Hellaby Holdings has warned shareholders at its annual meeting today that it has seen no sign of green shoots in the industries it covers, but it is still anticipating significantly improved earnings for the coming year.

The listed investment company – which saw its net profit after tax for 2009 fall from $4.7 million to $707,000 – revealed market conditions had remained “very difficult” in the first quarter of 2010, especially in the agricultural, equipment and retail sectors.

Chief executive John Williamson said group earnings after the first quarter were behind last year and the company was anticipating a slow first half year for earnings, followed by a stronger second half.

In speech notes provided to the NZX, he said the group’s automotive and packaging divisions were performing “relatively well” for the first quarter, but it did not expect to see an uplift in its equipment and footwear divisions until the second half of this financial year.

“Overall, we are expecting to see gradual economic improvement from the third quarter of this financial year – in other words after January 2010 rather than before.”

He said the extraordinary economic environment made forecasting performance for the current year extremely difficult, and the company could only repeat the forecast made at its annual result announcement in August: that it expects to achieve significantly improved earnings for the coming year.

Total revenue for the 2009 year fell 7.6% to $481 million and chairman Bill Falconer – who retired at the end of the meeting after 14 years as Hellaby Holdings chairman – said the results for the year reflected influences “largely beyond the company’s control”.

However he did acknowledge the “disastrous investment” in BBQ factory, saying it had handicapped the company’s response to the current business environment.

Mr Williamson said the company had now completed a two year performance turnaround project and was now focused on further growth.

He said the culture change at the company – which included taking an ‘old-fashioned’ approach towards clear working capital targets and rigorous review processes across all subsidiaries, along with “very blunt” dialogue with management – had allowed the company to strengthen its balance sheet, with core bank debt reduced by 40%, and total net debt falling by 26%.

“As our focus now shifts to growth in 2010, I commit to our shareholders that we will not take our eye off the ball with regard to further improving our balance sheet and gearing position. We can still do better.”

He also acknowledged the declining share price that reached its nadir in Macrh due to concerns about debt gearing, reduced earnings, the BBQ Factory fiasco and lower dividends.

“We have now dealt with the major legacy issues. Naturally we are not at all comfortable with this historic price trend, and I can assure you that a 40 cent share price does nothing for the ego. The share price improvement over the past six months is a small but nonetheless important step back in the right direction.”