Following an in-depth six-month review after joining the company in November 2015, yesterday Hellaby Holdings managing director and chief executive officer Allan Clarke presented a new strategic direction.
The Hellaby Group currently has more than 3,000 staff across New Zealand, Australia, the Middle East and the Americas. More than 30% of revenues are now generated offshore with growth opportunities identified in all markets.
According to Clarke, Hellaby’s business group management teams will now be taking greater responsibility for their market development initiatives.
The chief operating officer Neil MacCulloch and chief investment officer Greg Batkin have resigned, and Clarke says the company will not be replacing people into the roles.
Instead, Clarke says the individual Automotive, Resource Services, Equipment, and Footwear business groups within Hellaby Holdings will now take full responsibility for their performance and driving market development.
“Hellaby’s head office team will provide strategic oversight and support for each group, and a rigorous planning and process framework will guide performance and direction,” says Clarke.
However, Hellaby has told the market it considers the Footwear Division is a non-core business and will be divesting it at a suitable time.
“Hellaby has some fantastically scalable business groups where there are meaningful opportunities for us to add value and deliver attractive medium to long-term investment returns to our shareholders,” says Clarke.
“There is still near-term earnings volatility inherent in some of the businesses and markets in which we operate. Therefore, an important focus going forward will be to complement the more volatile high-margin revenue opportunities, with lower margin but steadier and more predictable earning streams,” he says
Hellaby chair Steve Smith says the Board fully supports the new strategic direction and believes it will enhance medium-to-long term shareholder value.
“With the move towards a more decentralised business model, we expect more interaction between the Board and the individual group management teams, focused on strategy, markets, customers and people,” says Smith.
“Hellaby’s balance sheet is strong with a conservative gearing of just under 30%, below our target gearing of 45%. We remain well positioned to fund future growth opportunities, as well as continuing to pay attractive annual dividends to our shareholders,” he says
Market and economic conditions continue to be variable across all of Hellaby’s major Resource Services markets. In particular, the ongoing oil price and production volatility continue to impact on refinery maintenance schedules.
“The expected second-half contract work has not eventuated at the levels estimated before Christmas as some our Australian and Middle East customers have again pushed out planned maintenance work even further,” says Clarke.
“We expect to have an update on trading conditions and to issue guidance ranges for the financial year in three weeks’ time, following completion of a detailed review that is currently underway,” he says.
