The New Zealand market is tough going right now and nothing
on the horizon suggests a dramatic change any time soon,
Hellaby Holdings John Williamson says.
In a shareholder update, Mr Williamson said the company,
which had broad exposure to many New Zealand sectors, could
not simply rely on the economy to drive improving returns to
''The first quarter of the year has been tough and although
we have subsequently seen some improvement, trading remains
However, that did not mean he was gloomy about the prospects
As the investor update showed, Hellaby subsidiaries had
created a wealth of opportunities to deliver incremental
bottom-line improvements, he said.
Number One Shoes continued to grow its profits by improving
its store format, making better use of its floor space,
better management of inventory and extending its range of
merchandise in categories whichcomplemented the core footwear
TRS Tyre & Wheel was strengthening its share of the
agricultural tyre market but was leveraging that expertise to
become a credible distributor of truck tyres, Mr Williamson
Hellaby had recently merged AB Equipment and Eurolift to
create a nationwide group of one-stop sales and service
centres for materials handling and industrial equipment.
''All of our businesses can continue to outpace their markets
by continuing to better understand the demands of their
customers,'' he said.
Craigs Investment Partners broker Chris Timms said Craigs had
made some downgrades to its Hellaby forecasts, which excluded
While Hellaby had a strong balance sheet, the stock was
trading close to target price.
The strong growth achieved in the past three years was
unlikely to be repeated in the 2013 financial year, he said.
Earnings were expected to remain relatively flat.
The company was confident acquisitions would be made in the
year ahead, Mr Timms said.
''Acquisitions will be used strategically to diversify and
create a more balanced portfolio.''
By 2013, Hellaby expected one-third of revenue and assets
might come from Australia and beyond.
The company had a strong balance sheet with 6% gearing. The
focus on existing businesses was on delivering incremental
bottom-line improvement, Mr Timms said.
Hellaby Holdings was positioned to benefit from an uplift in
New Zealand economic activity but Craigs had pulled back its
forecasts by 6% to 8%.
That reflected the company's expectation that sluggish
trading conditions were unlikely to improve soon and
management guidance of a relatively flat earnings profile for
the 2013 financial year in the absence of acquisitions.
Craigs' 12-month target price was $3.26 per share. Hellaby
last traded at $3.20.