Daily ShareChat: Hellaby Holdings

Despite Hellaby Holdings' "excellent progress" in cutting its debt, trading conditions across all four of its divisions remain challenging, says John Cairns at Forsyth Barr.

"Hellaby remains firmly focused on free cash flow generation," Cairns says.

His forecast $30.5 million operating profit for 2010, a 20% increase on his 25.4 million forecast for the year ended June 30 this year, assumes the equipment business will recover from a $1.4 million loss to a $3.3 million profit. "Construction and material handling equipment demand remains weak," he says. "However, the business has been restructured in line with market conditions."

He is expecting the other three divisions, automotive, footwear retailing and packaging, will return relatively flat profits in 2010, although the risks are to the upside over the latter part of the 2010 financial year.

In late June, Hellaby said it had cut core bank debts to $51 million at June 30. In February it said it wanted to get core debt down to $70 million or less. Hellaby also said it had renegotiated its banking facilities with Westpac through to July 31, 2011.

Cairns says further gains are targeted for 2010. "All businesses are now required to target a minimum 20% return on funds employed which is having a fundamental shift in the management of both debtors and inventories."

BROKER CALL:  Forsyth Barr rate Hellaby Holdings as accumulate (from hold).

Comments from our readers

No comments yet

Add your comment:

Your name:
Your email:	Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Anti-spam verification:

Type the text you see in the image into the field below. You are asked to do this in order to verify that this enquiry is not being performed by an automated process.

Related News:

Hellaby buys Sydney-based Ryde Batteries for about A$12 mln to boost largest unit
Hellaby FY profit falls 5.8 percent , meets guidance; Contract helps lift sales
Hellaby shares fall 2.7 percent after halt for $40M placement lifted
Hellaby halts shares for $50M capital raising at 10 percent discount
Hellaby first-half profit falls 21 percent on weaker shoe sales, corporate costs
Hellaby finally finds acquisition in Contract Resources
Hellaby lifts FY profit 26 percent on equipment, automotive divisions
Former Frucor head Mark Cowsill named to Hellaby board
Hellaby Holdings
Hellaby lifts 1H net profit 42%