Can do better: Hills books loss, admits mistakes
Hills Limited has reported an $86 million full year net loss, and warned it would take some time for profit to return to expected levels.
Underlying net profit, removing one-off writedowns such as a $94 million non-cash impairment, was down 60 per cent on the previous year at $11 million.
In its full results announcement today, the Adelaide headquartered company admitted it could have better handled its “transition” from a pure manufacturing company to a services and distribution business.
“Our recent acquisitions are in line with strategy but we have not managed all facets of the integrations well,” the company reported.
“Our amalgamation of sites has caused supply chain issues, impacting adversely on our customers.”
You might like
Hills, which replaced CEO Ted Pretty with Grant Logan in a swift handover in May, reported an underlying net profit of $11 million and impairments of $94 million – both of which were flagged several weeks ago.
The result is a fall from the $24.8 million profit booked a year earlier.
Underlying net profit, removing one-off writedowns such as a $94 million non-cash impairment, was down 60 per cent on the previous year at $11 million.
Hills announced no final dividend.
Stay informed, daily
Logan said the focus of the company for the rest of the year would be to get “back to basics”, deliver outstanding customer service and make sure its supply chains worked at “optimum levels”.
It said that advanced building control and automation company Crestron had decided to take over local distribution itself – a decision that “will hurt us in FY16”.
“We have brought on new vendors such as Tyco and Vivotek but these will take time to grow,” Hill said.
Hills, the original manufacturer of the iconic Hill hoist, has undergone significant transformation in recent years, offloading manufacturing businesses in areas like steel, and diversifying into high technology products in security, health, audio-visual and communication.
It has also struck a long-term deal with Woolworths for Hills-branded household products to be sold under license.
Logan said today Hills’ restructure over the past three years had “substantially de-risked” the company’s balance sheet.
“The company is still a profitable company after the restructure and divestment, but most importantly, the earnings now come from the Technology and Health sectors where the risk profile is substantially reduced,” he said.
“However it will take further time to return the businesses to the profit levels we expect.”
The company would provide more information on the 2015/16 outlook at its AGM in November.
– with AAP
Want to see more stories from InDailySA in your Google search results?
- Click here to set InDailySA as a preferred source.
- Tick the box next to "InDailySA". That's it.
