HBY 0.00% $3.57 hellaby holdings limited

Ann: FLLYR: HBY: Hellaby Annual Result Announcement

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    					HBY
    28/08/2014 13:22
    FLLYR
    
    REL: 1322 HRS Hellaby Holdings Limited
    
    FLLYR: HBY: Hellaby Annual Result Announcement
    
    Hellaby delivers record operating earnings
    
    Hellaby Holdings' group performance highlights for the 12 months to 30 June
    2014:
    
    - Trading EBITDA up 49% to $56.1 million
    - Group NPAT (normalised[1]) up 44% to $26.8 million
    - Earnings per share (normalised[1]) up 20% to 27.4 cents
    - 25.4% return on funds employed
    - Three acquisitions completed
    - Revaluation of Footwear retail businesses
    - Total dividend for year up 15% to 15c cents per share, fully imputed
    
    Investment company Hellaby Holdings Limited (Hellaby, NZX:HBY) today posted a
    record group trading EBITDA[2]  of $56.1 million for the 12 months to 30
    June 2014, up 49% on the prior year, and slightly ahead of recent market
    guidance.
    
    Group revenue rose 35% to $736.4 million against last year's $545.8 million.
    This includes the first full year contribution from oil and gas services
    business Contract Resources and a partial year's results from three recent
    acquisitions. Trading EBIT[3]  was $42.7 million, 44% up on last year's $29.7
    million.  Normalised group NPAT (net profit before tax excluding the impact
    of goodwill impairment)[1] was $26.8 million, 44% ahead of last year's $18.6
    million.  Group NPAT including the goodwill impairment was ($0.1) million.
    
    The goodwill impairment was for the full $26.9 million goodwill in Hannahs
    and Number One Shoes, and was driven by changed market conditions and
    corresponding under-performance over the past two years.  While both retail
    businesses continue to trade profitably, the revised carrying values better
    reflect market conditions and performance.
    
    Managing Director John Williamson said the improved operating result included
    the positive impact of recent acquisitions as well as creditable performances
    by Hellaby's longer-held businesses.  "Four of our five divisions performed
    ahead of last year, and within those divisions most businesses improved
    year-on-year.  The Equipment division had a particularly stellar year."
    
    Mr Williamson said continued focus on profitable market share, operating
    efficiency and tight financial control was demonstrated in Hellaby's strong
    key financial indicators.
    
    "Trading EBITDA margins[4] were up by 10% to 7.6%; our return on funds
    employed[5] (ROFE) was 25.4%, well ahead of the 22.9% recorded last year and
    well above our target of 20%.  Return on invested capital[6] (ROIC) was 15.9%
    against last year's 14.0% and our normalised earnings per share increased by
    20% to reach 27.4 cents per share."
    
    The board has declared a final dividend of 9.5 cents per share, fully
    imputed, taking the total dividend for the year to 15 cents per share, 15%
    higher than last year's 13 cents.  Chairman John Maasland said the final
    dividend had been determined as if no goodwill impairment had occurred.  "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."
    
    The dividend will be paid on 3 October 2014, with a record date of 26
    September 2014.  Mr Maasland said for this final dividend the board has
    retained a 2.5% discount in calculating the Dividend Reinvestment Plan strike
    price, although the company may in future suspend the Plan depending on its
    capital requirements at the time.
    
    Mr Williamson said the three acquisitions made during the year - Federal
    Batteries, Dasko and New Zealand Trucks - were all integrating well and
    performing as expected.  These acquisitions are collectively expected to
    deliver an annualised EBITDA of around $5.5 million.
    
    Contract Resources completed its first full year under Hellaby's 85%
    ownership, generating $16.4 million EBITDA on $165.2 million sales.  Although
    this result was not as high as originally forecast, it was nonetheless 28%
    ahead of the same period last year and higher than recent market guidance.
    Contract Resources is expected to deliver $20 million EBITDA in the financial
    year to 30 June 2015, with further growth coming from Australia and the
    Middle East.
    
    The Automotive division continued to perform solidly, with a 9% increase in
    sales to $185.2 million, and a 12% lift in EBITDA to $24.1 million.  Having
    successfully acquired and integrated two bolt-on businesses during the year,
    the division is continuing to assess growth opportunities on both sides of
    the Tasman, and has also made significant investment in strengthening its
    leadership resources and capability.
    
