another record result for the year to 30 June 2015; a year in which the group
continued to reshape its portfolio and pursue its growth strategy.

Hellaby's key financial measures were all up on last year, with group Trading
EBITDA[2] of $59.1 million, up 5.4% on the prior year, and Trading EBIT[3] of
$44.7 million, 4.6% ahead of last year's $42.7 million.

These results included the first full year's earnings from three businesses
acquired in 2014, but only eleven months' earnings from the Packaging
division which was sold at the end of May 2015.  Total sales rose 6.3% to
$779.5 million against last year's $733.5 million.

Group NPAT (net profit after tax) was $28.4 million, 5.9% ahead of last
year's normalised[1] $26.8 million, and group NPAT attributable to
shareholders of the parent company was $27.4 million.

Hellaby Chairman Steve Smith said the company had made steady progress in the
evolution of its portfolio during the year.

"Growth-wise, we have focused on the continued expansion of our core
divisions, and this is paying off.  Our newer businesses and market ventures,
while still relatively small, are creating real growth prospects within the
group, and performing well."

"We were pleased to take the opportunity to divest Packaging which was, in
its current form, sub-scale and would have required significantly more
investment for it to meet our divisional scale criteria to justify long-term
retention.  We can now recycle capital for future acquisitions that are more
aligned with our portfolio strategy."

Managing Director John Williamson said all key financial performance
indicators were ahead of group targets.

"Hellaby's trading EBITDA margin[4] was 7.5% against a target of 7.0%, and
return on funds employed[5] (ROFE) was 23.6% against a group target of 20.0%.
 The return on invested capital[6] (ROIC) was 15.8%, which was higher than
our pre-tax weighted average cost of capital (WACC) of 12.4%. Our earnings
per share improved to 28.6 cents against last year's normalised 27.4 cents."

The board has declared a final dividend of 12.5 cents per share, fully
imputed, taking the total dividend for the year to 21.5 cents per share, 43%
higher than last year's 15.0 cents per share.  This reflects an improved
earnings performance and the recent change in dividend payout policy. The
dividend will be paid on 2 October 2015, with a record date of 25 September
2015.

Mr Williamson said Hellaby was particularly pleased with the financial
performance of its Oil & Gas Services, Automotive and Equipment divisions
with all delivering operating earnings ahead of last year. Within those
divisions most businesses improved year-on-year.

"While some of our businesses faced tough market conditions, their results
demonstrate that they are generally outperforming their respective markets."

Oil & Gas Services business Contract Resources continued to expand, albeit
against a lower global oil price, which resulted in the deferral of some
plant maintenance and shutdowns in the second half.  Expanded work
opportunities with Australian and Middle Eastern clients drove a revenue
increase of 14.5% to $189.1 million, and a 13.2% increase in EBITDA to $18.5
million. Contract Resources has doubled its sales and earnings over the last
five years; and Hellaby expects further sales and earnings improvement in
each of Contract Resources' geographic regions.

The Automotive division performed very solidly, with sales increasing by 8.1%
to $200.2 million, and EBITDA up by 6.2% to $25.6 million.  BNT and TRS Tyre
& Wheel both faced market contractions driven respectively by changed warrant
of fitness regulations and declining on-farm spend.  Despite these adverse
market conditions, both businesses increased their revenue and maintained
improved earnings.

The acquisition of JAS Oceania in June 2015 has delivered a scalable
Australian auto electrical distribution platform, creating synergies and
leverage for a number of the division's businesses.

Equipment division EBITDA increased by a very creditable 15.8% to $14.0
million, driven by a combination of 12 months trading and steady growth from
New Zealand Trucks, which expanded from one to four workshops during the
year.  This was supported by AB Equipment's aftermarket parts and servicing
business, which now accounts for one third of its revenue.

Hellaby's Footwear division continued to experience difficult trading
conditions with tight discretionary spending by customers, competition from
online sales and a late summer which impacted winter sales.  Revenue declined
by 3.4% to $140.8 million, and EBITDA was $5.8 million against last year's
$6.2 million.  Both Hannahs and Number One Shoes are trading profitably with
Hannahs' current earnings significantly ahead of last year.

The Packaging division had a transitional year as it underwent a major
transformation from an ageing manufacturing plant to a purpose-built,
food-grade facility, prior to its divestment in May 2015.  EBITDA was $2.0
million compared to $3.6 million last year, reflecting an 11 month reporting
period (pre-sale) and the impact of the transition between manufacturing
facilities.  Hellaby achieved a $0.5 million transactional gain from the sale
of this division.

Looking ahead, Mr Williamson said Hellaby's portfolio would continue to
evolve in line with its investment strategy.

"Having divested Packaging, we are focused on investing in our core divisions
which currently generate over 90% of our earnings.  We have strong industry
positions and believe there is very good potential in these sectors.  We will
continue to drive expansion opportunities, both through acquisition and
business development.

"The Footwear division is considered to be non-core and we will be seeking to
divest our two Footwear businesses at an appropriate time."

"We believe Hellaby is very well positioned to go forward. We have a clear
strategic growth plan which the company is highly capable of delivering.
Hellaby is financially very strong, and has ample capacity to invest in one
or two significant businesses, or a number of smaller bolt-on acquisitions to
enhance our existing businesses. Our recent acquisitions will further assist
with spreading economic and geographical risk across our businesses. We
expect to once again achieve higher earnings in the year ahead."

Mr Smith said that the search process for a new group chief executive was
well advanced, following the announcement in April that John Williamson had
decided to resign after eight years in the role. The board expects to
communicate a new appointment before the company's 1 October Annual Meeting.

Footnotes:
[1]  Comparative FY14 result is normalised for the $26.94 million impact of
the goodwill impairment in the Footwear retail businesses, which was booked
effective 30 June 2014.
[2]  Trading EBITDA = Net trading surplus before interest, tax, depreciation,
amortisation and other non-trading transactions
[3]  Trading EBIT = Net trading surplus before interest, tax and other
non-trading transactions
[4]  Trading EBITDA margin = Trading EBITDA / total revenue
[5]  ROFE or return on funds employed = Trading EBIT as a percentage of
average working capital plus fixed assets
[6]  ROIC or return on invested capital = Trading EBIT as a percentage of
average working capital plus fixed assets and intangible assets

Comparisons are to prior financial year ended 30 June 2014.

Please refer to the 2015 Annual Report for terms and definitions.
Reconciliations of non-GAAP financial measures are included on page 12 of the
2015 Annual Report.

ENDS

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 four divisions - Oil & Gas
Services, Automotive, Equipment 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:00269179 For:HBY    Type:FLLYR      Time:2015-08-27 12:13:51