Analysis and Commentary

Is Hills about to hoist a white flag?

Analysis and Commentary

The Australian manufacturing landscape is littered with the remnants of once-great manufacturers that abandoned local manufacturing and took to importing.

To finance types no doubt this offshoring path seemed like a good idea at the time, but in practice these companies have mostly gradually faded from view.

One such manufacturing icon – and here icon is no exaggeration – is Hills Limited which became a manufacturing powerhouse on the back of the rotary clothes hoist commercialised by ex-serviceman Lance Hill in 1945.

At one stage Hills had a turnover of more than $1.2 billion annually and employed 3,000.

It did successfully for a time diversify into security products, home electronics and even antenna manufacturing.

But today things are very different – it hasn’t been a manufacturer for 13 years and the Hills Hoist business has long since been hived off to an unrelated business Hills Home Living, which imports the hoist (pictured).

Hills Ltd is today a designer, importer and distributor of health care equipment for home, hospital and aged care use.

The company has been doing it tough in recent years, brought about partly by the Covid disruptions that upset supply chains during the pandemic.

Hills Ltd has over the past four years accumulated losses of $49.14 million, with the latest full year loss hitting $23.95 million.

In that time revenue has collapsed from $267.36 million in June 2019, to $47.26 million in the latest year.

Some life was breathed into the company with a $6.4 million capital raise in April, and a further $900,000 capital raise from shareholder Historical Holdings in May, which at the time appointed two directors to the board.

And the healthcare business itself has actually been performing well, with the company noting a record order book of $17.6 million, up 120 percent, in its latest half year, FY23 results.

But the company has also been dogged by a court dispute with a company called Stellar Vision Operations over a health technology solutions contract.

Hills Ltd originally won the case, but recently lost on appeal.

It is this loss which Hills said could have a ‘significant impact on the company’s financial position’ that is the straw that threatens to break the camel’s back.

The latest judgement in favour of Stellar means Hills could be required to pay $5.5 million exclusive of costs.

In the past week Hills shares have been suspended and the two Historical Holdings directors have resigned for the board.

This leaves a weakened Hills considering an appeal.

As the Adelaide local newspaper The Advertiser noted the company is ‘now a shell of its former self and fighting for its very survival’.

However the company is fighting on.

Hills Chairman David Chambers said in a statement that the remaining directors would ‘continue to focus on working together in the best interests of all shareholders and towards a negotiated settlement with Stellar Vision’.

Picture: Hills Home Living/The imported Hills Hoist no longer manufactured by Hills Ltd

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