Hellaby Holdings Ltd - Annual Meeting - Chairman's Address

HELLABY HOLDINGS LIMITED
ANNUAL MEETING
25 OCTOBER 2012
CHAIRMAN’S ADDRESS

It gives me great pleasure to once again chair this Annual Meeting of Shareholders of Hellaby Holdings Ltd.

That pleasure is based on being able to present to you a company in very good shape having had a most satisfactory year. While John Williamson will give you more details of the Company's financial position, let me state a couple of very special facts:

• Profit after tax improved by 26% over 2011

• Gearing or debt to debt and equity is now at a low of 6% (as at 30 June 2012), down from 65% only some five years ago.

These figures are all the more remarkable given the market in which the Company has been operating. The economy continues to run at a very low and static level for businesses such as ours (not being involved in dairy the only active part of the economy) and although we have maintained our market share in all our product ranges (except for packaging) it has not been at levels where increased profitability would be seen. Nevertheless there have been superb turnaround performances in Equipment and Footwear as a result of hard work and dedication by their respective management teams.

Your Board and Management are now looking to the future and believe that in a reasonably short time we should be announcing acquisitions which will add value to the existing Company, thereby generating increased revenue and profit.

On Dividends we continue to maintain the Company's stated dividend policy of paying 50% of NPAT over the period, so as to ensure that we can invest in new and addon businesses.

Last year I went in to some considerable detail on the Long Term Investment plan (LTI) for the senior management team. The current plan concludes next month and Total Shareholder Return (TSR) looks likely to reach the upper target set at the scheme's commencement a considerable achievement when viewed from three years ago. Given John Williamson's commitment to remain as CEO until at least the end of calendar 2015, your Board has agreed to put in place a further three year LTI plan similar to that just concluded, with the starting TSR value being the settlement value of Scheme 1. I would like to stress again that the scheme is designed as a way to reward Hellaby's small management team should they achieve significant value creation for the full shareholder base.

You will be aware of Mark Cowsill's appointment to the Board. Mark is up for election at this meeting and you will have the opportunity to hear from him prior to the resolution proposing his election. Mark brings those elements that we have indicated we would like to see in a new director, including someone having had a recent CEO role and an individual with TransTasman experience.

His appointment also commences an ongoing succession plan for the Board.

Last year you agreed to increase the available pool of directors' fees to enable the Board to appoint an additional director, and to allow the current fees paid to directors to be adjusted on a biannual basis. This year, having taken advice as to fees paid to comparable companies, an increase in fees to a fair and reasonable level was considered, given the current rates and the Company's position.

Director's fees have therefore been increased effective 1 July 2012 from $52,500 to $60,000, and the Chairman's fee from $84,000 to $100,000.

A sad but notable milestone in the Company's history was the death of a long time supportive and major shareholder Hugh Green. I should like to pay a special tribute today to Hugh and his company for his support for Hellaby Holdings over so many years, without which in the turbulent days following the late 1980's debacle, the Company may not have survived. Castle Investments, Hugh's family company, remains a substantial shareholder in Hellaby. Members of the family are with us today.

Finally I wish to pay tribute to John Williamson and his extremely hard working team. The results speak for themselves. We now await the next phase in the Company's life with some excitement.

My thanks go too to a very keen and supportive Board. Every member brings enthusiasm, knowledge, and considerable dedication to the Board table.

ENDS

Presentation__Annual_Meeting__25_October_2012_pdf.pdf

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