Big jump in profit for Hellaby
Investment company Hellaby Holdings has reported a 60 per cent increase in net profit to $9.9 million for the half year to December 31.
Hellaby chairman John Maasland said that the result was bolstered by the recent acquisitions of Contract Resources in April last year and Federal Batteries in September and improved profits in most of its businesses.
"It is the first real demonstration of the value being generated by the group's growth strategy, reflecting both the benefits of portfolio expansion, and also the advantages of diversification across different geographies and sectors," Maasland said.
Contract Resources and Federal Batteries,and a 38 per cent increase in equipment division sales, helped boost group sales by 44 per cent to $351.6m.
The company's operating profit of $23.8m was up 74 per cent.
Shareholders would be paid an interim dividend of 5.5 cents per share on April 11, up from 5.0c a year earlier.
Managing director John Williamson said while there were signs of economic recovery in some areas, trading conditions had remained mixed overall.
"We're seeing growth in areas that are starting to pick up, such as equipment," Williamson said.
"However other sectors remain quite patchy."
Four of the group's five divisions matched or bettered their operating profits for the same period in 2012. Only footwear fell short due to the sluggish retail environment, Williamson said.
Hellaby's return on funds employed of 22.9 per cent was ahead of the group's target of 20 per cent.
Likewise, the return on invested capital of 14.7 per cent was ahead of the company's weighted average cost of capital of 13.5 per cent.
Corporate overheads decreased by 3 per cent compared to the same period last year while group funding costs were $1.8m higher, reflecting the debt-funded acquisitions of Contract Resources and Federal Batteries.
Williamson said the second half should be solid with profitability which was also typically the stronger period for most of the group's subsidiaries.
Williamson reiterated the previous forecast for a full-year operating profit, "ebitda", of at least $20m.
"We are on track to perform to market expectations for the full year to June 30.
"Our businesses will remain focused on operational improvement and organic growth.
"The integration of Contract Resources and Federal Batteries will continue, and we will also be driving acquisition opportunities to further expand and enhance our portfolio," he said.