Hills earnings expectations “slightly higher”
Hills Holdings confirmed today its full year earnings would come in slightly above expectations.
Adelaide-based Hills makes electronics and lifestyle products, including the Hills Hoist
clothesline.
“The market consensus…was in the range of $16.1 million to $18.6 million net profit after tax; the company now expects (earnings) to be slightly higher than the top end of this range,” the company said in a statement to the stock exchange.
Hills said it also expected to declare a dividend at the time of the full year results release in August.
“The degree to which the dividend will be franked, if at all, is subject to the outcome of a Private Binding Ruling which the Company is seeking from the Australian Taxation Office,” it said.
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Hills continues with its restructure and transformation program and last week announced it had sold its Bailey Ladders division to the privately held Werner Co. for an undisclosed sum.
Werner Co. is the world leader in the manufacturing and distribution of ladders, climbing equipment and ladder accessories.
“The Hills Group continues to operate very comfortably within its banking covenants with little net debt as at 30 June 2013,” the company statement said.
The proposed sale of its Orrcon and Fielders steel assets has been put on hold.
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“The Board has now determined that based on progress with the sales process and market interest, these assets will now be classified as ‘held for sale’.
“Orrcon and Fielders were reported as part of the Group’s Building & Industrial segment.
‘These will now be reported as discontinued operations for the full year just ended 30 June 2013.”
Accounting standards require that a non-current asset or disposal group is classified as held for sale if its carrying amount will be recovered through sale rather than continuing use.
The standards require that these assets are measured at the lower of their carrying value and fair value less costs to sell.
“As a result of the fair value measurement requirement for Orrcon and Fielders as set out above, other associated impairments, accelerated transformation activities and gains or losses on the disposal of businesses, the total net charges for the year are expected to be approximately $155 million.”
In his outlook for the company, Hills Managing Director and CEO Ted Pretty said Hills low debt position places it take advantage of growth opportunities.
“Although we expect the market in FY14 to remain challenging in line with the Reserve Bank’s observations in May and June that growth of economic activity is likely to remain below trend, Hills is very well positioned,” he said.
“We enter the new financial year with little to zero net debt and we expect to build positive momentum over the period.”
