Hellaby first-half profit down 21% on weaker shoe sales, corporate costs

Hellaby Holdings, the diversified investment company, posted a 21 percent drop in first-half profit on weaker earnings from its shoe stores and higher corporate costs, and forecast a decline in annual profit.

Profit fell to $6.2 million in the six months ended December 31, from $7.8 million a year earlier, the Auckland-based company says in a statement. Sales rose 1 percent to $245.6 million.

Profit and sales missed the $9.3 million and $254 million, respectively, that were forecast by Forsyth Barr analyst John Cairns, while the interim dividend was kept at 5 cents, compared with expectations of 6 cents. The shares fell 1.5 percent to $3.21, having gained almost 30 percent in the past 12 months.

Hellaby says full-year profit will fall about 4 percent to $18.5 million, including about $800,000 in one-time transaction and funding costs for the acquisition of Contract Resources, a specialised engineering maintenance and industrial cleaning company.

The $73 million purchase, which is yet to be completed, will be debt funded and start contributing to earnings in 2014, Hellaby has said. Earnings before interest, tax, depreciation and amortisation for Contract Resources in 2014 would be greater than $20 million.

In the first half, trading earnings before interest and tax from its Hannahs and Number 1 Shoes stores fell to $900,000 from $1.7 million as sales fell 5 percent to $74.7 million. EBIT from its autoparts businesses was unchanged at $9.8 million as sales fell 2.3 percent to $85.6 million.

Its AB Equipment and Eurolift units lifted EBIT by a third to $2 million as sales gained 11 percent to $61.5 million. Hellaby's Elldex Packaging Group lifted EBIT to $1.5 million from $1.4 million as sales fell to $23 million from $24.5 million.

The company said footwear earnings were "disappointing" and reflected competitor activity in a flat market, which hurt Hannahs more than Number 1 Shoes. Automotive also faced increased, "price-driven" competition and lower spending by consumers and farmers.

The equipment division benefited from strong demand for directional drilling and forestry equipment while the packaging business was "a work in progress", coping with lower margins from its supermarket customers.

(BusinessDesk)


Got a question about this story? Leave it in Comments & Questions below.

This article is tagged with the following keywords. Find out more about MyNBR Tags

Comments & Questions

Commenter icon key: Subscriber Verified

Post New comment or question

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.

NZ Market Snapshot

Forex

Sym Price Change
USD 0.7060 -0.0024 -0.34%
AUD 0.9532 -0.0009 -0.09%
EUR 0.6414 -0.0011 -0.17%
GBP 0.5278 -0.0009 -0.17%
HKD 5.4829 -0.0134 -0.24%
JPY 71.9430 -0.3830 -0.53%

Commods

Commodity Price Change Time
Gold Index 1322.4 60.100 2016-06-24T00:
Oil Brent 49.0 0.120 2016-06-24T00:
Oil Nymex 47.6 -2.520 2016-06-24T00:
Silver Index 17.8 0.440 2016-06-24T00:

Indices

Symbol Open High Last %
NZX 50 6667.8 6692.9 6667.8 0.38%
NASDAQ 4715.8 4798.2 4910.0 -4.12%
DAX 9237.6 9720.1 10257.0 -6.82%
DJI 17946.6 17946.6 18011.1 -3.39%
FTSE 6338.1 6338.6 6338.1 -3.15%
HKSE 19982.7 20117.2 20259.1 -0.75%
NI225 15153.1 15263.0 14952.0 2.08%
ASX 5113.2 5154.9 5113.2 0.68%