Hellaby Holdings Limited announces divestment of assets
30 June 2008
Hellaby Holdings Limited today announced that an agreement has been signed to sell its BBQ Factory business and assets
to a consortium led by Capital Group Limited, an Auckland-based private equity company. The transaction is effective 30
June 2008.
“We are very pleased to announce this divestment,” Hellaby Chief Executive Officer John Williamson says. “We have
worked very hard to make BBQ Factory saleable.” Mr Williamson said the costs incurred in downsizing BBQ Factory would
impact on Hellaby’s 2008 financial year trading results.
“Hellaby’s earnings before interest, tax, depreciation and amortisation (EBITDA) for the year ending 30 June is now
more likely to be around $40 million, rather than around $45 million as previously indicated. Hellaby will also incur a
transactional loss on the BBQ Factory divestment of around $10.0 million before tax.
“However, no further costs will be carried forward to the next financial year, and we believe this divestment will
improve Hellaby’s EBITDA by $5-7 million per year on a normalised basis.”
The Capital Group consortium includes two of BBQ Factory’s senior managers. Due to the circumstances of the transaction
Hellaby has been granted an NZX waiver from its related party provisions.
Mr Williamson says the company has withdrawn its claim against the parties associated with the original acquisition of
BBQ Factory. “We are happy to put this chapter of Hellaby’s history behind us as we head into the new financial year,”
Mr Williamson says.
“Our businesses have generally been performing very well including, in particular, our subsidiaries in the automotive
parts, industrial equipment and packaging divisions, as well as the Hannah’s retail shoe business. They will not only
meet or exceed their targets for this year but will also comfortably beat last year’s performance.” No 1 Shoes has been
performing below expectation. “As with many retail companies, this business has been feeling the impact of the
challenging retail conditions experienced since Christmas. Nonetheless, initiatives are in place to improve performance
in the next financial year.”
Mr Williamson says Hellaby’s programme to strengthen its balance sheet is progressing well with a 25% reduction in core
bank debt levels in recent months. Neil MacCulloch has today joined Hellaby as Group General Manager Operations. This
new senior management role has been created to focus on working capital efficiency, as well as optimisation of the
Hellaby investment portfolio including new acquisitions and divestments.
Mr MacCulloch is a former Chief Financial Officer of Metlifecare and Sanford, and has also held senior financial roles
at Fletcher Building, Fletcher Energy and Fletcher Challenge. Mr Williamson says balance sheet improvement will be a key
initial focus for Mr MacCulloch. “While we have achieved some steady gains in recent months we believe there are still
substantial improvements to be made and we are looking forward to having a person of Neil’s calibre to drive this across
the group.” Hellaby also advises that two other non-core investments are in the process of being sold for a combined
value of $6 million, each with a small transactional gain. The assets being sold are: o Chequer Packaging land and
buildings in Christchurch (settled 8 May 2008) o Hellaby Holdings’ 49% shareholding in Bombay Petfoods (conditional sale
as at 30 June 2008)
Mr Williamson says proceeds from the divestments will be used to reduce core bank debt . “The initial benefits of our
rigorous working capital management programme have already reduced our bank debt levels by 25% to around $90 million,
which excludes proceeds from the sale of BBQ Factory and Bombay Petfoods, both of which have deferred settlements.”
“With the exit of these non-core assets and the earlier sale of Levana Textiles, Hellaby will be entering the new
financial year with a clear portfolio strategy. We now have four distinct divisions made up of robust businesses with
leading market positions in their sectors. Our focus in the coming year will be on profitable growth and further
rigorous balance sheet improvement”. ENDS Key points: o Divestment of BBQ Factory effective 30 June 2008 o FY 2008
EBITDA likely to be around $40 million o Normalised EBITDA without BBQ Factory will improve by $5-7 million o Most other
Hellaby investments performing well o Creation of new Group General Manager Operations position o Divestment of two
other non-core investments o Core bank debt reduced by 25% during six months to 30 June 2008 to around $90 million
About Hellaby Holdings Hellaby Holdings is an NZX listed company with investments in businesses across New Zealand and
Australia. Hellaby’s investments are divided into four core areas: Automotive Parts, Industrial Equipment, Packaging and
Retail Footwear. Hellaby and its subsidiaries employ approximately 2,500 people in New Zealand and Australia. Following
the completion of today’s transactions, Hellaby Holdings will comprise the following businesses: Automotive Parts
• Brake and Transmission (importer and distributor of automotive replacement parts) • HCB Technologies (importer and
distributor of automotive and industrial batteries) • Diesel Distributors (importer and distributor of diesel engine
products)
Industrial Equipment • AB Equipment (one of New Zealand’s largest suppliers of materials handling and construction
equipment) • AB Rental (one of New Zealand’s largest forklift rental suppliers) • Eurolift (importer and distributor of
specialist materials handling equipment) • TRS Tyre and Wheel (supplier of agricultural and industrial tyres and wheels)
Packaging • Elldex Packaging (supplier of packaging material for retail and industrial sectors) • PPL Packaging
(supplier of plastic packaging for food, timber and industrial sectors) • Chequer Packaging (supplier of plastic
packaging for meat, dairy, seafood, horticulture, and FMCG sectors)
Retail Footwear • No1 Shoes (New Zealand’s leading specialist discount shoe retailer) • Hannahs (New Zealand’s longest
established and largest specialist footwear retailer)
ENDS