HRL HOLDINGS LIMITED
Appendix 4D December 2018 Half-Yearly Final Report Results for Announcement to the Market
1. Company Details and Reporting Period
Name of Entity:
HRL Holdings Limited
ABN:
99 120 896 371
Reporting Period:
31 December 2018
Previous Corresponding Period:
31 December 2017
$
Revenue from ordinary activities up 28% to:
14,103,845
Net loss for the period attributable to members down to:
4,225,925
No dividends were paid or payable during the period.
2. Results for Announcement to the Market
Refer to pages 1 to 5 of the Financial Statements for the operational and financial review of the Entity.
3.
Statement of Comprehensive income with Notes to the Statement
Refer to Page 8 of the December 2018 Financial Statements and accompanying Notes.
4.
Balance Sheet with Notes to the Statement
Refer to Page 9 of the December 2018 Financial Statements and accompanying Notes.
5.
Statement of Cash Flows with Notes to the Statement
Refer to Page 11 of the December 2018 Financial Statements and accompanying Notes.
6.
Dividends
No dividends were paid or payable during the period.
7.
Statement of Changes in Equity
Refer to Page 10 of the December 2018 Financial Statements and accompanying Notes.
8.
Net Tangible Assets per Security
Dec 2018 $0.0176
Dec 2017 $0.0222
9.
Entities over which Control has been Gained or Lost during the Period.
Not applicable.
10.
Associates and Joint Venture Entities
Not applicable.
11.
Other Significant Information
Not applicable.
12.
Accounting Standards used for Foreign Entities
Not applicable.
13.
Status of Audit
The attached December 2018 Financial Statements have been reviewed.
14.
Dispute or Qualifications if not yet audited
Not applicable.
15.
Dispute or Qualifications if audited
Not applicable.
Paul Marshall
Company Secretary 8 February 2019
HRL HOLDINGS LIMITED
INTERIM FINANCIAL REPORT
FOR THE HALF-YEAR ENDED
31 DECEMBER 2018
Dear Shareholders,
Introduction and 6 months in review
The first 6 months trading of the FY2019 year has been a mixed success. While the financial results reported for the period were impacted in some sectors by difficult trading conditions, the Directors and I hold a positive view for the future. The underlying EBITDA of $711k was down by $718k on the prior year period. The largest notable impact to the results came from the change in methamphetamine contamination testing standards in NZ. We are working hard to replace the sales and earnings through growth in other testing with Analytica achieving revenue of $6.051m (+21% vs PCP $4.986m) and EBITDA of $1.556m (vs PCP $1.577m) on a proforma basis. Although we have enjoyed overall revenue growth of 21% through Analytica, it hasn't been at the same margins contributed by the methamphetamine testing. Some of the tests are from more competitive markets or have higher consumable costs (such as the DNA based tests). New tests launched also have higher operating costs until they reach substantial scale.
The Analytica Laboratories acquisition reached it's 12 month anniversary at the end of November and recorded a 12
month post settlement EBITDA of NZD$5.58m. Total overall consideration paid to the vendors will therefore be on a 5.1x EBITDA multiple. The performance of this business unit has been exceptionally strong, with all testing areas other than the methamphetamine division showing revenue growth in the past 6 months over the prior year period, including:
Environmental +55%
Dairy and milk testing +29%
Honey +32%
Authenticity and trace origin +85%
Methamphetamine down -43%
The HAZMAT division was adversely impacted by the substantial decrease in methamphetamine sampling work in NZ. The Geotechnical division is continuing to find trading conditions competitive, although it still managed to post a small revenue increase of +2% on the prior year period.
Profitability Actions being Undertaken
While we are chasing down additional growth in new and existing service lines, we have implemented several cost reduction actions as follow:
Consolidate Gold Coast Geotech and HAZMAT facilities to one single site
Invested in automation and technology improvements to reduce laboratory operating costs
Restructured Precise NZ business, including transition of laboratories to Analytica branding and management
Operational highlights
Expansion of environmental testing capability into Australian operation, under Analytica oversight
New technology platforms being developed to improve laboratory customer interface
CAIQTEST Pacific achieved full CNAS accreditation in late December
New laboratory facility secured for FoodLab dairy JV with recruitment globally for a GM underway currently
Outlook for the remainder of FY2019
The Group will continue to focus on growing its core business of providing laboratory, consulting and information services to its customers through:
Leveraging off Analytica intellectual property and know how to enter new service lines in both Australia and New Zealand;
Utilising new equipment, technology and software platforms to improve efficiencies and margins;
Focussed business development plans to target new customers and protect the existing customer base;
Continued focus on cross selling opportunities across all business units;
Geographical expansion into new markets when justified; and
Using the OCTFOLIO software platform to target new customers and provide enhanced service offerings to existing customers of the other business units.
In closing, I would like to take this opportunity to thank our Chairman and Board for their guidance over the past 6 months and also thank all of the HRL Group's employees for their dedication and hard work.
I look forward to keeping you updated on our progress in FY2019 and the ongoing transformation of HRL into one of
Australia's and New Zealand's leading testing, inspection and certification groups.
Steven Dabelstein
CEO
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HRL Holdings Ltd. published this content on 08 February 2019 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 07 February 2019 21:54:09 UTC