The market liked the modest improvement in earnings for Adelaide-based Hills Industries with the shares up 3.9% (slightly better than the overall rise in the market) or 13 cents to $3.46.
Earnings edged up 1.8% to $48.04 million, from $47.17 million in the 2007 year.
The company says it expects a satisfactory result this year, despite the spectre of high interest rates and fuel costs.
Chairman, Jennifer Hill-Ling said that the result was in line with the guidance given at the half year and represented "an excellent achievement in continuing the long term track record of profitable growth in difficult economic times."
"The second half EBIT result was an improvement of 9.8% on the same period in the previous year and a 5.7% increase on the first half.
"NotwithstaNnding this, profits have been adversely affected in the period due to higher cost, particularly freight and distribution.
"We are particularly pleased to have been able to maintain our dividend on the increased capital resulting from our Share Purchase Plan earlier in the year.
"These results are a testament to the strength of our businesses and confirmation that our strategy of diversification provides long term benefits to shareholders, she said in a statement to the ASX.
Looking to 2009, the chairman said in the statement:
"There has been much publicity regarding the uncertain macro-economic settings, including higher interest rates, higher fuel costs and the uncertainty surrounding capital markets.
"Many of our business units operate in markets that still exhibit growth, despite these factors. Those business included electronics, security, healthcare and Hills environmental products.
"We expect some improvements in businesses that have underperformed this year and the diversity of our businesses further mitigates the risks associated with these economic settings,” she said.
"Hills is not heavily exposed to the domestic housing cycle, and as such we expect a satisfactory result in the year ahead.”
(It moved away from dependence on the Hills Hoist a long while ago and has been expanding aggressively into the digital world through its electronics division)
Ms Hill-Ling said despite the adverse impact on profits of higher freight and distribution costs, annual revenue still increased 16.8% to $1.18 billion.
Sales in the company’s largest division, electronic security and entertainment, increased 12.2%.
Home, hardware and environmental product sales were up 6.1% while building and industrial products was up 5.5%.
Hills declared a final divided of 14 cents, taking the total for the year to 27.5 cents.
The company said its gearing (measured as debt to equity) was 43.8% at June 30 which remains below the target level of 45%.
"The significant increases in steel price made the management of working capital a key issue in the period and will be so in the next period.
"The principal bank facilities of the company are not subject to review until November 2010.
"The company will continue to pay around 100% of its after tax profit to shareholders in interim and final dividends. This policy is subject to the same conditions as previously advised and relies on the continued support of shareholders in relation to the Dividend Reinvestment Plans."
