By Jenny Ruth
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Wednesday 31st March 2010 |
Text too small? |
While trading conditions for Hellaby Holdings' four business units, they are well-positioned to participate in any economic recovery, says John Cairns, an analyst at Forsyth Barr.
The industrial equipment and footwear divisions continue to face particularly difficult trading conditions. Trading at both No 1 Shoes and Hannahs remains volatile but he expects conditions to stabilise with an improvement in consumer confidence, Cairns says.
The equipment business is becoming decentralised with the scaling back of head office functions. Its key focus is to expand the servicing and parts operations, he says.
However, "we like the defensive qualities of the automotive parts business, supported by an aging car fleet requiring regular maintenance for roadworthy certification," Cairns says.
"The key growth strategy is bolt-on acquisitions and broadening the distribution product range, including truck parts."
The packaging business model is based around supply-chain optimisation, either manufacturing locally or sourcing the product from offshore.
"Over the last two years, Elldex has made considerable progress in diversifying away from retail plastic packaging into packaging for the primary export sector," Cairns says.
"Restructuring initiatives have increased Hellaby's leverage to the recovery. Hellaby is now focused on growth options, both organically and via acquisitions."
BROKER CALL: accumulate.
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