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Hellaby reports rise in profit

Monday 28th February 2011

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Investment company Hellaby Holdings has reported a 138% rise in interim net profit and 51% rise in underlying profit as funding costs fell and investments performed better.

Net profit after tax rose to $5.5 million in the six months to December 31 from a year ago, while earnings before interest, depreciation and amortisation rose to $14.6 million.

The company declared an interim dividend of four cents a share, payable on May 6.

The improved profit reflected a combination of better subsidiary trading performances, particularly in the equipment and footwear divisions, as well as reduced group funding costs following a capital restructuring.

The company has a portfolio of investments in the automotive, equipment, packaging and footwear industries. It owns shoe retailers Hannahs and Number One Shoes, AB Equipment, Eurolift and car parts firms.

Total group revenues were $229 million for the half-year were 2% up on last year.

The footwear division produced earnings before interest and tax of $1.4 million, compared to a $1.5 million loss for the same period in the previous year.

"The improvement follows the restructuring and repositioning of Number One Shoes. Consumer demand generally remains subdued and inconsistent for the footwear sector," Hellaby said.

Commenting on the outlook, the company said the impact of the Christchurch earthquake last week was unclear at this early stage. However, the company was seeking to ensure continuity of work for its people.

It was particularly cautious about trading conditions for its equipment and footwear divisions during the second half year period, and was unable to see many "green shoots" across its trading sectors.

"We nonetheless prefer to find a positive angle in this weak economy," managing director John Williamson said.

"Our businesses are now so lean that any future revenue improvements should have a disproportionately positive impact on our profits going forward. Also, acquisition and investment opportunities are now more likely to emerge."



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