Investment company Hellaby Holdings ticked every box on the way to reporting yesterday a further improvement in earnings and operating performance for the six months ended December 31.
Earnings before interest and tax rose 12 per cent to $12.2 million from the previous corresponding period, after-tax profit was up 42 per cent to $7.8 million, total net debt was down 35 per cent to $29.5 million, there was a 25 per cent return on funds employed and the interim dividend increased to a tax-paid 5c a share from 4c in the previous corresponding period.
Chairman John Maasland said the result reflected a clear focus on performance and financial discipline across the group.
"Some of our businesses are still operating in very tough markets and the board believes these are creditable financial results for the company," he said.
Group revenue rose in the period by 6.2 per cent to $243.2 million from $229 million.
Most of the growth was driven by a belated return of demand to the equipment sector which grew sales by nearly 29 per cent.
Other divisions experienced generally flat sales growth, despite relatively stable market shares, Maasland said.
Earnings per share for the period rose 19.3 per cent to 10.5c from 8.8c.
Net asset backing at balance date was $1.92 a share ($1.72 a share for the previous corresponding period) and net tangible asset backing was $1.16 a share (95c).
Chief executive John Williamson said the standout performance for the half-year came from the equipment division where an increased focus on after-market services was now being rewarded in addition to a much-improved demand for capital equipment. The division includes AB Equipment and Eurolift NZ.
"While progress is currently being measured against a relatively low base, we're confident momentum will continue building over the second half," he said. There had been a gradual return of on-farm capital expenditure in the rural sector where TRS Tyre & Wheel performed strongly.
The automotive, packaging and footwear divisions generally experienced soft market conditions, particularly in the second quarter, as consumers chose to defer discretionary spending.
That had not deterred subsidiaries from reaping the benefits from operational efficiencies introduced in recent years, and meeting profit targets, Williamson said.
Footwear improved its earnings before interest and tax by 22 per cent despite slightly lower revenue.
"This is an outstanding achievement."
Although there were no acquisitions or disposals in the period under review, Williamson said the group continued to actively assess many acquisition opportunities.
All opportunities were evaluated according to the return on investment and valuation criteria identified in the company's strategic framework.
Hellaby's investment approach would be patient and selective, he said.
Hellaby had now established an effective performance culture of "doing more with less" and would continue to focus on improving earnings and building strong market positions through customer knowledge and service.
The upside of a weak economy was that good-value acquisitions and investment opportunities were likely to occur, Williams said.
"We intend to ignore the state of the economy and get on with reshaping our portfolio with a mix of assets which we believe will create superior growth in shareholder value."