Friday 12th December 2008
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Shares of Hellaby tumbled 14% to $1.25 and are down about 42% this year. Earnings before interest, tax, depreciation, amortisation and one-time items may be $$30 million to $36 million in the year ending June 30, from $$40.6 million in the previous year, managing director John Williamson said. The previous year's results included BBQ Factory, which has been discontinued.
"Our key focus across the group remains on cash flow and return on investment, and we are expecting our working capital initiatives to deliver further improvements during the second half year," he said in a statement.
Hellaby joins companies including retailers in predicting weaker earnings amid a prolonged economic slump that has squeezed profits and spurred job cuts. Hellaby's performance in the five months year-to-date had been affected by the worsening economy across each of its four divisions, Williamson said.
Full-year net income may be $$8 million to $11 million, up from $4.7 million in the previous year, which included the results of the BBQ Factory divestment.
Hellaby is targeting a reduction in bank debt this year to below $70 million from $85.5 million at the end of last year.
The company's stock soared 20% on July 1, when Hellaby announced the sale of the BBQ Factory chain after writing down the business in 2007, resulting in an annual loss.
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