KEY POINTS:
Shares in investment company Hellaby Holdings have fallen 14 per cent in early trade today after the company warned about the possible impact on its result of the economic downturn.
When the sharemarket opened, Hellaby shares were down 20c to a year-low $1.25, having been up to $2.56 12 months earlier.
The company said that without a significant improvement in economic conditions during the first half of 2009, its group trading surplus before interest, tax, depreciation, amortisation and before one-off transactions could be between $30-36 million for the year to the end of June 2009.
That compared to $40.6m in the previous financial year, including results from the discontinued operations of BBQ Factory.
Correspondingly, Hellaby group after tax profit may be within a range of $8-11m for the year.
That compares to $4.7m the previous year, which included the results of the BBQ Factory divestment.
In the previous financial year, Hellaby sold the BBQ Factory, which incurred a trading loss before interest and tax of $7.1m for the year, and also incurred a writedown of $12.6m before tax.
Hellaby managing director John Williamson today said the group's performance in the five months year-to-date had been affected by the worsening economy across each of its four divisions - automotive, equipment, packaging and footwear retail.
Revenues in the automotive parts and packaging divisions had a slow start to the financial year due to lower demand, said Williamson.
Although same-store footwear sales through Hannahs and No 1 Shoes were about 2 per cent ahead of the same period last year for the five months year-to-date, overall margins had been lower due to increased competition.
Results from the equipment division, which supplies the construction and materials handling sectors, were expected to be behind those for last year reflecting a 20 per cent lower demand for new equipment.
Hellaby would continue to streamline the performance and balance sheet productivity of its subsidiaries during 2009, said Williamson.
The company was still targeting bank debt to be below $70m by the end of next June, compared to $85.5m at the previous year end.
"Our key focus across the group remains on cashflow and return on investment, and we are expecting our working capital initiatives to deliver further improvements during the second half year," Williamson said.
"We will also continue to tighten financial disciplines and management processes irrespective of economic conditions, in order to take advantage of future growth opportunities when the economy improves."
- NZPA
