Hellabys eyeing investment opportunities

Hellaby Holdings managing director John Williamson is looking for investment openings. Photo...
Hellaby Holdings managing director John Williamson is looking for investment openings. Photo supplied.
Hellaby's Holdings is actively seeking investment opportunities after successfully completing its business turnaround and balance sheet reform, managing director John Williamson says.

"Since mid-2007 when this board and management began the reform of Hellaby, our businesses have generated a total of $150 million of free cash flow.

"We believe this outstanding achievement demonstrates the tight financial disciplines and clearly defined strategies we've introduced and continue to operate within."

Hellabys now had capacity to fund growth opportunities within the company's gearing targets, Mr Williamson said.

The investment group yesterday reported a much improved operating profit (earnings before interest, tax, depreciation and amortisation) of $34 million for the year ended June, up nearly 23% on the $27.7 million reported in the previous corresponding period (pcp).

Revenue was up 2.5% at $469 million and the profit after tax of $15.3 million was up 48.5% on the pcp.

Earnings per share rose to 22.6c and the dividend was increased to 10c per share (cps) from 8cps.

Gearing - the net debt to debt plus equity ratio - had fallen to 15.5% from 32.3% last year, 55% in 2009 and nearly 61% in 2008.

Craigs Investment Partners broker Chris Timms said most of the credit for the "superb result" should go to Mr Williamson who had a large stake in the business.

"He has worked on every sector in the business and tried to streamline operations while working flat out on reducing debt."

Two capital raisings had been well supported by shareholders after they saw the group was building cash flow, profit building was under way and debt was being reduced, Mr Timms said.

The capital raising was used to further reduce debt and now Hellabys had the capacity on its balance sheet and operating cash flow to build on bolting on additional businesses to its existing structure.

Mr Williamson said Hellabys had not found an investment target that met all of the group's criteria, but he remained patient and selective.

Hellabys had no intention of acquiring any business simply to demonstrate traction.

Mr Timms also gave Hellabys a "large pat on the back" for the information it provided shareholders yesterday which included a three-page document outlining the structure of the business, each division, what units made up each division and how each of them had performed.

The group also ran a very lean management structure, with just four executives.

"I wish more companies would adopt this openness," he said.

Looking ahead, Mr Williamson the company was very positive about its future.

Hellaby's immediate operational focus was to further improve the profitability of the equipment and footwear businesses and to increase the group's packaging revenue.

The main issue ahead of the group remained the flat economy and its corresponding impact on group sales. However, the group was in good shape to take advantage of opportunities which might come its way, he said.

 

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