Hellaby Holdings profit up but sales revenues slip

Sale of the BBQ Factory chain has helped boost profits at Hellaby Holdings. Photo / Rotorua Daily Post.

Investment company Hellaby Holdings lifted half year net profit to $2.3 million, from $400,000 a year earlier, although sales revenues were down 7.3 per cent to $224.5m.

Reporting the result today, the company said it was resuming its policy of distributing about 50 per cent of net profit as dividend, and would be paying an interim dividend of 3c per share.

Hellaby chairman John Maasland said sales revenues had been affected by a slower than expected economic recovery.

Top-line sales revenue for the equipment division in the six months to December was down 24.4 per cent from a year earlier and footwear sales revenue was down 4.4 per cent.

Group ebitda (trading surplus before interest, tax, depreciation, amortisation, discontinued operations and one-off transactions) was $9.7m, compared to $10.6m a year earlier.

Group ebit (trading surplus before interest, tax, discontinued operations and one-off transactions) was $6m, down from $6.5m.

Managing director John Williamson said that the while overall trading ebit was down, the operating performance of most subsidiaries had improved in recent months.

But AB Equipment and Number 1 Shoes were still undergoing major operational change - with new leadership teams, process and productivity improvement initiatives and an enhanced customer service orientation.

"Effectively, we have redesigned these two businesses and strengthened our management capability over the past year," Mr Williamson said.

Restructuring on that scale took some time to consolidate, but the company now expected to begin benefiting from the turnaround initiatives at AB Equipment and Number 1 Shoes.

"Market demand for heavy capital equipment has been down 50 per cent over the past 18 months, however we are looking forward to a slow but steady improvement in market demand for materials handling equipment and also footwear throughout 2010."

Other Hellaby subsidiaries which had earlier undergone operational improvement initiatives, such as Eurolift, Diesel Distributors and Elldex Packaging, were performing well.

Core bank debt was down to $48m at December 31, compared to $51m at June 30, while total net debt, including capital notes, reduced to $96.9m from $103.4m.

Free cashflow for the period was $9.8m, with a strong contribution from BNT Group.

- NZPA