    The Equipment division not only continued to benefit from a buoyant capital
    equipment sector, but also began reaping the rewards of business improvement
    initiatives implemented over the past two years.  Sales increased by 45% to
    $195.2 million and EBITDA rose by 88% to $12.1 million.  The division
    continues to drive a number of growth strategies including the recent entry
    into heavy transport servicing through the acquisition of New Zealand Trucks
    during the year.
    
    While the Packaging division continued to experience tight market conditions
    and flat sales of $44.8 million, operating efficiencies drove a 12% EBITDA
    increase to $3.6 million.  Mr Williamson said business development remains a
    key focus for Packaging and recent performance improvements were encouraging.
    
    The Footwear division experienced very difficult trading conditions
    throughout the year with tight consumer spending on apparel and footwear,
    competition from online sales and a late start to cold winter weather. Sales
    declined by 6% to $145.7 million, and EBITDA was $6.2 million against last
    year's $9.1 million.
    
    Mr Williamson said Hellaby had actively assessed a number of opportunities
    during the year in addition to the three completed acquisitions.  "We
    invested $0.6 million in business evaluation and due diligence during the
    year, and while some opportunities didn't come to fruition, others are still
    in the pipeline.  With our gearing[7] still at only 23.3%, Hellaby has ample
    capacity to fund significant growth opportunities within its gearing policy."
    
    Looking ahead, Mr Williamson said the company is expecting to see increased
    contributions from its recent acquisitions, solid performances from its
    longer-held subsidiaries, and continued focus on reshaping its portfolio.
    
    "We're in excellent financial shape with a very strong balance sheet to
    support further acquisitions and currently have some interesting
    opportunities in play. We remain committed to improving total shareholder
    return, and are confident that our growth strategy will deliver the higher
    earnings to drive this."
    
    1 'Normalised' refers to the exclusion of the impact of the goodwill
    impairment of the Footwear retail businesses, which was booked effective 30
    June 2014
    2 Trading EBITDA = Net trading surplus before interest, tax, depreciation,
    amortisation and other non-trading transactions
    3 Trading EBIT = Net trading surplus before interest, tax and other
    non-trading transaction
    4 Trading EBITDA margin = Trading EBITDA / total revenue
    5 ROFE or return on funds employed = Trading EBIT as a percentage of average
    working capital plus fixed assets
    6 ROIC or return on invested capital = Trading EBIT as a percentage of
    average working capital plus fixed assets and intangible assets
    7 Gearing = Total net debt to total net debt plus total equity
    
    Comparisons are to prior financial year ended 30 June 2013.
    Please refer to the 2014 Annual Report for terms and definitions.
    Reconciliations of non-GAAP financial measures are included on pages 3 to 7
    of the 2014 Annual Report.
    
    ENDS
    
    For further information please contact:
    
    John Williamson
    Chief Executive Officer
    T +64 9 307 6844
    M +64 21 271 4960
    
    Richard Jolly
    Chief Financial Officer
    T +64 9 307 6844
    M +64 27 497 6710
    
    www.hellabyholdings.co.nz
    
    Hellaby at a glance
    
    Hellaby Holdings is an NZX-listed investment holding company, which owns a
    diversified portfolio of 15 industrial, distribution and retail businesses.
    
    Our vision is to be a leading Australasian investor, based on the value we
    add to our portfolio, the returns we deliver to our shareholders and the
    calibre of our people.
    
    Hellaby's core purpose is to generate long-term shareholder value by building
    better businesses. We achieve this through a combination of performance
    improvement and organic growth in the businesses we own, as well as smart
    acquisitions and divestments. We describe this strategy simply as 'Buy,
    Build, Harvest'.
    
    Our investment portfolio is structured through five divisions - Oil & Gas
    Services, Automotive, Equipment, Packaging and Footwear - with 3,000 people
    across New Zealand, Australia, Middle East and North America. We have a
    variable investment horizon, and our portfolio will evolve as opportunities
    arise in target investment areas.
    
    We actively manage our investments through a lean corporate office, and
    decentralise leadership and performance accountabilities to our companies.
    
    We seek to generate total shareholder returns superior to the NZX50.
    End CA:00254539 For:HBY    Type:FLLYR      Time:2014-08-28 13:22:28
    				
 
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