Hellaby Holdings reports continued profit improvements

Investment company Hellaby Holdings today reported further improvement in earnings as operational and capital restructuring initiatives of recent years continue to deliver efficiencies.

Despite sluggish economic conditions in the final quarter of 2011, net profit after tax (NPAT) for the six months ended 31 December 2011 rose 41.9% to $7.8 million, from $5.5 million in the prior comparative period (pcp).

Group revenues for the half year period rose 6.2% to $243.2 million from last year’s $229 million. Most of the growth was driven by a belated return of demand to the Equipment sector, which grew sales by 28.9% against the pcp. Other divisions experienced generally flat sales growth despite relatively stable market shares.

Trading conditions notwithstanding, group EBITDA (trading surplus before interest, tax depreciation, amortisation and before one-off transactions) and EBIT (trading surplus before interest, tax and one-off transactions) again grew at a greater rate than group revenue, as subsidiaries continued to lock in operational efficiencies. Group trading EBITDA was $15.8 million, 8.1% higher than the pcp, with a group trading EBIT being $12.2 million, up 11.6% on the pcp.

Hellaby cut total net debt (interest-bearing including core blank debt) by 34.8% to $29.5 million at 31 December 2011, reflecting higher profits and reduced capital expenditure. Group gearing (total net debt to total net debt plus equity) at 31 December fell to 17.1%, compared to 26.3% for the pcp.

Hellaby’s return on funds employed for the rolling 12 month period was 25.2% compared to 21.6% for the pcp – comfortable exceeding the group target of 20%. Earnings per share for the period rose 19.3% to 10.5 cents from 8.8 cents per share for the pcp. Net asset backing at 31 December 2011 was $1.92 per share ($1.72 per share for pcp) and net tangible asset backing was $1.16 per share (95 cents per share for pcp).

Chairman John Maasland said the results reflected a clear focus on performance and financial discipline across the group. “Some of our business are still operating in very tough markets and the board believes these are creditable financial results for the company.’

Performance highlights for the half-year to 31 December 2011

EBIT up 12% to $12.2 million

NPAT up 42% to $7.8 million

Total net debt down 35% to $29.5 million

25% return of funds employed

Significant improvement by Equipment division

Interim dividend of 5 cents per share, fully imputed