Scoop has an Ethical Paywall
Work smarter with a Pro licence Learn More

Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Hellaby Holdings announces divestment of assets

Hellaby Holdings Limited announces divestment of assets

30 June 2008

Hellaby Holdings Limited today announced that an agreement has been signed to sell its BBQ Factory business and assets to a consortium led by Capital Group Limited, an Auckland-based private equity company. The transaction is effective 30 June 2008.

“We are very pleased to announce this divestment,” Hellaby Chief Executive Officer John Williamson says. “We have worked very hard to make BBQ Factory saleable.” Mr Williamson said the costs incurred in downsizing BBQ Factory would impact on Hellaby’s 2008 financial year trading results.

“Hellaby’s earnings before interest, tax, depreciation and amortisation (EBITDA) for the year ending 30 June is now more likely to be around $40 million, rather than around $45 million as previously indicated. Hellaby will also incur a transactional loss on the BBQ Factory divestment of around $10.0 million before tax.

“However, no further costs will be carried forward to the next financial year, and we believe this divestment will improve Hellaby’s EBITDA by $5-7 million per year on a normalised basis.”

The Capital Group consortium includes two of BBQ Factory’s senior managers. Due to the circumstances of the transaction Hellaby has been granted an NZX waiver from its related party provisions.

Mr Williamson says the company has withdrawn its claim against the parties associated with the original acquisition of BBQ Factory. “We are happy to put this chapter of Hellaby’s history behind us as we head into the new financial year,” Mr Williamson says.

Advertisement - scroll to continue reading

Are you getting our free newsletter?

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.

“Our businesses have generally been performing very well including, in particular, our subsidiaries in the automotive parts, industrial equipment and packaging divisions, as well as the Hannah’s retail shoe business. They will not only meet or exceed their targets for this year but will also comfortably beat last year’s performance.” No 1 Shoes has been performing below expectation. “As with many retail companies, this business has been feeling the impact of the challenging retail conditions experienced since Christmas. Nonetheless, initiatives are in place to improve performance in the next financial year.”


Mr Williamson says Hellaby’s programme to strengthen its balance sheet is progressing well with a 25% reduction in core bank debt levels in recent months. Neil MacCulloch has today joined Hellaby as Group General Manager Operations. This new senior management role has been created to focus on working capital efficiency, as well as optimisation of the Hellaby investment portfolio including new acquisitions and divestments.

Mr MacCulloch is a former Chief Financial Officer of Metlifecare and Sanford, and has also held senior financial roles at Fletcher Building, Fletcher Energy and Fletcher Challenge. Mr Williamson says balance sheet improvement will be a key initial focus for Mr MacCulloch. “While we have achieved some steady gains in recent months we believe there are still substantial improvements to be made and we are looking forward to having a person of Neil’s calibre to drive this across the group.” Hellaby also advises that two other non-core investments are in the process of being sold for a combined value of $6 million, each with a small transactional gain. The assets being sold are: o Chequer Packaging land and buildings in Christchurch (settled 8 May 2008) o Hellaby Holdings’ 49% shareholding in Bombay Petfoods (conditional sale as at 30 June 2008)

Mr Williamson says proceeds from the divestments will be used to reduce core bank debt . “The initial benefits of our rigorous working capital management programme have already reduced our bank debt levels by 25% to around $90 million, which excludes proceeds from the sale of BBQ Factory and Bombay Petfoods, both of which have deferred settlements.” “With the exit of these non-core assets and the earlier sale of Levana Textiles, Hellaby will be entering the new financial year with a clear portfolio strategy. We now have four distinct divisions made up of robust businesses with leading market positions in their sectors. Our focus in the coming year will be on profitable growth and further rigorous balance sheet improvement”. ENDS Key points: o Divestment of BBQ Factory effective 30 June 2008 o FY 2008 EBITDA likely to be around $40 million o Normalised EBITDA without BBQ Factory will improve by $5-7 million o Most other Hellaby investments performing well o Creation of new Group General Manager Operations position o Divestment of two other non-core investments o Core bank debt reduced by 25% during six months to 30 June 2008 to around $90 million


About Hellaby Holdings Hellaby Holdings is an NZX listed company with investments in businesses across New Zealand and Australia. Hellaby’s investments are divided into four core areas: Automotive Parts, Industrial Equipment, Packaging and Retail Footwear. Hellaby and its subsidiaries employ approximately 2,500 people in New Zealand and Australia. Following the completion of today’s transactions, Hellaby Holdings will comprise the following businesses: Automotive Parts

• Brake and Transmission (importer and distributor of automotive replacement parts) • HCB Technologies (importer and distributor of automotive and industrial batteries) • Diesel Distributors (importer and distributor of diesel engine products)

Industrial Equipment • AB Equipment (one of New Zealand’s largest suppliers of materials handling and construction equipment) • AB Rental (one of New Zealand’s largest forklift rental suppliers) • Eurolift (importer and distributor of specialist materials handling equipment) • TRS Tyre and Wheel (supplier of agricultural and industrial tyres and wheels)

Packaging • Elldex Packaging (supplier of packaging material for retail and industrial sectors) • PPL Packaging (supplier of plastic packaging for food, timber and industrial sectors) • Chequer Packaging (supplier of plastic packaging for meat, dairy, seafood, horticulture, and FMCG sectors)

Retail Footwear • No1 Shoes (New Zealand’s leading specialist discount shoe retailer) • Hannahs (New Zealand’s longest established and largest specialist footwear retailer)

ENDS


© Scoop Media

Advertisement - scroll to continue reading
 
 
 
Business Headlines | Sci-Tech Headlines

 
GenPro: General Practices Begin Issuing Clause 14 Notices

GenPro has been copied into a rising number of Clause 14 notices issued since the NZNO lodged its Primary Practice Pay Equity Claim against General Practice employers in December 2023.More

SPADA: Screen Industry Unites For Streaming Platform Regulation & Intellectual Property Protections

In an unprecedented international collaboration, representatives of screen producing organisations from around the world have released a joint statement.More

 
 
 
 
 
 
 
 
 
 
 
 

Join Our Free Newsletter

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.