Hellaby repeats warning

Press, 30 April 1981, Page 19

Hellaby repeats warning

The shareholders of R. and W. Hellaby, Ltd, were warned yesterday not to let Allied Farmers’ Co-opera-tive, Ltd, take their shares at an absurdly low value. In addition, Hellaby's managing director, Mr Alan Hellaby, told an extraordinary general meeting of the company that Allied's lack of management experience in the meat industry would jeopardize Hellaby’s overseas markets. The meeting had been called to approve defensive moves against a take-over offer by Allied Farmers for Hellaby. After 10 years of restructuring and planning market development, Hellaby was on the threshold of a new period of expansion’and much improved profitability, he said.

The benefits were rightly theirs, he told the shareholders.

Mr Hellaby described Allied's claims of experience in meat exporting as ridiculous. Its recent management changes did not indicate any planned strategy for an entry into the meat industry, but showed a serious lack of indepth management and experience, he said. Allied had seemed to overlook many crucial aspects of the meat business when assessing its ability to obtain sufficient stock to operate the Hellaby works. •- Hellaby’s. business was founded on buying' livestock on its own account direct from the farmer, processing; it, and sellng it in the best possible manner. It was through • this expertise it made its profits. Its direct competitors were two overseas- com-, panies, Borthwicks and Vesty, and the Farmers Cooperative movement. To survive and expand the company had to be particularly efficient. The company, was well balanced, with a strong domestic base, efficient processing centres, and total control over all its export marketing, Mr Hellaby said. Its position had forced the company to become the principal New Zealand-owned company influencing livestock schedule prices, and Allied, with its very limited export experience, could not take up this role. The security of Hellaby’s business future was now assured with the commissioning of the Taumarunui works, Mr Hellaby said.

Since March 1, when Taumarunui had come into profit for the first time and the local livestock market came into line with United States levels, the company had returned to levels 61 profitability in keeping with expectations.

The company’s advisers had predicted that earnings could reach $6.2 million in the year to September 30, 1982, and this was possible with reasonable international trading. The figures for March and April confirmed this prediction, said Mr Hellaby. ' All. sections of the company were trading profitably and throughput by weight .was ahead of last year.

The outlook for export markets was sound and the company was well protected with market contracts.

With building programmes completed and nothing planned until consideration

of the end of mutton killing at Shortland in three years, the management was concentrating on increasing througput, increasing processing and efficiency. Although Hellaby’s had the management skills to achieve its current goals, Mr Hellaby was sure that Allied did not have them.

“The only conclusion that I can draw from Allied’s intentions is that they thought this company as purely a speculative buy at a time when our share values were exceptionally depressed,” he said. “I am sure that they knew that, once our losses on the beef market were brought under control, this company was on the threshold of a period of exciting growth and much greater profitability.’

“They want that advantage for themselves, but they obviously have no plan as to how to operate the company