Hellaby focusing on acquisitions
Hellaby Holdings says its earnings will be flat until it buys other businesses, which it expects to do quite soon.
The investment holdings company - which has Hannahs and Number One Shoes in its stable as well as industrial equipment, automotive and packaging divisions - reported in August a 26 per cent boost in net profit to $19.3 million for the year to June 30.
But chief executive John Williamson told shareholders at today's annual general meeting that while it would keep pushing its existing portfolio hard, continued meaningful profit growth would not occur without higher gross domestic product growth and/or acquisitions.
The company was "justifiably proud" of achieving operating profit growth of 66 per cent over the past three years on revenue growth of just 4 per cent.
But the economy remained "stubbornly flat" in the sectors Hellaby operated in.
"We are possibly only four years into what may be a six to seven year period of anaemic economic growth."
Group operating profits for the first quarter of this financial year were behind target and last year, he said, although the quarter was traditionally the slowest.
Williamson said although Hellaby had not yet made an acquisition, it had developed its due diligence and decision making capabilities and built a strong pipeline of prospects.
The company was looking in New Zealand and Australia across different sectors including new sectors, and was open to co-investing with like-minded partners, he said.
It expected to make one or more acquisitions by next June.
"Our medium term focus has now turned offshore, to achieve greater scale, growth and market diversification. We expect that up to one third of our revenues and assets may be in Australia and beyond by 2015. Today only five per cent of our revenues are offshore."
Chairman John Maasland told shareholders that directors' fees had increased - within the limits of the fee pool - from $52,500 to $60,000 to reflect fees for directors in comparable companies.
His own fee was increased from $84,000 to $100,000. Shareholders voted to increase the fee pool last year.
Shareholders Association chairman John Hawkins said shareholders appeared to be pretty happy with the company and it had no issues with the fee increases.
"That is closely in line with the returns shareholders have got and we're quite happy with that."
Williamson said total shareholder returns, including dividends and share price gains, for the year ending June were 29 per cent - ahead of the NZX50 Gross Index which fell by one per cent over the same period.
Hellaby shares were trading at $3.20 this afternoon, down by almost two per cent over the day.
- © Fairfax NZ News