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Hellaby so lean any upswing will be 'disproportionately positive', CEO says

Thursday 11th November 2010

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Hellaby Holdings expects to get 'disproportionate' gains when the economy picks up after streamlining its divisions.

The Auckland based company lifted first-quarter sales 2.4% in the three months ended September 30, and group earnings before interest, tax, depreciation and amortisation was $3.1 million ahead of the same period a year ago, managing director John Williamson told shareholders. Net profit was $2.7 million ahead of the first quarter in 2009.

“Particularly encouraging is the fact that our two struggling divisions – equipment and footwear – have performed better than last year for this first quarter,” chief executive John Williamson said in his speech at the annual meeting. "Our businesses are now so lean that we believe any improvement in sales revenues will have a disproportionately positive impact on our profits going forward."

Last month, Hellaby redeemed $50 million of capital notes before their maturity date in its ongoing bid to cut debt and improve its balance sheet.

Williams said "first quarter profit performance is usually less significant than the other quarters in terms of its relative contribution to the full year result” and the annual result should be a significant improvement on last year.

 The shares fell 2.5% to $1.95 in trading today, and have surged 38% this year.

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