Disappointing results now, better times to come: Hills Limited
Hills Limited has recorded a “disappointing” result for the 2018/19 financial year, but assures shareholders of better times ahead as it restructures its distribution business and focuses increasingly on the growing health services market.
In its annual report for the year to June released today, the Adelaide-headquartered company announced an improved small underlying net profit after tax of $0.5 million before one‐off items, and a statutory loss of $8.8 million.
The loss followed one‐off provisions and costs of $7.7 million related to the restructure of the distribution business, and a non‐cash impairment of $6.5 million of intangibles and non‐current assets following a review of asset-carrying values.
“While this was a disappointing outcome, we are confident that these one‐off impairments and provisions together with the implementation of our operational and strategic reviews will position us to deliver a material increase in profitability in the current year,” the report said.
“We expect to deliver an improved trading profit in FY20 and to position your company to resume paying dividends to shareholders, subject to the capital and growth requirements of the business.”
The former Hills Hoist clothesline manufacturer has dramatically re-invented itself in recent years from blue-collar manufacturer to communications provider and supplier of patient-nurse call systems in hospitals here and interstate.
“Our strategy over the past few years has been to establish Hills as a major player in the health market, providing best‐in‐class patient care systems, while continuing to enhance our distribution business,” the report said.
“That strategy has now paid off, with Hills Health Solutions the clear market leader in providing nurse call and patient engagement solutions to Australian hospitals.”
Hills Limited said its nurse call and patient engagement systems were now used in more than 40 per cent of Australian public hospital beds and more than 20 per cent of private hospital beds.
In May, the company was appointed sole Australian distributor of the GetWellNetwork interactive patient engagement platform and won the contract to place the system in Adelaide’s new Calvary Hospital, with more than 400 beds.
It also released the next generation of its own nurse call platform which was taken up by a Victorian hospital.
But the positive news was tempered by the “disappointing performance” of the distribution business, which provided audio, visual, security and IT systems and services in Australia and New Zealand and is being streamlined.
In April, the company began a strategic review of its business, which had led to the decision to “exit our underperforming Antenna and STEP satellite services businesses and to discontinue our contract to supply satellite dishes to Foxtel following declining orders”.
The company told investors on August 19 it would close its O’Sullivan Beach antenna factory by December 30, but had received a conditional offer to buy the antenna business assets “that will ensure our iconic Black Arrow range will continue to be manufactured in South Australia”.
The company said today that Hills Connection Services would continue to benefit from the NBN rollout and new partnerships with Downer EDI Limited and Lendlease Group promised stronger results for the new financial year.
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