HBY 0.00% $3.57 hellaby holdings limited

Ann: FLLYR: HBY: Hellaby Holdings Annual Result Announcement

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    • Release Date: 27/08/15 12:13
    • Summary: FLLYR: HBY: Hellaby Holdings Annual Result Announcement
    • Price Sensitive: No
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    					HBY
    27/08/2015 12:13
    FLLYR
    PRICE SENSITIVE
    REL: 1213 HRS Hellaby Holdings Limited
    
    FLLYR: HBY: Hellaby Holdings Annual Result Announcement
    
    Hellaby Holdings Limited - NZX / Media Release 27 August 2015
    
    FINANCIAL RESULTS FOR YEAR TO 30 JUNE 2015
    
    HELLABY 2015 EARNINGS REACH A NEW RECORD AND DIVIDEND UP 43%
    
    Increased payout follows recent dividend policy change and reflects strength
    of core Oil & Gas Services, Automotive and Equipment divisions, which
    generate 90% of earnings.
    
    Hellaby Holdings' group performance highlights for the 12 months to 30 June
    2015:
    -  Trading EBITDA up 5.4% to $59.1 million
    -  Group NPAT (normalised[1]) up 5.9% to $28.4 million
    -  Earnings per share (normalised[1]) up 4.4% to 28.6 cents
    -  23.6% return on funds employed
    -  Creation of an Australian auto electrical distribution platform with the
    acquisition of JAS Oceania
    -  Sale of non-core Packaging division
    -  Total dividend for year up 43% to 21.5c cents per share, fully imputed
    
    Investment company Hellaby Holdings Limited (Hellaby, NZX:HBY) today posted
    another record result for the year to 30 June 2015; a year in which the group
    continued to reshape its portfolio and pursue its growth strategy.
    
    Hellaby's key financial measures were all up on last year, with group Trading
    EBITDA[2] of $59.1 million, up 5.4% on the prior year, and Trading EBIT[3] of
    $44.7 million, 4.6% ahead of last year's $42.7 million.
    
    These results included the first full year's earnings from three businesses
    acquired in 2014, but only eleven months' earnings from the Packaging
    division which was sold at the end of May 2015.  Total sales rose 6.3% to
    $779.5 million against last year's $733.5 million.
    
    Group NPAT (net profit after tax) was $28.4 million, 5.9% ahead of last
    year's normalised[1] $26.8 million, and group NPAT attributable to
    shareholders of the parent company was $27.4 million.
    
    Hellaby Chairman Steve Smith said the company had made steady progress in the
    evolution of its portfolio during the year.
    
    "Growth-wise, we have focused on the continued expansion of our core
    divisions, and this is paying off.  Our newer businesses and market ventures,
    while still relatively small, are creating real growth prospects within the
    group, and performing well."
    
    "We were pleased to take the opportunity to divest Packaging which was, in
    its current form, sub-scale and would have required significantly more
    investment for it to meet our divisional scale criteria to justify long-term
    retention.  We can now recycle capital for future acquisitions that are more
    aligned with our portfolio strategy."
    
    Managing Director John Williamson said all key financial performance
    indicators were ahead of group targets.
    
    "Hellaby's trading EBITDA margin[4] was 7.5% against a target of 7.0%, and
    return on funds employed[5] (ROFE) was 23.6% against a group target of 20.0%.
     The return on invested capital[6] (ROIC) was 15.8%, which was higher than
    our pre-tax weighted average cost of capital (WACC) of 12.4%. Our earnings
    per share improved to 28.6 cents against last year's normalised 27.4 cents."
    
    The board has declared a final dividend of 12.5 cents per share, fully
    imputed, taking the total dividend for the year to 21.5 cents per share, 43%
    higher than last year's 15.0 cents per share.  This reflects an improved
    earnings performance and the recent change in dividend payout policy. The
    dividend will be paid on 2 October 2015, with a record date of 25 September
    2015.
    
    Mr Williamson said Hellaby was particularly pleased with the financial
    performance of its Oil & Gas Services, Automotive and Equipment divisions
    with all delivering operating earnings ahead of last year. Within those
    divisions most businesses improved year-on-year.
    
