Hellaby's close to first deal

Investment company Hellaby Holdings says it is close to making the first in a series of highly anticipated acquisitions - but it won't be a big one.

The company, which delivered a steady $23 million profit yesterday, has up to $80 million to spend on "asset re-alignment" after selling its stakes in clothing store Rodd & Gunn, scouring company Wool Services and raising $55 million with a capital notes issue.

Managing director David Houldsworth said the company was doing due diligence on two businesses and expected to have one purchase finalised by the end of the month.

It was too soon to be specific but the purchase was not huge and of a similar magnitude to Rodd & Gunn.

Hellaby sold its 82 per cent stake in the menswear store for about $13 million.

The new acquisition would "sort of" replace Rodd & Gunn but was in the automotive and industrial section where Hellaby was now trying to focus its investment.

The company was investigating several other options but so far had not found anything that met its criteria.

Houldsworth said it was a case of "slowly, slowly".

Hellaby owns a diverse mix of assets including shoe retailers Hannahs and No 1 Shoe Warehouse, the BBQ Factory and several industrial and automotive parts businesses.

The net profit for the year was roughly in line with the previous year, but Houldsworth emphasised that there had been an 11 per cent increase in trading profit before interest, tax, depreciation, amortisation and one-off transactions.

The trading surplus was the result of solid growth in several divisions.

Within the automotive division, the brake & transmission business had increased sales despite difficult market conditions and profitability had improved at Diesel Distributors after the establishment of an Australian operation.

The retail division had also increased profits on the back of a strong performance by No 1 Shoe Warehouse and Rodd & Gunn (sold with effect from June 30, 2006).

That had been offset by a reduction in profit at Hannahs and a "disappointing result" from the BBQ Factory.

The diversified companies division and the industrial division also increased their contributions.

The result included $10.2 million in gains from the asset sales (including four properties).

Hellaby Holdings

Year to June 30 20062005

Total revenue:$503m$392m

Profit before tax:$33m$29m

Net profit:$23.13m$23.19m

Final dividend: 16cps