Hills Holdings falls on FY loss

Group says huge writedowns weighed on result, a day after sale of steel business.

Hills Holdings (HIL) says its divestment plan is on track and believes it will see organic growth opportunities in its technology and communications segments in the coming year.

Reporting a day after it disclosed it would sell its Orrcon and Fielders steel businesses to Bluescope for $87.5 million, Hills posted a $94 million loss for the full year, sending its share price down 4.2% to $1.38 at 1057 AEST. 

The numbers were affected by a number of writedowns primarily at Orrcon ($41.8m) and Fielders ($38.6m) but also across existing and discontinued businesses including its healthcare division, its tank business, its antenna business, home and hardware and solar.

At a group wide level the company also booked restructuring costs at $31 million. Total impairments for the year were $154.6 million.

As the company divested busineseses over the year, revenue dropped from $967 million to $408 million. In the core remaining Electronics and Communications division, revenue rose 11.5 per cent to $376 million.

The company used the proceeds of business sales to pay down debt, with net gearing falling from 19% to 1.4% and net debt to $4 million.

Hills expected below trend economic growth in 2014 and would continue to focus on operating efficiency. It planned to add bolt-on acquisitions for its communications solutions business.

The company declared a dividend of 3.25 cents fully franked payable in September.