We'll do the dishes: Hills re-signs its deal with Foxtel

Hills Holdings has re-signed a four-year deal to supply Foxtel with satellite dishes.

By InvestSMART · 14 Sep 2011

By InvestSMART ·
14 Sep 2011

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Hills Holdings has re-signed a four-year deal to supply Foxtel with satellite dishes.

HILLS Holdings has re-signed a four-year deal to supply Foxtel with satellite dishes.

Hills' electronic communications arm earned 30 per cent of the company's revenue last financial year, boosted by government contracts to install digital television in regional areas. Hills is well known for its hoist clothesline.

Managing director Graham Twartz said the satellite dishes were made in Adelaide, and the new contract proved that local manufacturing could compete against imports. The contract value depends on how many new customers Foxtel signs up. Most Foxtel customers receive pay television by satellite.

Mr Twartz said Hills did not install satellite dishes for Foxtel, but did have an installation contract with the regional pay television provider Austar. He said Foxtel's proposed Austar purchase would not affect the dish manufacturing contract. He hoped Foxtel would keep Hills' installation contract in country rural areas. Hills Holdings will enter the S&P/ASX 200 index on Friday following a recent rebalance.

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Frequently Asked Questions about this Article…

What is the new Hills Holdings and Foxtel agreement about?

Hills Holdings has re-signed a four-year deal to supply Foxtel with satellite dishes, continuing the companies' supplier relationship.

How significant is the satellite and communications business to Hills Holdings' revenue?

Hills' electronic communications arm accounted for about 30% of the company's revenue last financial year, helped by government contracts to install digital television in regional areas.

Are Hills' satellite dishes manufactured in Australia?

Yes. Managing director Graham Twartz said the satellite dishes are made in Adelaide and that the new contract demonstrates local manufacturing can compete with imports.

Does Hills install Foxtel satellite dishes or just manufacture them?

Hills manufactures the dishes for Foxtel but does not install satellite dishes for Foxtel. The company does, however, hold an installation contract with regional pay-TV provider Austar.

Will Foxtel's proposed purchase of Austar affect Hills' contracts?

According to Hills' managing director Graham Twartz, Foxtel's proposed purchase of Austar would not affect Hills' dish manufacturing contract. Hills also said it hopes Foxtel will retain its installation work in country and rural areas.

How is the value of the Foxtel contract determined?

The contract value depends on how many new customers Foxtel signs up, since most Foxtel customers receive pay television by satellite.

What is Austar and what work does Hills do for it?

Austar is a regional pay-television provider, and Hills has an installation contract with Austar to install satellite and digital television equipment in regional areas.

Has Hills Holdings experienced any recent changes to its stock market index status?

Yes. Hills Holdings was scheduled to enter the S&P/ASX 200 index on Friday following a recent index rebalance.