Hellaby nudges profit higher

By Phil Boeyen, ShareChat Business News Editor

Monday 10th September 2001

Sales revenue at Hellaby Holdings (NZSE: HBY) has soared but its profit improvement for the year ended June has been much less impressive.

The diversified group has reported sales income from its various businesses rose to $375. 61 million for the year compared with $256.58 million previously, but net profit rose just 10% to $12.88 million.

Hellaby says earnings from its automotive and engineering divisions increased significantly but the profit contributions from the groups retailing and wool interests were disappointing.

It says profitability at footwear business Hannahs suffered as a result of lower consumer spending in the early part of the year, reduced margins due to the lower NZ dollar and losses associated with its start up operation in Australia.

"Specialty Brands' profitability was adversely affected by the downturn in the Australian retail sector following the introduction of GST and the Olympics.

"In addition, a major restructuring of the business was undertaken at year end to position the company for future expansion and profitability and this led to significant provisions and write offs."

New Zealand Wool Services International is reported to have achieved good growth in the profitability of its underlying wool trading and scouring activities but its final result was negatively affected by a one-off unrealised foreign exchange loss.

The end of year results includes surplus on sale of two business during the year, Taylors Limited and Patton Refrigeration.

At the end of the year Hellaby acquired a 72% shareholding in start-up life insurance company Club Life but it says this made no contribution to the group's result.

Since balance date the company has sold its swimwear business Expozay, which it says will have a small but positive impact on future profits.

A final dividend of 8 cents per share has been recommended.

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