Wellington, Aug 26 NZPA - Hellaby Holdings Ltd has reported a 11.8 percent rise in annual earnings before interest and tax on a 4.8 percent fall in revenue and is raising $28.4 million of new capital via a rights offer.

The owners of Hannahs and No1 Shoes retailers, automotive brands and packaging assets, said it had earnings before interest and tax of $20.3m in the year ended June 30, up $2.2m on last year.

The net profit after tax of $10.3m is up from $9.6m last year. The company said it reduced debt by 29.2 percent and increased free cash flow by $36m.

Hellaby announced a three-for-seven pro-rata renounceable rights offer to raise $28.4m.

The company's largest shareholder, Castle Investments, will subscribe for its full rights entitlement, and the remainder of the issue is underwritten by Forsyth Barr Group.

"Following this equity raise, we are confident that Hellaby will be appropriately capitalised in the current economic and trading environment and will be well placed to improve shareholder returns," chairman John Maasland said.

The board has declared a final dividend equivalent to five cents per share but is delaying payment until November 12 so it is paid after the rights issue.

The company renegotiated its banking facility maturity date with its principal bank Westpac in August for a further 12 month period and the facilities now mature on July 31, 2012.

The company said it has seen few "green shoots" of recovery to date.

"Our businesses are now so lean that we believe any improvement in sales will have a disproportionately positive impact on our profits going forward."

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