HBY
19/02/2015 13:26
HALFYR
PRICE SENSITIVE
REL: 1326 HRS Hellaby Holdings Limited
HALFYR: HBY: Hellaby Holdings Ltd - Interim Announcement
Hellaby Holdings Limited - NZX / Media Release 19 February 2015
Hellaby growth propels 36% profit increase
Hellaby Holdings' group performance highlights for the six months to 31
December 2014 (comparisons to previous corresponding period):
- Trading EBITDA up 20% at $28.7 million
- Group NPAT up 36% to $13.5 million
- 23.9% return on funds employed
- Earnings per share up 30% to 13.1 cents
- Interim dividend up 64% to 9.0 cents per share, fully imputed
Investment company Hellaby Holdings Limited (Hellaby) today reported a record
result for the six months to 31 December 2014, with group trading EBITDA(1)of
$28.7 million, up 20% on the same period last year, and NPAT up 36% to $13.5
million.
Hellaby chairman Steve Smith said the board was very pleased with the
company's performance. "Hellaby's strategy to expand through operational
growth and value-accretive acquisitions is continuing to deliver," he said.
"Four of our five divisions reported improved earnings over the same period
last year, while the performance of the fifth - our Packaging division - is
currently being impacted by a major manufacturing relocation project which
nonetheless provides a platform for long-term growth."
"Our balance sheet is in good shape and, with gearing at 28.3%(2), Hellaby
remains well-positioned to fund future growth opportunities."
Mr Smith said Hellaby's shareholders would be rewarded with a significantly
larger interim dividend. "The improved performance, combined with a new
dividend policy, has enabled the board to declare an interim dividend of 9.0
cents per share, 64% higher than last year's 5.5 cents."
Hellaby Managing Director John Williamson said while market conditions had
remained variable, the group's broad exposure across many sectors enabled it
to spread its risk.
"The trading environments of our businesses go up and down, but our
management teams have continued to apply financial discipline and focus on
growth, regardless of conditions. The fact that group trading EBITDA has
increased by 20% against a 10% sales increase is a credit to our businesses."
"We've also become very accomplished at integrating new businesses into the
Hellaby culture, and enabling them to add value to the group from day one. I
believe these factors are key to this result."
Group sales were $386.9 million for the half year period, 10% higher than
last year's $351.6 million. At $28.7 million, group trading EBITDA (trading
surplus before interest, tax, depreciation, amortisation and other
non-trading transactions) was 20% higher than the $23.8 million for the same
period last year.
Group trading EBIT3 (trading surplus before interest, tax and other
non-trading transactions) was $21.6 million, up 26% on last year's $17.2
million. Results included a full six month contribution from Hellaby's most
recent acquisitions - auto electrical parts wholesaler Dasko, and truck
servicing company New Zealand Trucks.
Mr Williamson said the standout division for the half year was Oil & Gas
Services, where Contract Resources' sales and earnings were significantly
higher than the previous corresponding period with improved profitability
across Australia, the USA and the Middle East.
"We've been pleased to see Contract Resources bounce back from the
disappointing finish to last year where a number of maintenance projects were
deferred. In the six month period Contract Resources completed most of these
deferred projects as well as growing into other new markets and sectors. It
has been an outstanding effort."
Mr Williamson said the Automotive Division also contributed substantially to
the group's earnings growth. "Automotive returned a very good result, with
excellent performances from BNT and TRS Tyre & Wheel in challenging market
conditions. Our recently-acquired businesses are adding to the momentum of
the division."
Hellaby's earnings improvement has resulted in a return on funds employed4
(ROFE) of 23.9%, well ahead of the group target of 20%. The return on
invested capital5 (ROIC) was 15.8%, also well ahead of Hellaby's weighted
average cost of capital of 13.5%.
Corporate overheads were similar to the same period last year, and group
funding costs were $0.4 million higher, reflecting the debt-funded
acquisitions of Dasko and New Zealand Trucks. The tax expense was $0.5
million higher than the same period last year, reflecting the higher
earnings.
The group NPAT (net profit after tax) of $13.5 million was 36% higher than
the $9.9 million achieved for the corresponding period last year. Group NPAT
attributable to shareholders of the parent company was $12.5 million.
The record date for the fully imputed interim dividend of 9.0 cents per share
is 25 March 2015, with payment to be made on 1 April 2015. As previously
advised, Hellaby's directors have suspended the company's Dividend
Reinvestment Plan.
Outlook:
Hellaby's board believes market conditions will remain variable for the rest
of the financial year, nonetheless it expects that group earnings for the
full year will exceed last year.
"Our portfolio of businesses is performing well overall, we're benefiting
from the incremental earnings generated from recent acquisitions, and our
balance sheet is in excellent shape to support future growth opportunities,"
Mr Williamson said.
"The ongoing strengthening and reshaping of our portfolio with businesses
that meet our investment criteria remains a priority. We'll continue to
apply the rigour and discipline needed to ensure every acquisition or
divestment meets our stringent criteria, and will deliver the required
returns to our shareholders."
(1) Trading EBITDA = Net trading surplus before interest, tax, depreciation,
amortisation and other non-trading transactions
(2) Gearing = Total net debt to total net debt plus total equity
(3) Trading EBIT = Net trading surplus before interest, tax and other
non-trading transactions
(4) ROFE or return on funds employed = Trading EBIT as a percentage of
average working capital plus fixed assets
(5) ROIC or return on invested capital = Trading EBIT as a percentage of
average working capital plus fixed assets and intangible assets
Note: Reconciliations of non-GAAP financial measures are included in the 2015
Interim 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 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:00260872 For:HBY Type:HALFYR Time:2015-02-19 13:26:06
