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Diversification pays big dividends for Hellaby

Friday 8th August 2003

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Hellaby Holdings has gained a reputation as one of the top performing shares on the Stock Exchange.

In the last five years the shares have climbed from just over $1.50 to about $4.50. Investors would have doubled their money in the past 12 months alone.

The big question is whether the dream run will continue.

Hellaby describes itself as a diversified industrial group with investments in retail, automotive businesses and life insurance. Most of its trading subsidiaries are well established companies operating in non-cyclical markets that fit nicely into Hellaby's "buy and hold" strategy.

A string of recent acquisitions, including tyre company TRS and Whangarei-based Bindons Auto Electrical, are unlikely to stretch the company's balance sheet, meaning more purchases could soon follow.

One uncertainty is the future of insurance company Club Life ­ Hellaby has contributed about $10 million for a 69% stake. Club needs more capital after a period of rapid growth but Hellaby says it is not interested in raising its stake further.

One perceived weakness might be the comparative growth potential of some of Hellaby's other subsidiaries, especially those restricted to the domestic market.

ABN Amro has noted trading conditions remain strong and has forecasted improved profit and earnings for the 2003 year.

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