Hellaby sinks into the red on footwear writedown, sweetens dividend
By Paul McBeth
Aug. 28 (BusinessDesk) - Hellaby Holdings, the diversified investment company, sank into the red in the latest financial
year as it wrote down the value of its footwear unit in a flat retail market. Still, it sweetened its dividend as
underlying earnings grow.
The Auckland-based company posted a loss of $1.1 million, or 1.2 cents per share, in the 12 months ended June 30,
compared to a profit of $18.2 million, or 22.9 cents, a year earlier, it said in a statement. Stripping out a $26.8
million charge on the goodwill of its Hannahs and Number One Shoes brands, earnings rose 44 percent to $26.8 million,
ahead of its $25 million guidance given earlier this month and Forsyth Barr's estimate for a profit of $25.2 million.
Revenue grew 35 percent to $736.4 million.
"Four of our five divisions performed ahead of last year, and within those divisions most businesses improved
year-on-year," managing director John Williamson said. "We remain committed to improving total shareholder return, and
are confident that our growth strategy will deliver the higher earnings to drive this."
Hellaby broadened its portfolio over the past 12 months, buying a truck servicing business, an auto electrical, fuel and
engine management components firm and 85 percent of Contract Resources, a specialised engineering maintenance and
industrial cleaning company.
The company anticipates bigger contributions from its new acquisitions, and Williamson said it has more acquisitions in
the pipeline.
The board declared a final dividend of 9.5 cents per share, payable on Oct. 3 with a Sept. 26 record date, taking the
annual payout to 15 cents. That's up from 13 cents a year earlier, and ahead of Forsyth Barr's expectations for a 14.5
cent dividend.
Chairman John Maasland said the board discounted the goodwill impairment in making its decision.
"The board took this decision in recognition of the company's record earnings growth, its strong positive outlook and
because the impairment had no impact on group cash flow," he said.
The Contract Resources acquisition boosted external sales in the oil and gas services segment by about 300 percent to
$165.2 million, and more than doubled operating profit to $9.78 million.
Hellaby's equipment division more than doubled operating profit to $10.56 million on a 45 percent lift in sales to
$194.7 million, while the packaging unit delivered a 12 percent increase in operating profit to $3.02 million on a 0.5
percent gain in external revenue to $44.6 million.
The footwear unit showed a 5.6 percent decline in external sales to $145.7 million, and posted an operating loss of
$23.8 million due to the impairment charge, compared to a profit of $6.08 million a year earlier.
Hellaby generated an operating cash flow of $32.6, up from $24.5 million a year earlier. It had cash and equivalents of
$7.4 million as at June 30, and core bank debt of $64.7 million.
The shares rose 0.4 percent to $2.85, and have dropped 13 percent this year. The stock is rated an average 'buy' based
on four analyst recommendations compiled by Reuters, with a median target price of $3.31.
(BusinessDesk)