Hellaby Holdings, the diversified investment company, posted a 21% drop in first-half profit in spite of its AB Equipment and Eurolift businesses doing well.
AB Equipment and Eurolift lifted earnings before interest and tax (EBIT) by a third to $2 million as sales gained 11% to $61.5 million.
Over all, Hellaby’s profit fell to $6.2 million in the six months ended December 31, from $7.8 million a year earlier. The Auckland-based company says sales rose 1% to $245.6 million.
Profit and sales missed the $9.3 million and $254 million respectively forecast by Forsyth Barr analyst John Cairns, while the interim dividend was kept at 5 cents, compared with expectations of 6 cents. The shares fell 1.5 percent to $3.21, having gained almost 30 percent in the past 12 months.
Hellaby says full-year profit will fall about 4% to $18.5 million, including about $800,000 in one-time transaction and funding costs for the acquisition of Contract Resources, a specialised engineering maintenance and industrial cleaning company.
The $73 million purchase, which is yet to be completed, will be debt funded and start contributing to earnings in 2014, Hellaby says.
The company says its footwear earnings were “disappointing” and reflected competitor activity in a flat market, which hurt Hannahs more than Number 1 Shoes. Automotive also faced increased, “price-driven” competition and lower spending by consumers and farmers.
The equipment division benefited from strong demand for directional drilling and forestry equipment while the packaging business was “a work in progress”, coping with lower margins from its supermarket customers.
