Aust buys vital for Hellaby profit lift
Trans-Tasman acquisitions are vital to lift profits, Hellaby Holdings says as a flat economy cuts into its first quarter performance.
In August, the listed diversified investment group reported a 26% rise in profit to $19.3 million, in the year ended June 30.
At today's annual shareholders' meeting in Auckland, managing director John Williamson says first quarter group operating profits are behind target and lag last year's figures.
He says earnings will be relatively flat until the group can make acquisitions, including in its current sectors of footwear, equipment, automotive and packaging.
The company's medium-term focus has turned offshore, Mr Williamson says.
"We expect that up to one third of our revenues and assets may be in Australia and beyond by 2015. Today only 5% of our revenues are offshore."
Pipeline of potential
Mr Williamson says the company has looked closely at acquiring 15 or 20 businesses in the last year and there is a "pipeline of potential businesses" it is considering.
"While no acquisitions have yet been completed, we remain patient and confident that the rigour we apply to due diligence will pay off."
He told NBR ONLINE there should be one or more acquisitions in the next year.
"Less than half" of the businesses it has already considered have been in Australia, he says.
Hellaby 100%-owns its subsidiaries, but he says the company will consider part-owning some with other partners.
Hellaby directors' fees increased in July from $52,500 to $60,000, and the chairman's fee from $84,000 to $100,000.
Chairman John Maasland says this was done after taking advice about fees paid to comparable companies.
Mr Maasland, who was re-elected to the board at today's meeting, says he will stand down in two years.
In operational matters, Hellaby has recently amalgamated two of its heavy equipment businesses, AB Equipment and Euro Lift, and is undertaking a leadership development programme for managers.
Hellaby shares (NZX: HBY) were down almost 1% by 3pm to $3.23, after starting the year at $2.40.