Project delays set to impact Hills financial results

Project delays set to impact Hills financial results

It has revised its underlying net profit to sit between $11 million to $14 million for the full financial

ASX-listed Hills (ASX:HIL) has revised its second half earnings for the 2015 financial year after experiencing project start delays.

It has revised its underlying net profit guidance for the full year to range between $11 million to $14 million as a result.

In a statement to the ASX, Hills stated that lower government spending and project deferrals across the construction, health and mining sectors became more pronounced during April.

“Margins declined materially in March and we expect this trend to continue in the period from April through June, in part because we have not been able to recover margin compression flowing from the significant year-on-year decline in the Australian dollar,” Hills stated.

“In prior years, the company’s results have typically been strongest in the fourth quarter, but based on results for the first three weeks of April, and a re-examination of the sales pipeline, this is not expected to be the case.”

Hills said it would continue to accelerate its efforts to reduce group overhead and drive further structural efficiencies in its core business.

“This includes removing additional fixed costs that have been maintained in anticipation of a large acquisition, but it will continue to invest in front line sales and services resources,” Hills said.

Fees paid to non-executive directors will also be reduced 20 per cent as of May 1.

“The company will also look to capture some upside from extensions to existing contracts for satellite and fixed wireless services, and will continue to participate in tenders for other installation service contracts,” Hills said.

“The company’s strategic focus on security, AV, audio, communications and health technologies is sound and we remain committed to grow both organically and by acquisition.”

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