Hills rolls through economic challenges
Adelaide-based manufacturer Hills Ltd reported a $24.8 million net profit despite “challenging conditions”.
“This result was achieved in very challenging market conditions across the building and construction sector with improvements in revenue from the group’s continuing Hills Technologies Segment,” the company’s full year financial report said today.
Hills Group Managing Director and CEO Ted Pretty said the result reflected well on the company’s recent strategic restructures.
“Our restructure of Hills by exiting businesses non-core to its future and closing unprofitable businesses is now largely complete,” he said.
“Hills is now firmly focused on businesses which can deliver higher returns.
“We are concentrating on opportunities as an integrated solutions provider in the technology and communications market segments, with a particular but not exclusive focus on security and health care technologies.”
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In the 2014 financial year Hills completed the sale of Orrcon and Fielders to BlueScope, the sale of UHS Systems to UTC, and Opticomm to a Hills joint venture partner.
Acquisitions by the group during the financial year included Merlon (nurse call), HTR (patient entertainment), Questek (nurse call), Open Platform Systems (security), Intek (security) and APG (audio products).
Hills sold various company-owned properties during the year using the proceeds to retire debt, make new acquisitions and to buy back Hills shares.
Hills said it is in discussions with its bankers regarding the refinancing of its entire debt facility on better commercial terms, aimed at giving it capacity for further acquisitions.
The board declared a fully franked final dividend of 3.60 cents per share, a total of 7 cents for the full year.
The share buy back pulled around five per cent of the stock back into the company.
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“The Hills Board is of the opinion that the current price for the company’s shares does not necessarily reflect the underlying value of our assets, our business capability and our strong capital position,” Pretty said.
“On 15 August 2014 we announced our intention to refresh the company’s ability to undertake an on-market buyback.
“The extension of the buyback provides Hills with the option to acquire shares up to ten per cent (10%) of the issued capital during the next 12 months. Any buyback will not affect the dividend policy.”
Hills, the company almost always associated with the Hills Hoist and its swings and play gyms, says it move into a new technology-based strategy is key to its success.
“The strategy of the company remains based on creating value by being focussed on delivering technology based solutions into trusted government, enterprise, business and residential markets.
“This includes supplying access control and video security, automation and control, audio visual and lighting solutions into hospitals, aged care facilities, schools, universities, banks, retailers, public transport and private logistic providers.”
In the company’s outlook, Pretty said Hills would be able to cope with a lacklustre commercial construction sector.
“While the continuing subdued commercial construction sector does impact building-related technologies, Hills remains very well positioned for the year ahead,” he said.
“We have entered FY15 with a very strong balance sheet, reduced structural and operating complexity and a lower operating risk profile.
“We have ample capacity for further acquisitions that are accretive to our core and or offer medium to long term growth opportunities.”
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