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Hills to post third straight annual loss

Business

Technology firm Hills says it will make another loss this financial year, due to the costs of a restructure and its scrapped plans to demerge its health technology business.

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Hills is forecasting a net loss of between $6 and $8 million for the year to June 30, an improvement on the previous financial year’s $68 million loss, and a $86 million loss in the year before that.

Best known as the maker of the Hills Hoist, the company has since 2013 moved away from manufacturing to become a distributor of security systems, audio visual equipment and health technology.

The Hills line of household products is now licensed to Woolworths.

Hills said its cashflow in the second half of the 2016/17 year had been impacted by restructuring costs and charges associated with its plan to demerge its health business.

Hills Health, which provides communications systems for hospitals, was to merge with another health technology business Lincor, and the merged company was to be listed on the share market.

But the listing was deferred in November 2016 due to market volatility, and the merger shelved in January.

Hills said today that profits in the health business were growing, and coupled with cost reductions and strong customer relationships, would help it make a profit in 2017/18.

“The operating cash flow is currently targeted to be neutral for the second half of FY17 inclusive of restructuring costs and charges associated with the proposed Lincor transaction [a contract to provide inpatient beds with Lincor Patient Engagement Systems], which were paid in the second half,” Hills CEO David Lenz said in a statement.

“Given our investments, the reduction in operating expenses, strong customer and vendor relationships and increased profitability in the Hills Health business, we expect to return to profitability in FY18.”

Shares in Hills, which have fallen 91 per cent in the past three-and-a-half years, were up one cent, or 6.1 per cent, at 17.5 cents at 1144 AEST.

-with AAP

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