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HILLS HOLDINGS LIMITED (HIL)

HILLS HOLDINGS LIMITED (HIL)

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General Information
Company Name: Hills Holdings Limited
Stock Code: HIL
Website: www.hills.com.au
GICS Sub-Industry: Building Products
Market Cap ($M): 255
Equiv. Shares (M): 246

Current Price Data+
Current Price Open High Low Last Close Volume Price Movement
$ 1.035 $ 1.035 $ 1.045 $ 1.030 $ 1.035 92,537 0%

Current Broker Consensus Recommendation more
Recommendation: Hold
Recommendation Date: 7th Dec 2011
12 Month Target Price (average): $1.13
Brokers Surveyed: 2

Company Overview

Business Description:
Hills Holdings Ltd (HIL, formerly Hills Industries Ltd) manufactures, imports and distributes electronics, home, hardware, building and industrial products in Australia and overseas. HIL's businesses operate in three market segments; Building and Industrial, Lifestyle and Sustainability, and Electronics and Communications.

Strategy Analysis:
The strategy is to develop competitive businesses in three main industry segments: Electronics & Communications, Lifestyle & Sustainability, and Building & Industrial Products. The company diversifies to minimise the effects of short-term changes in individual markets and economies, and aims to be a product innovator and a market leader. The overall objective is to grow revenue and earnings incrementally through a combination of organic growth and acquisitions in market segments with attractive growth potential. Hills Holdings reported a net loss of $74.96m for the year ended 30 June 2011. Revenues from ordinary activities were $1.1bn, down 5.2% from last year. Diluted EPS was (30.1) cents compared to 16.7 cents last year. Net operating cash flow was $12.98m compared to $101.55m last year. The final dividend declared was 4.5 cents, taking the full year dividend to 10.0 cents compared with 12.5 cents last year.


Financial Summary
Year to Jun NPAT EPS EPS chg (%) PER DPS Yield (%) Franking (%)
2013  F 26.9 10.9 12.7 9.5 9.0 8.7 100.0
2012  F 23.9 9.7 -4.9 10.7 9.0 8.7 100.0
2011  A 25.3 10.2 -37.1 18.5 10.0 5.3 100.0
Source: Morningstar analyst estimates.

Peer Comparison
EPS Growth (%) P/E (%) Dividend Yield (%)
Company Mkt Cap 2011 A 2012 F 2013 F 2011 A 2012 F 2013 F 2011 A 2012 F 2013 F
GWA Group (GWA) $727 M 0.2962 -0.1773 0.1142 11.5477 14.0361 12.5980 0.0747 0.0747 0.0747
Hills Holdings (HIL) $255 M -0.3901 -0.0412 0.1443 10.1570 10.5937 9.2576 0.0966 0.0966 0.0966

Market Comparison
Earnings P/E Ratio P/B Ratio P/E Growth P/S Ratio
HIL 1.04 10.42 0.67 2.20 0.23
Market 0.82 12.5 1.38 1.18 1.90
Sector 1.05 11.7 0.99 0.53 0.52

Directors
Name Position Start Date
Mr Graham Lloyd Twartz Executive Director,Chief Executive Officer,Managing Director 08 July 1993
Jennifer Helen Hill-Ling Non-Executive Chairman 21 August 1985
Mr David Moray Spence Non-Executive Director 01 September 2010
Mr Peter William Stancliffe Non-Executive Director 01 August 2003
Mr Matthew Campbell Non-Executive Director 19 December 2011
Mr Ian Elliot Non-Executive Director 01 August 2003
Ms Fiona Bennett Non-Executive Director 31 May 2010

Management
Name Position
Steve Cope CEO - Electronics & Communications
Grant Logan Chief Financial Officer
Mike McKinstry Chief Operating Officer
Rachel Rees Company Secretary
Tony Sullivan Group General Manager Strategy

Substantial Shareholders
Holding Name
13,455,689 (5.40%) Hills Associates Ltd
20,286,335 (8.14%) Poplar Pty Ltd
22,581,156 (9.06%) RBC Dexia Investor Services Australia Nominees Pty Limited <PIPOOLED A/C>

Calendar of Events
Date Event
28 September 2012 Report (Annual)
20 September 2012 Report (Annual)
21 August 2012 Report (Interim)
21 August 2012 Report (Prelim)
22 February 2012 Report (Interim)
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