Archive | Hellaby Holdings

Update: Bapcor offer unconditional

Published 15 January 2017
Bapcor Ltd declared its takeover offer for Hellaby Holdings Ltd unconditional on Friday. Bapcor said it had received acceptances for 52.5% of Hellaby’s shares and it extended the offer to Tuesday 7 February.

Hellaby takeover down to the details
Published 12 January 2017

Australian automotive aftermarket parts company Bapcor Ltd lifts its stake in New Zealand takeover target Hellaby Holdings Ltd over 50% on Monday, waived the 90% acceptance threshold on Tuesday but said its offer remained subject to a number of other conditions that had yet to be declared satisfied or waived.

Hellaby said yesterday representatives of its board would meet Bapcor representatives today & tomorrow to clarify Bapcor’s remaining conditions, timing & offer extension intentions. The offer period currently closes next Wednesday, 18 January.

Earlier stories:
10 January 2017: Bapcor gets to 50% of Hellaby
2 November 2016: Hellaby independent directors reject Bapcor offer
27 September 2016: Australian auto parts company Bapcor bids for Hellaby

Attribution: Company releases.

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Bapcor gets to 50% of Hellaby

Australian automotive aftermarket parts company Bapcor Ltd lifts its stake in New Zealand takeover target Hellaby Holdings Ltd over 50% yesterday after holders of 1.4% of Hellaby sent in acceptances in the last 3 days.

Those acceptances took Bapcor’s stake to 50.1%. Itss offer is conditional on 90% acceptance.

Bapcor originally offered $3.30/share, then raised the offer to $3.60 but excluded an interim dividend.

Earlier story:
7 January 2017: Bapcor edges close to majority stake in Hellaby

Attribution: Company release.

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Bapcor edges close to majority stake in Hellaby

Australian automotive aftermarket parts company Bapcor Ltd lifted its stake in NZX-listed Hellaby Holdings Ltd another 1.2% to 48.7% in the week to 4 January, even though Hellaby’s independent directors continued to argue full takeover was likely to result in sale of the non-automotive parts of the business at less than optimum prices.

Bapcor made it plain when it launched its offer in September that its target was Hellaby’s automotive parts business and that it would sell other divisions. Hellaby’s independent directors told shareholders on 20 December: “This [selldown] would be at a low point in Contract Resources’ trading history and before the restructure of Footwear is completed. In recent years, Hellaby has successfully sold, at the appropriate time, the packaging & equipment groups, realising full value for shareholders. The board believes that a carefully planned & controlled divestment process would be more likely to realise the embedded value of the Hellaby businesses and provide value of more than $3.60/share.”

The Hellaby board said that, if the Bapcor offer failed, it intended to immediately confirm an interim dividend in line with its existing dividend policy, as well as pay a special dividend to allow shareholders to benefit from the capital gain realised on the equipment group sale.

Bapcor’s offer is conditional on 90% acceptance, but it could declare its offer unconditional once it achieved majority control.

The independent Hellaby directors said this would introduce complexities, including material restrictions on related party transactions, and would affect independent directors’ duty to act in good faith & in the interests of the company as a whole [as the majority shareholder worked to sell assets].

Bapcor originally offered $3.30/share. Grant Samuel & Associates Ltd gave a valuation range of $3.60-4.12/share, which was also below the independent directors’ view of fair value.

The independent directors said Bapcor’s offer failed to reflect the full value of Hellaby and, in particular, its automotive group. They believed the automotive group had a standalone value of at least $350 million, excluding the significant synergies & other benefits that would be gained by Bapcor from a merger of the 2 businesses.

Bapcor had lockup agreements for just under 30% of Hellaby when it made its $3.30/share offer in September, 27.2% of that with Hugh Green Group and the balance with institutions. The market price then was $3.04, after rising from a low point of $2.45 in June. The price yesterday was $3.52.

Earlier stories:
2 November 2016: Hellaby independent directors reject Bapcor offer
27 September 2016: Australian auto parts company Bapcor bids for Hellaby

Attribution: Company releases, NZX.

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Hellaby independent directors reject Bapcor offer

Hellaby Holdings Ltd’s independent directors unanimously recommended yesterday that shareholders reject the Bapcor takeover offer made on 21 October.

