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Investment company Hellaby Holdings forecasts a first half profit fall of as much as 43 percent due to depressed and volatile trading conditions, although the full year is expected to be about the same as last year.
Hellaby expects an operating profit of $16.5-$20.5 million in the six months ending in December, compared with $28.7m last year.
The full year is expected to be about $59.1m, broadly in line with last year, and the company will hold its interim dividend at 9 cents per share.
It said the New Zealand economy was growing, but the rural sector had been depressed to flat, while Australian economic conditions and confidence remain depressed.
In addition, it said the oil and gas business had been volatile, with variable conditions in the United States, while major Middle East economies and refineries had been affected by weak oil and gas pricing and it expects the volatility to continue for the remainder of the financial year.
Specificially, Hellaby said the automotive division had seen an improved first half, but that was more than offset by weakness in the oil and gas services division, reduced sales in the equipment division and a steady decrease in its footwear division, which is currently for sale and includes the Hannahs and Number One Shoes brands.
Newly appointed managing director Alan Clarke said the group's core divisions were expected to show significant growth in the second half of the financial year, while a strong balance sheet created opportunities for further expansion in key markets.
"In my first month of getting to know the Hellaby business I'm impressed with what I've seen. There is an opportunity for targeted expansion in our key markets funded by the recycling of capital from the rationalisation of some assets."
