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Hellaby forecasts 35% gain in annual profit; shares fall

Hellaby forecasts 35% gain in full-year profit as four out of five units perform

By Jonathan Underhill

May. 26 (BusinessDesk) - Hellaby Holdings, whose interests range from footwear to oil and gas services, said full-year profit may rise 35 percent on improved performance of four of its five divisions, although footwear continues to lag behind and Contract Resources undershot its forecast. The shares fell.

Profit is expected to be about $25 million in the year ending June 30, from $18.2 million a year earlier, the Auckland-based company said in a statement. Earnings before interest, tax, depreciation and amortisation would be 43 percent higher at $54 million.

Hellaby shares fell 3.1 percent to $2.83 after the diversified investor said Contract Resources, the specialised engineering maintenance and industrial cleaning company acquired in March last year, was performing below initial forecast after it made up for the deferral of some contract in Australia and the Middle East with lower-margin work, having spent more in anticipation of the increased work. Full-year Ebitda for that business will be a lower-than-expected $15 million, before rising to $20 million in 2015, it said.

"This variation in profitability is primarily a project timing issue, and is characteristic of contracting companies," managing director John Williamson said.

Strong growth was expected for Hellaby's full-year profit after it posted a 60 percent jump in first-half profit, driven by the contribution from recent acquisitions. The first half included a full six months contribution from its 85-percent stake in Contract and three months from Federal Batteries which it acquired in September. Last month, the company said it expected to add some $20 million in annual sales and $2.5 million in Ebitda from the acquisition of New Zealand Trucks South Island and Dasko Marketing NZ.

The footwear business has forecast full-year Ebitda of about $6 million, down from $9.1 million a year earlier, which reflected "tough" trading conditions, the company said. Its automotive, equipment and packaging divisions were "performing solidly and are forecasting earnings in line with or ahead of last year," Hellaby said, without giving details.


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