The target company statement incorporates an independent advisor’s report by Grant Samuel & Associates Ltd.

Bapcor offered $3.30/share. Grant Samuel’s valuation range is $3.60-4.12/share, which is also below the independent directors’ view of fair value.
The independent directors said Bapcor’s offer failed to reflect the full value of Hellaby and, in particular, its automotive group. They believed the automotive group had a standalone value of at least $350 million, excluding the significant synergies & other benefits that would be gained by Bapcor from a merger of the 2 businesses.

In addition, the independent directors believed the offer price didn’t fully value Hellaby’s other groups – resource services & footwear – or reflect the considerable opportunity for profitable growth under Hellaby’s recently communicated group strategy.

Hellaby will send its response to shareholders on Friday.

Links: Hellaby
Hellaby target company statement

Attribution: Company release.

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Judgment on Green empire doesn’t end hostilities

The Court of Appeal issued a judgment on Friday in the ongoing battle for control of the late Hugh Green’s property & business empire between his eldest 2 children, John & Maryanne.

It’s unambiguous, but it doesn’t end the battle over a business empire worth an estimated $400 million, best known for its land subdivisions around Auckland.

The 3 judges – Stephen Kós, appointed president of the court shortly before the hearing in July, with Justices Rhys Harrison & Christine French – went into detail in support of Justice Helen Winkelmann’s High Court finding against John Green of undue influence resulting in will & role changes in his father’s final 2 years. Justice French wrote the court’s reasons.

Justice Winkelmann is also now on the Court of Appeal bench, appointed on 1 June 2015, 2 days before issuing her decision in this case. She heard the Greens’ dispute in 2014, when she was chief judge of the High Court.

Hugh Green wanted John Green and another sister, Frances, to become more involved in running the family business. But Maryanne, who’d joined it in 1987 and was chief executive for most of the time since then, questioned John’s honesty over cattle transactions before he left for Australia in the 1990s and rejected her father’s desire for her to run the group with John.

Hugh Green emigrated from Ireland in 1951 and formed Green & McCahill Ltd with another Irishman, Barney McCahill. In the early 2000s they dissolved their partnership, by then a complex group with wide property, trading & investment interest, and the Green family carried on under the Hugh Green Group name. Mr Green was diagnosed with a terminal illness in 2010 and, over the next 2 years, tried to work through family plans for the businesses’ future. He died in July 2012, aged 80.

Justice Winkelmann held that trust resolutions in December 2011 appointing John & Frances as directors weren’t validly passed by the required majority. She also held that grounds were made out for the removal of John & Frances as trustees on the grounds that the level of hostility they felt & exhibited toward Maryanne and her adopted daughter Alice “is sufficient to undermine the execution of the trusts for the benefit of all beneficiaries”.

Over a period of 9 months Hugh made a number of decisions, the combined effect of which was to remove Maryanne completely from control of any aspect of the Green Group and to put John & Frances & Auckland barrister Michael Fisher – who was also John Green’s golfing partner – in charge.

The level of influence

In the Court of Appeal judgment, Justice French wrote: From 7 November 2011 onwards, Mr Fisher purported to act as Hugh’s primary legal advisor. He played a central role in the events at issue. It was Mr Fisher who advised Hugh that Maryanne was in breach of her duty as a trustee for refusing to co-operate, even though he did not know the detail of just how Maryanne’s refusal to co-operate had manifested itself.

“It was Mr Fisher who suggested and then drafted a letter from Hugh purporting to put Maryanne on notice that she was at risk of being removed. And it was Mr Fisher who was responsible for drafting the formal documents effecting Maryanne’s removal and his own appointment as trustee & director. He organised critical meetings, expressed strong antipathy to Maryanne and generally aligned himself with John.”

Justice Winkelmann had already noted that Mr Fisher’s involvement was irregular from the outset. Justice French: “Although he had acted from time to time for the family & their interests, he was not the usual lawyer acting for the [family] trusts. He was a barrister specialising in civil litigation. He had no instructing solicitor and he did not obtain a letter of engagement.

