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Hills issues profit warning

Apr 27, 2015
Hills products include a range of antenna.

Hills products include a range of antenna.

Technology group Hills has warned that its full-year underlying profit could be up to 40 per cent lower than expected, at between $11 million and $14 million.

The revised forecast is well below the $18.5 million to $19.5 million range flagged in February.

In a statement to the ASX today, the SA-based company said its results were usually strongest in the fourth quarter, but that was not expected to be the case this year.

“While sales to March in our core security, AV, audio and communications businesses were near internal forecasts, we now anticipate continued delays in project starts,” it said.

“This is due to lower government spending and project deferrals across the construction, health and mining sectors which have become more pronounced in April.”

Hills said it was continuing to make structural changes to the business to improve efficiency.

“The company’s strategic focus on security, AV, audio, communications and health technologies is sound and we remain committed to grow both organically and by acquisition,” it said in the ASX statement.

Hills, which has long been associated with the Hills Hoist, has undergone a significant transformation and repositioning in the past couple of years to focus on building its technology business. The restructure helped it turn around its results from the previous year to achieve a $28.4 million full-year net profit in 2014.

At the end of last year, Hills signed a 19-year deal with Woolworths for the retail giant to distribute more than 240 products under the Hills Heritage brand, including clotheslines and garden sprayers.

At the time, CEO Ted Pretty said the agreement would strengthen the company by boosting the “iconic brand” and enabling further focus on its strategy to be “Australia’s leading provider of technology solutions”.

 

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