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Jobs go as Hills closes last SA manufacturing plant


Iconic local company Hills Limited will close its last manufacturing plant in South Australia by the end of this year, it announced today.

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The Adelaide-based former Hills Hoist clothesline manufacturer told investors this morning that it would close its O’Sullivan Beach antenna factory by December 30.

It also revealed a $1.4 million redundancies bill from the 2019 financial year, which includes the cost of terminating the O’Sullivan Beach facility staff.

Australian Manufacturing Workers’ Union SA secretary Peter Bauer told InDaily this morning that the company employs 14 people there, six of which are expected to be redeployed to a separate antenna manufacturing business – although their fate is not yet certain.

Hills said it had received a conditional offer from an undisclosed party to buy the antenna business in its announcement to the Australian Stock Exchange today.

Hills was once a noted Australian manufacturer, employing hundreds at its former Edwardstown base.

The company says it now has 60 employees in South Australia – including the O’Sullivan Beach staff to be made redundant or redeployed.

Hills also announced this morning that:

Meanwhile, the company has decided to slash the remuneration of its board, “to bring fees in line with similar sized companies”.

Effective last month, the chair fee has been reduced from $160,000 to $100,000, non-executive directors’ fees were reduced from $80,000 to $60,000 and the audit committee chair fee was reduced from $16,000 to $10,000.

“The board will continue to review its membership, skill requirements and size in light of the strategic review,” the market update reads.

“At this time, Hills has no plans to increase the number of non-executive directors above four.”

In June, Alan Kinkade AM resigned from the board due to “increased time pressures from his other commitments”, but agreed to act as a consultant for the Hills Health business.

He was not replaced.

Hills has been undertaking a formal review of the various arms of its business.

“As a result of the strategic review, Hills has taken the decision to increase focus on its growing and profitable health business, which provides patient care systems for hospitals and health care facilities,” the market update reads.

“In addition, the distribution business, which provides audio, visual, security and IT systems and services for customers in Australia and New Zealand, will be streamlined.”

Preliminary unaudited earnings before interest, tax, depreciation and amortisation (EBITDA) from today’s Hills ASX market update.

Hills chair Jennifer Hill-Ling told the Australian Stock Exchange that: “The results of our strategic and operational reviews will restore sustainable profitability and ensure the market correctly values the company for the benefit of all shareholders.”

“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,” she is quoted as saying.

“We will provide a further update to shareholders on the strategic review as appropriate or at the annual general meeting (in Adelaide 8 November 2019).”

Hills CEO and managing director David Lenz said in a statement that the distribution business was expected to return to profitability “as early as the first half of the 2020 financial year”.

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