“Another irregular feature of Mr Fisher’s involvement was that most of his instructions, including the initial instruction to act, came not from Hugh but from John. John & Mr Fisher had known each other since teenage years and played golf together. In addition to taking his instructions from John, Mr Fisher also used John as a post box for documents he had prepared for signing by Hugh & [Hugh’s wife] Moira.

“John claimed in evidence that when instructing Mr Fisher he was simply passing on Hugh’s instructions. John further claimed that Mr Fisher ‘always’ confirmed with Hugh the instructions he had received from John.

“Justice Winkelmann did not, however, accept John’s claims and we consider with good reason. Mr Fisher did not have any file notes of discussions with Hugh. His phone records did not contain evidence of any telephone discussions with Hugh. Nor did his time sheets, apart from 2 or 3 entries. In contrast, his records showed extensive contact with John. The communications between the 2 include a very telling email in which John asks Mr Fisher to meet to discuss ‘tactics’.

“Another troubling feature of Mr Fisher’s conduct is that he acted at John’s direction even when it was John (and indeed Mr Fisher himself) who stood to benefit personally from those directions.”

The judges noted evidence that, “within 24 hours of signing the deeds removing Maryanne as trustee, Hugh was both denying having removed Maryanne and giving the impression he really did not know why she had been removed, did not know who had prepared the papers and who had brought them to him to be signed. He caused the deed of removal to be torn out of the trust minute book and handed it to Maryanne, saying ‘You are my trustee’.

“Another telling piece of evidence relates to events in January 2012 regarding Maryanne’s status as trustee. As mentioned, Hugh had said he wanted her to continue. That was said on 21 December 2011. Yet in January 2012 John was pressing ahead to implement her removal as trustee. On 12 January 2012 Mr Fisher received instructions from John to prepare documents that referred to Maryanne as having been removed as trustee. John’s instructions to Mr Fisher were not only at odds with what Hugh had said on 21 December, they were also at odds with what Hugh had told Mr [Robert] Narev [another trustee] on 11 January 2012. Hugh had told Mr Narev he assumed Maryanne had been reappointed. Hugh later reiterated to Maryanne on 2 separate occasions in April 2012 that she remained a trustee.”

Summing up this aspect of the case, Justice French said the presence or absence of independent advice is often a critical factor when deciding whether to draw an inference of undue influence: “In this case there was compelling evidence Hugh was not receiving independent advice. His chief advisor throughout the relevant period was a man who was not his usual lawyer, who had minimal contact with him and who was doing the bidding of the person exerting the pressure.

“In those circumstances we consider the judge [Justice Winkelmann] was correct to characterise Mr Fisher’s role as facilitating John’s influence, instead of neutralising it and protecting Hugh as he should have done.”

Justice French said that, although Hugh undoubtedly wanted to appoint John & Frances as trustees and for the children (now in their 50s & 60s) to work together, “it does not logically follow he also wanted to remove Maryanne completely”.

In conclusion on the substantive judgment, Justice French wrote emphatically: “The High Court judgment contains a thorough & comprehensive analysis of the evidence. In our assessment, there was a solid evidential basis for all the findings and they are findings with which we agree, having ourselves independently reviewed the evidence. The findings are supported not only by Maryanne’s narrative, but also importantly by contemporaneous documentation, including John’s own written communications. The judge did not misapply the law. Nor did she misconstrue the facts. The appeal against the substantive judgment is dismissed.”

The appointment & removal orders

Justice Winkelmann made an order recalling the grant of probate for the will dated 26 April 2012, and a series of orders on appointments:

  • Declarations that Mr Fisher & lawyer John Gosney weren’t validly appointed as trustees of the Hugh Green Trust or the Hugh Green Property Trust
  • An order removing John & Frances as trustees of the 2 trusts
  • A declaration that Maryanne is a director of all group companies from which she was removed as a director from 2 April 2012, and a declaration that she shouldn’t be liable as a director for any directors’ decisions or actions between 2 April 2012 and the date of the relief decision
  • A declaration that John, Frances, Mr Fisher & Mr Gosney weren’t validly appointed and were & are not directors of any of the companies in the Green Group
  • A declaration that Maryanne is a trustee of the 2 trusts
  • An order appointing 2 independent interim trustees of the 2 trusts until further order of the court, and
  • An order restraining Maryanne from exercising her power to vote as a trustee pending further order of the court and from attending trustee meetings unless called upon to do so by the interim trustees.

