KEY POINTS:
Hellaby Holdings is deciding whether to sell its retail division - which includes Hannahs Shoes, No 1 Shoe Warehouse and The BBQ Factory - in a move that could raise nearly $100 million.
Hellaby chairman Bill Falconer said yesterday the board would be looking at options in two weeks, when managing director David Houldsworth returned from overseas.
The company was concerned about retail division results that contributed to a 52 per cent fall in after-tax profit for the six months to December 31, to $4.49 million.
Industrial operations were also down but Falconer told the Business Herald the retail sector was volatile by nature, "which is something that Hellaby shareholders normally walk away from".
"We've been in retail for a while and we've had a very successful life with them," he said.
"Hellaby shareholders appreciate consistency of performance and that is what we are able to offer with our industrial and automotive division.
"We are going through a process now to help inform us the best way to decide whether or not to sell. Obviously the issue is the interest in any sale and whether we could generate more by selling [the retail businesses] than continuing to run them.
Selling them would raise about $94 million based on a valuation of $4.56 a share by Forsyth Barr. Shares in the company closed unchanged yesterday at $4.
Hellaby has already reduced its exposure to the retail sector, selling clothing chain Rodd & Gunn last year for about $10 million and several other retail assets.
Asked whether moves in the retail sector - such as the current play for ownership of The Warehouse - was a factor in its retail review, Falconer said the retail sector was very competitive.
"All retailers have had a difficult time. If you are deeply ingrained in this sector you take the ups with the down.
"We would normally do that too, but it seemed the appropriate time to have a look to see if we could create better value in a different way."
In its interim report for the six months to December 31, Hellaby Holdings predicted a recovery for the retail operations but said that tax paid profit for the year to June 30 would be down 20 per cent on the previous year.
Forsyth Barr analyst John Cairns issued a note predicting a 60 per cent likelihood Hellaby Holdings would divest its retail assets.