    "While some of our businesses faced tough market conditions, their results
    demonstrate that they are generally outperforming their respective markets."
    
    Oil & Gas Services business Contract Resources continued to expand, albeit
    against a lower global oil price, which resulted in the deferral of some
    plant maintenance and shutdowns in the second half.  Expanded work
    opportunities with Australian and Middle Eastern clients drove a revenue
    increase of 14.5% to $189.1 million, and a 13.2% increase in EBITDA to $18.5
    million. Contract Resources has doubled its sales and earnings over the last
    five years; and Hellaby expects further sales and earnings improvement in
    each of Contract Resources' geographic regions.
    
    The Automotive division performed very solidly, with sales increasing by 8.1%
    to $200.2 million, and EBITDA up by 6.2% to $25.6 million.  BNT and TRS Tyre
    & Wheel both faced market contractions driven respectively by changed warrant
    of fitness regulations and declining on-farm spend.  Despite these adverse
    market conditions, both businesses increased their revenue and maintained
    improved earnings.
    
    The acquisition of JAS Oceania in June 2015 has delivered a scalable
    Australian auto electrical distribution platform, creating synergies and
    leverage for a number of the division's businesses.
    
    Equipment division EBITDA increased by a very creditable 15.8% to $14.0
    million, driven by a combination of 12 months trading and steady growth from
    New Zealand Trucks, which expanded from one to four workshops during the
    year.  This was supported by AB Equipment's aftermarket parts and servicing
    business, which now accounts for one third of its revenue.
    
    Hellaby's Footwear division continued to experience difficult trading
    conditions with tight discretionary spending by customers, competition from
    online sales and a late summer which impacted winter sales.  Revenue declined
    by 3.4% to $140.8 million, and EBITDA was $5.8 million against last year's
    $6.2 million.  Both Hannahs and Number One Shoes are trading profitably with
    Hannahs' current earnings significantly ahead of last year.
    
    The Packaging division had a transitional year as it underwent a major
    transformation from an ageing manufacturing plant to a purpose-built,
    food-grade facility, prior to its divestment in May 2015.  EBITDA was $2.0
    million compared to $3.6 million last year, reflecting an 11 month reporting
    period (pre-sale) and the impact of the transition between manufacturing
    facilities.  Hellaby achieved a $0.5 million transactional gain from the sale
    of this division.
    
    Looking ahead, Mr Williamson said Hellaby's portfolio would continue to
    evolve in line with its investment strategy.
    
    "Having divested Packaging, we are focused on investing in our core divisions
    which currently generate over 90% of our earnings.  We have strong industry
    positions and believe there is very good potential in these sectors.  We will
    continue to drive expansion opportunities, both through acquisition and
    business development.
    
    "The Footwear division is considered to be non-core and we will be seeking to
    divest our two Footwear businesses at an appropriate time."
    
    "We believe Hellaby is very well positioned to go forward. We have a clear
    strategic growth plan which the company is highly capable of delivering.
    Hellaby is financially very strong, and has ample capacity to invest in one
    or two significant businesses, or a number of smaller bolt-on acquisitions to
    enhance our existing businesses. Our recent acquisitions will further assist
    with spreading economic and geographical risk across our businesses. We
    expect to once again achieve higher earnings in the year ahead."
    
    Mr Smith said that the search process for a new group chief executive was
    well advanced, following the announcement in April that John Williamson had
    decided to resign after eight years in the role. The board expects to
    communicate a new appointment before the company's 1 October Annual Meeting.
    
    Footnotes:
    [1]  Comparative FY14 result is normalised for the $26.94 million impact of
    the goodwill impairment in 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 transactions
    [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
    
    Comparisons are to prior financial year ended 30 June 2014.
    
    Please refer to the 2015 Annual Report for terms and definitions.
    Reconciliations of non-GAAP financial measures are included on page 12 of the
    2015 Annual Report.
    
    ENDS
    
    For further information please contact
    
    John Williamson
    Managing Director
    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 four divisions - Oil & Gas
    Services, Automotive, Equipment 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:00269179 For:HBY    Type:FLLYR      Time:2015-08-27 12:13:51
    				
 
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