The continuing hostilities

Justice French said the Appeal Court had been told Mr Fisher & Mr Gosney did not intend to resume office as trustees. The judge added: “The reports show the interim trustees have put appropriate governance structures in place, are dealing with beneficiaries in a fair & even-handed manner, communicating with them and working well with Maryanne as their co-trustee.

“Notwithstanding this, the appellants say they are ‘devastated’ by the High Court decision because the outcome is the very antithesis of what Hugh wanted. Strangers are running the business and the only trustee who is a family member is Maryanne, and she does not enjoy the support of the rest of the family and therefore does not represent their interests. We were told that, apart from Maryanne & Alice, all the other beneficiaries (15 in total) support John & Frances and want the High Court decision quashed.”

At the Appeal Court hearing, they sought the reinstatement of either: both John & Frances, or one of them with the retention of Maryanne and the 2 independent interim trustees. An alternative & less favoured option was the removal of Maryanne, leaving the trust to be run solely by the independent trustees.

“After the hearing, counsel for John & Frances filed a memorandum dated 6 September 2016. The memorandum advised John & Frances wished to withdraw the submission that both or either of them should be trustees together with Maryanne. Removing Maryanne and having the trust operated by independent trustees only was now the preferred option.

“This possibility had not been advocated by the appellants at the hearing until it was raised by us. We raised it because of the obvious need for there to be a long-term solution and because of concern that Maryanne’s continued participation as trustee could fuel yet more discord & more litigation. This concern was shared by Justice Winkelmann and was the reason the judge made an order imposing interim limitations on Maryanne’s trusteeship.

“There is, however, a separate proceeding, as yet undetermined, that has been brought by the appellants in the High Court seeking to remove Maryanne as trustee. Maryanne consented to the interim limitations on the basis the appellants’ application for her removal as trustee would be promptly heard & determined. That has not happened.

“On further reflection, we consider that, quite apart from possible jurisdictional problems, it would be wrong for us to consider removing Maryanne without there having been a proper process where that issue has been directly & fully ventilated. Like Justice Winkelmann, we also wish to stress that our raising the possibility should not be taken to suggest we think Maryanne is unfit to be a trustee. The interim trustees report that Maryanne has demonstrated ‘a fair-minded, objective & responsible approach to all matters affecting the trusts & the beneficiaries’.”

Justice French said that, when Hugh Green’s 1 November 2011 will again takes effect, the power of appointment & removal of trustees will vest in Moira & Mr Narev, and Moira at least is closely aligned with John & Frances. That raised the prospect of the removed trustees being reappointed anyway, regardless of the outcome of this appeal.

However their counsel, Mark O’Brien, said that if the Court of Appeal upheld the High Court orders, “his clients could not & would not reinstate those whom a court did not consider fit to be a trustee”.

Control, and unequal treatment

The court action goes well beyond animosity between 2 siblings or the running of a business, extending to the treatment of their children, including Maryanne’s adopted daughter, and of one of Hugh & Moira Green’s 5 children, one of whom was a nephew who was adopted.

Justice Winkelmann found not only that hostility existed, but that it was of such intensity it was sufficient to undermine the proper execution of the trusts for the benefit of all beneficiaries.

“In support of that conclusion, the judge pointed to evidence of unwillingness on the part of the trustees to communicate directly with Maryanne & Alice, unwillingness to provide them with information and the failure to make any inquiry into Alice’s circumstances to establish her needs, despite her being a young mother who had recently separated from her partner. The judge considered this contrasted sharply with the way the trustees had considered and met the needs of John & Frances’ children….

“We note too that after Hugh’s death an issue was raised about Alice’s eligibility as a beneficiary under the Hugh Green Trust on the ground she is adopted. Proceedings have been issued (the interpretation proceedings). If Alice were to be excluded along with Hugh’s adopted nephew and the nephew’s children, it would mean that most of the wealth Hugh created would ultimately go to the 6 children of John & Frances.”

