Ann: Letter to Shareholders, page-2

In this letter to Shareholders, Chairman Jennifer Hill-Ling draws a parallel between the decline in the competitiveness of Australian manufacturing, and a decline in the fortunes of Hills Limited, formerly an iconic Australian manufacturing company.

Three years ago the company embarked on a restructure of its operations, selling under-performing manufacturing assets and acquiring  businesses in the higher-yielding services sector including Security, Audio-visual and health services.

The FY 2015 results include the following outcomes:

• Revenue was $427.8 million, down from $737.2 million
• There were accounting impairments (non-operating items) of $97 million for the year.
• Although the Underlying NPAT was 11.1 million. the impairments resulted in a Statutory Net Loss of $85.9 million.
• Net debt is $32 million (19%)
• There is a $110 million 3 year banking facility available.
• Staff numbers have been reduced by 67% from 2,642 in FY 2012 to 862 in FY 2015.

At present the share-price is still in a down-trend, but at 40 cents, value investors will no doubt be looking at the stock as one that could transition into a profitable uptrend.