HBY
01/12/2015 08:35
FORECAST
PRICE SENSITIVE
REL: 0835 HRS Hellaby Holdings Limited
FORECAST: HBY: Hellaby FY16 half year guidance and strategic update
Hellaby Holdings Limited - NZX / Media Release 1 December 2015
FY16 half year guidance and strategic update
Hellaby Holdings Limited (NZX:HBY) advises that trading for the Financial
Year 2016 (FY16) half year ending 31 December 2015 is expected to reflect the
effect of variable economic and market conditions across all its major
markets. Trading for the full FY16 year is expected to be in line with the
previous FY15 year and the interim dividend is expected to be held at 9.0
cents per share in line with the previous financial year's interim dividend.
The board has also considered newly appointed Managing Director Alan Clarke's
view of the strategic direction of Hellaby after his first month in the role
and is providing an update accordingly.
FY16 half year result:
A review of expected results for the 6 months to 31 December 2015 indicates
earnings are likely to be well below those for the comparative period in the
previous financial year. At the Annual Shareholders Meeting in early October
Hellaby told shareholders that Group earnings will be heavily weighted in
this financial year to the second half and the board continues to hold that
view.
While the overall New Zealand economy is growing, the farming/agriculture
market is depressed to flat and Australian economic conditions and confidence
remains depressed. The USA has also been variable, especially in the oil and
gas segment, and major middle-east economies and refineries have been
affected by the variability in oil and gas pricing. This volatility is
expected to continue for the remainder of this financial year.
Trading earnings before interest, tax, depreciation and amortisation (Trading
EBITDA) is expected to be between $16.5 and $20.5 million for the six months
ended 31 December 2015 verses $28.7 million for the same period in the
previous financial year.
Trading EBITDA for the full FY16 financial year is expected to be broadly in
line with the FY15 full year result of $59.1 million.
At a sector level earnings growth in the Automotive Division will see an
improved result for the first half of FY16 over the same period in the last
financial year.
The Oil and Gas Services Division which saw strong trading and earnings,
through several large contracts in the first half of the previous financial
year, will be well down in the current FY16 first half, following delayed
starts to several large contracts, which are now scheduled for the second
half of the FY16 financial year. As a consequence the division's sales for
the first half will be well down.
The Equipment Division has also seen a reduced level of sales in the first
half of the current FY16 financial year against the same period last year as
a result of a marked slowing in overall capital equipment spend along with a
drop in business confidence in New Zealand's agriculture and farming sector.
Finally, the Footwear Division has seen a steady decrease in trading at
Number 1 Shoes and as a consequence the FY16 first half is expected to be
down on the previous year.
At a Hellaby Group level, performance in the second half of FY16 is expected
to show significant growth over the FY15 corresponding period. The Oil and
Gas Services Group is expected to benefit from the delayed first half
contracts and planned refinery shutdowns. The Equipment Group will realise
earnings benefits from several new business initiatives in the construction
sector together with the ongoing benefit from the Automotive Division with a
full period contribution from the Australian-based JAS Oceania investment.
Hellaby strategic direction:
Mr Clarke commented "My first month in Hellaby has confirmed my view that the
company has a strong and attractive future as a focused business owner of
scalable innovative technology service businesses to industrial and
commercial clients.
In recent years the board and management has focussed the Hellaby portfolio
into three core areas: an Automotive Division; an Equipment Division and an
Oil & Gas Services Division. Each of these Divisions is defined by three
factors:
o Markets that are specialised, international, scalable, and large;
o A business footprint in which they are market leaders; and
o Management teams and staff who are respected technical specialists whose
expertise is recognised and valued by their clients.
In my first month of getting to know the Hellaby business I'm impressed with
what I've seen. There is an opportunity for targeted expansion in our key
markets funded by the recycling of capital from the rationalisation of some
assets. I would describe it as incremental rather than fundamental change. In
addition, an exposure to lumpy earnings in some parts of the business
requires a resetting to drive a stronger base of more stable, repeatable and
predictable earnings."
Results for the first half of the FY16 year are expected to be released on 18
February 2016. A further update on Hellaby's strategic direction will be
provided at that time.
ENDS
For further information please contact
Alan Clarke
Managing Director & Chief Executive Officer
T +64 9 306 7406
M +64 21 368 818
E [email protected]
Richard Jolly
Chief Financial Officer
T +64 9 307 6844
M +64 27 497 6710
E [email protected]
www.hellabyholdings.co.nz
Hellaby at a glance
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:00274400 For:HBY Type:FORECAST Time:2015-12-01 08:35:22