Permanent solution still not in sight

Justice French said the appellants might have been expected to deal with the matter by way of a consent court order & a deed of indemnity or family arrangement. After the court expressed disquiet that the appellants wanted to take this to a fresh High Court hearing, they filed a memorandum on 6 September advising that John, Frances & Moira would agree to consent orders.

Justice French said the Court of Appeal considered the issuing of these proceedings and the position taken by the appellants until very recently to be significant in 2 respects: “First, it reinforces Justice Winkelmann’s view that John & Frances cannot be relied upon as trustees to act in Alice’s interests and, second, it sits uneasily with the appellants’ claim to be only wanting to honour Hugh’s wishes.

“During his lifetime, Hugh made no distinction between family members who were adopted and those who were not. He treated all equally and, in particular, made distributions from the Hugh Green Trust to them all, including Alice.”

With that, the court saw no grounds for interfering with the orders Justice Winkelmann made in her relief decision.

The higher court also said the measures Justice Winkelmann put in place were working well, but were only a stopgap: “There is a need for a permanent solution, which ultimately can only be achieved by the family itself.”

On the contents of these 2 judgments, a permanent solution seems unlikely.

Hellaby millions may be cashed up

One large Green Group investment which might be turned to cash soon is its 27.2% holding in NZX-listed Hellaby Holdings Ltd. Australian automotive aftermarket parts company Bapcor Ltd made a full takeover offer for it at $3.30/share, which prices the Green interest at $87.7 million. Hugh Green Group has accepted the offer, but the independent committee of the Hellaby board has advised shareholders to wait until an independent report by Grant Samuel is received.

Managing director, chief executive & board committee member Alan Clarke said on Friday: “The preliminary view of the independent directors is that the proposed offer is opportunistic and does not represent fair value for Hellaby.”

Hugh Green bought his initial investment in Hellaby in the 1980s when it was the high-flying Renouf Corp Ltd and headed by Sir Frank Renouf.

Earlier stories:
27 September 2016: Australian auto parts company Bapcor bids for Hellaby
22 June 2015: Judge rules on Hugh Green family’s feud

Attribution: Judgments, NZX.

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Australian auto parts company Bapcor bids for Hellaby

Australian automotive aftermarket parts company Bapcor Ltd made a full takeover offer for NZX-listed Hellaby Holdings Ltd at $3.30/share today.

That’s a 14% premium to the one-month volume weighted average price, an 18% premium to the 3-month average and a 23% premium to the 6-month average.

Bapcor had lockup agreements for just under 30% of Hellaby when it made its announcement this morning, 27.2% of that with Hugh Green Group and the balance with institutions.

Hellaby long focused in its ownership on businesses that provide innovative solutions in specialised industrial services sectors, the automotive & resource services sectors in particular.

Bapcor chief executive Darryl Abotomey said: “The proposed acquisition of Hellaby, if successful, will enable Bapcor to enter the New Zealand automotive parts market and use its scale & proven industry expertise to improve the service & range of products offered in New Zealand, while looking for opportunities to expand, as it successfully has in Australia.”

Bapcor provides automotive aftermarket parts, accessories, automotive equipment & vehicle servicing, and listed on the ASX in 2014. It bought the $A275 million Metcash Automotive in July 2015 as a pillar to expansion, and has grown from an $A300 million market cap company at listing to $A1.5 billion.

The offer is conditional on 90% acceptances & NZ Overseas Investment Office consent. Bapcor expects to fully fund it through a combination of current cash holdings, debt facilities & $A185 million of new equity. It was conducting a bookbuild for the institutional placement today.

Attribution: Company releases.

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Propbd on Q M4July16 – New lease plus Boulcott settlement for Vital, Hellaby completes TBS buy, Augusta payout up after losing PIE status

Vital gets new lease at Kensington and settles on Boulcott
Hellaby completes TBS acquisition
Augusta to lift distribution, confirms loss of PIE status

Vital gets new lease at Kensington and settles on Boulcott

Vital Healthcare Property Trust has secured a 30-year lease at Kensington Hospital in Whangarei, and settled its acquisition of Boulcott Private Hospital in Lower Hutt.

Vital management company chief executive David Carr said on Friday Kensington Hospital Ltd had signed a new 30-year lease, including annual CPI reviews & periodic reviews to market.

