Adelaide-based Hills Limited snuck out a nasty little warning yesterday that revealed big losses for the once iconic Australian company (Hills Hoists, sold a couple of years ago).
Directors said the company is facing an $8.8 million statutory loss this financial year and has cut directors fees as a way of preserving cash.
Shares eased 2.8% to 18 cents, which is where the share price has been for most of the past year as some investors noticed the bad news.
Following a strategic review, Hills says it will get rid of its antenna and satellite business and not renew its contract with Foxtel to “reflect the declining profitability of the communications business and the continued fall in Foxtel volumes”.
Hills says it will now focus on its distribution and its health businesses supplying patient care systems, which delivered earnings of about $11.1 million in 2018-19, up from $7.4 million the previous year.
It will sell the Antenna business to another Australian company and has decided to close its manufacturing facility at O’Sullivan Beach in Adelaide.
Hills will incur a $6.3 million write-off this year for inventory and property, and impair $6.5 million worth of intangible and non-current assets, and will be up for redundancy costs of $1.4 million.
Its underlying profit is expected to be $500,000 before all these costs are counted.
Non-executive director fees will be cut from $80,000 to $60,000 and chair Jennifer Hill-Ling’s fees will be cut from $160,000 to $100,000.
“While we are disappointed by the write-downs to effect the required turnaround in performance and refocussing of the business, the results are starting to show, particularly in Health where profitable growth is very pleasing,” the chair said yesterday.
