Investment company Hellaby Holdings is taking a more active approach to its portfolio, and expects annual earnings to recover after posting its first loss since it re-listed in 1994.
The company is also eyeing more non-core asset sales, and the purchase of businesses in the industrial and distributionsectors that it can add to existing divisions, Hellaby chief executive John Williamson told shareholders at today's annual meeting.
Last year's loss included a writeoff of $18.8 million in the loss-making BBQ Factory, which the company has admitted it overpaid for, prompting Hellaby to try to turn around its performance.
"We have made a mistake with the acquisition of the BBQ Factory, we have weakened our balance sheet, and we have arguably been too passive in the operational overview of our assets," Mr Williamson said.
The company wanted new BBQ Factory chief executive Tim Wilson to quickly achieve break even, including opening and upgrading stores and increasing advertising, before it reviewed the future of the business.
Hellaby had decided to hold on to its footwear chains Hannahs and No 1 Shoes, which were profitable and had growth potential despite a challenging retail environment, but was reviewing its business performance across the board.
The group result for the first quarter was on target, and earnings before interest and tax was about $2m ahead of last year.
"Based on our first quarter group profit performance, we believe that we remain on track to achieve our target earnings before interest, tax, depreciation, amortisation and one-offs for this current financial year, of around the $45 million achieved in recent years before 2007," Mr Williamson said.
The automotive parts and industrial divisions were well ahead in the first quarter, the expanded Elldex packaging group was also ahead, and in its retail division, the footwear chains were on target but the BBQ Factory was poor as expected.
Mr Williamson's incentive payments were linked to targets of annual performance improvement, and growth of at least 15 per cent a year in total shareholder return over the next three years.
Shares in Hellaby were a cent lower at $2.72 in a slightly weaker overall market.