The 2-level private hospital has 3 theatres & 19 beds, and includes an adjoining primary care facility.

Vital announced the conditional acquisition of Boulcott Private Hospital in December. It now has regulatory approvals and has settled the acquisition for $30.7 million on a 22-year lease to ASX-listed Pulse Health Group Ltd.

Mr Carr said: “Once we factor in the new 30-year lease at Kensington, the 22-year lease at Boulcott and the previously announced 10-year lease extension at Epworth Eastern Hospital in Melbourne, Vital’s weighted average lease term to expiry improves to about 18.2 years. On average, Vital now has about 1.8% of total income expiring annually over the next 10 years, with the largest single expiry over the same period representing about 2.2%.”

Hellaby completes TBS acquisition

Hellaby Holdings Ltd has completed its $45 million acquisition of construction services & asset maintenance company TBS Group Ltd, announced in June as a conditional agreement.

Hellaby chief executive & managing director Alan Clarke said the consideration was $40.5 million in cash, $4.5 million in shares plus an earn-out payment of up to $6 million dependent on achievement of 12-month earnings targets.

TBS was generating annualised revenues of about $85 million and was expected to add about $8 million in annualised ebit to Hellaby’s resource services group in the 2017 financial year.

It provides key maintenance services to a wide range of New Zealand clients in the oil & gas, agricultural, construction & power generator markets.

Augusta to lift distribution, confirms loss of PIE status

Augusta Capital Ltd said on Friday it expects its annualised distribution level to increase from 5c to 5.5c/share. The fully imputed first interim quarterly dividend for the financial year should be declared this month.

Managing director Mark Francis also confirmed that the loss of PIE (portfolio investment entity) status as a result of the continuing success & growth in value of its funds management business was effective from 1 July.

Attribution: Company releases.

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Hellaby’s writes down whole of footwear shops’ goodwill

Investment company Hellaby Holdings Ltd said on Friday it would write down the full $26.9 million value of goodwill in its footwear retail subsidiaries Hannahs & Number One Shoes, effective 30 June.

Chief executive John Williamson said: “This non-cash writedown follows Hellaby’s annual goodwill impairment review and reflects a change in retail trading conditions which has resulted in 2 years of below-expectation performance by the 2 businesses. Both Hannahs & Number One Shoes are trading profitably.

“Hellaby’s board & management believe this decision will leave the carrying value of each retail company at a level more reflective of market conditions & performance.”

Mr Williamson said that, given Hellaby’s strong earnings growth during the June 2014 financial year and a positive outlook for the year ahead, the board had determined the group would calculate its final dividend as if no goodwill impairment had occurred, reflecting the non-cash nature of the impairment.

The company said it still expected its profit for the June 2014 financial year, before the goodwill impairment, to be in line with or slightly above the 26 May guidance of around $54 million ebitda & $25 million group net profit after tax.

Hellaby’s will release its full-year results on Thursday 28 August.

Attribution: Company release.

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Notes too expensive, so Hellaby redeeming them early

Published 13 October 2010

Investment company Hellaby Holdings Ltd said yesterday it intended to redeem $50 million capital notes issued in 2006 6 months before maturity.

The notes were due to mature in June 2011. Early cash redemption is permitted under the company’s trust deed, and chief financial officer Richard Jolly said Hellaby wanted to further enhance its capital structure following its $31 million equity capital-raising last month. Mr Jolly said the company had decided to redeem the capital notes early to take advantage of lower interest rates available through its core bank debt: “The stated objectives of our equity-raise were to adopt a more conservative capital structure, to increase financial flexibility and to position ourselves for future growth & improved profitability. “We believe this initiative is consistent with those objectives. Whilst we are currently in a position to lower the company’s overall interest cost through our banking facilities, our debt gearing levels still give us the capacity to fund future growth opportunities.” The capital notes pay a fixed coupon rate of 8.5%/year, quarterly in arrears, and currently have a maturity date of 15 June 2011. They will be redeemed in full on 15 December. Noteholders will be paid 100% of face value plus accrued interest.

Hellaby structures its investment portfolio through 4 divisions – automotive, equipment, packaging & footwear.

