‘Satisfactory’ I suppose is the way the interim result from Hills Industries should be best described.

It’s what the company said about the result and the outlook for the rest of the 2007 year.

Hills is a more complex beast these days: it’s no longer the maker of the iconic Hills Hoist: That’s still there but no longer the reason for its being.

After tax earnings up 12 per cent, a little faster than the 7.9 per cent rise at the pre-tax level and expectations of “satisfactory results for the full year.”

First half net came to $23.94 million, compared with $21.37 million for the previous interim period of 2006. This was after the rise in pre tax to $36.68 million from $34 million.

The latest result was struck on an 8.2 per cent rise in revenues to $511 million from $472 million. It was the first revenues had risen above half a billion dollars in an interim period.

Directors said the company “remained committed to its current dividend policy and would continue to pay around 100 per cent of it’s after tax profits to shareholders as interim and final dividends.”

To this end, Hills will pay an interim dividend of 13.5 cents per share, fully franked, compared to from 13 cents previously.

Earnings per share rose to 14c a share from 12.9c and the company said that the ration was kept as close to 100 per cent as possible.

CEO David Simmons said “Our policy hasn’t changed – we pay out around 100 per cent of earnings and in the last couple of years we’ve paid a little over 100 percent.

“If we’re within a point or two of 100 percent, plus or minus, we’re happy. It certainly shouldn’t be interpreted as any progressive reduction.”

And he said the company’s dividend re-investment program was being strongly supported by shareholders.

“We’ve had pretty consistent support of about 40 to 45 percent. The main reason is we’ve now got around 22,000 shareholders, whereas in the early days of the plan we had larger institutions, whose decision whether or not to reinvest could change the support level significantly.

“We’re relatively relaxed the plan will continue to get support.”

Hills operates in three areas: home and hardware, electronic security and entertainment and building and industrial products.

Its home, hardware and eco products division was the best performer with a 30 per cent rise in EBIT; the building and industrial products division saw EBIT rise 8.4 per cent; an EBIT in the electronic security and entertainment division rose by 7.6 per cent.

Mr Simmons told the Corporate file briefing on the ASX that in the first half “we experienced more of a cost-margin issue than any direct impact on consumer spending from interest rates.”

“Last year we had a lot of volatility in commodities from steel to oil-based products like plastics, which was very difficult to manage in terms of the short-term recovery of cost increases.

“In the first half, oil prices were actually down in comparison with six months before, albeit not dramatically, so our challenge was to drive down the inputs that have oil as their base. When commodity prices group, the increases come rapidly but when they come down, you’ve got to chase them.

“The other big issue has been transportation costs. We’ve had fuel surcharge levies applied across our businesses, and we’re working to make sure we get them aligned to where fuel prices are.

“Our business isn’t one that’s directly impacted by the vagaries of weather patterns but one potential risk to our earnings would be consumer confidence – it doesn’t take much to shake the level of confidence.

“Another risk is posed by the skills shortage, in that fabrication work associated with many of the major infrastructure projects could be done offshore and shipped in. It’s fabrication in Australia where we see opportunities, particularly in our Building and Industrial Products business.”