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Attribution: Company release, story written by Bob Dey for the Bob Dey Property Report.

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Maasland joins Hellaby board as share price continues to decline

Published 13 April 2008

Hellaby Holdings Ltd has appointed former newspaper chief executive & Auckland International Airport Ltd chairman John Maasland to its board as the Hellaby share price continues to decline, despite a profitable half-year.


Hellaby has at least 2 more board appointments to make before the end of the financial year in June, one to replace major shareholder Hugh Green and the other to replace former chief executive David Houldsworth, whose retirements were both indicated at the annual meeting last November.


Hellaby’s share price has lost nearly 20% of its value since the interim result was announced on 26 February. The shares have declined from $2.22 on 28 February to $1.79 on 11 April. NZX shows a 52-week high of $4.29, but the latest price is just above current NTA of $1.68.


The interim result showed a strong turnaround after the company made its first annual loss, for the June 2007 year, since relisting in 1994. At the annual meeting in November, chairman Bill Falconer outlined a number of measures to arrest Hellaby’s performance decline and set it on a new path – a programme which investors don’t seem to rate highly so far.

Mr Falconer said this week the board was delighted to have a new an independent non-executive director of Mr Maasland’s calibre: "John Maasland brings proven experience to the Hellaby board, both in company leadership & governance. He is highly commercial and not afraid to make the tough decisions required by the company to improve its performance and reshape its portfolio."


Mr Maasland resigned last November as chairman of Auckland International Airport Ltd after 13 months in the job, following a number of changes to the board’s composition at the annual meeting. He’s chairman of NZ Radio Network Ltd, a director of APN News & Media Ltd, Delegat’s Group Ltd, Waterman Holdings Ltd & the Auckland Regional Chamber of Commerce, a former chairman of Carter Holt Harvey Ltd and Wilson & Horton Ltd, and was previously chief executive in listed media & industrial companies. Mr Falconer told the annual meeting in November that Hellaby’s trading surplus fell 28% to $34 million because of a decline in operational performance, and it recorded a $4.7 million operating deficit as a result of a decision to write down its investment in BBQ Factory.Mr Falconer then outlined measures the board believed would re-establish the company’s earnings capability and take the company forward:“First, we concluded that the company should move away from its history as a relatively passive investment company to a more active relationship with its subsidiaries, and concentrate on optimising operational performance. We have appointed a new chief executive & managing director, John Williamson, who is charged with this responsibility.


“Secondly, we have decided to take a more focused approach to our balance sheet, first by making working capital a target of operational management, and secondly by establishing a dividend policy with a target of distributing 50% of tax-paid profit, with imputation credits attached only to the extent that these are available from taxation payments. In other words, in contrast to earlier years we will not be paying tax in advance in order to generate imputation credits.“We believe this policy will enable both greater investment growth and a more prudent gearing policy. We appreciate this is a change from our previous policy of maximum profit distribution, but our objective is that any dividend curtailment should be offset by capital appreciation resulting from investment in profitable growth.“Thirdly, we have decided that new experience should be introduced to the Hellaby board (as indicated above).“Fourthly, we are actively reviewing our portfolio and determining our mix of core & non-core businesses, with the expectation of concentrating investments around those areas where we have a legacy of investment & operational experience. The board expects that its buy, build & divest strategy will be more rigorously implemented.” 

At the half-year announcement of a 50% increase in ebitda to $19.1 million (before one-off transactions), Mr Falconer announced 2 areas of focus:


to improve the balance sheet through debt reduction related to working capital initiatives and ongoing review of the asset portfolio, andto improve the performance of the retail businesses during the second half of the financial year. 

Already, however, there’s evidence of a turnaround. Group ebit rose 70% to $13.9 million and net profit after tax rose 81% to $5 million, despite a higher net tax expense (up from $1 million to $1.9 million) & increased interest payments.


[You might ask what I’m doing writing about a company like Hellaby, which has no strong property industry connections. I’ve written about it only occasionally since it came out of the 1987 crash, returned to listing with a portfolio of business assets and has generally made good progress since. In a climate of property uncertainty, it’s this kind of business we fall back to.]


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Attribution: Company statements, story written by Bob Dey for this website.

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