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Hills suffers $85.9 million net profit loss

Hills suffers $85.9 million net profit loss

Former vendor's decision to take on its own distribution has hurt the business along with supply chain issues

ASX-listed Hills has reported a net profit loss of $85.9 million for the 2015 financial year.

Revenue was also down from $737.2 million to $427.8 million in FY15.

The loss was due to $94 million booked in respect of goodwill, other intangibles, deferred tax assets and freehold property, Hills said in its ASX statement.

The distributor flagged that its former vendor, Crestron’s decision to take on the task of distributing its own products would continue to hurt Hills in FY16. Recent partnerships with Tyco and Vivotek will take time to grow.

Amalgamation of sites has caused some supply chain issues for the distributor, which impacted its customers.

It also indicated that it hasn’t managed all facets of the integration work very well from its multiple acquisitions recently such as HTR, Merlon, Questek and HosTel.

Hills CEO, Grant Logan, said the company was still profitable after going through its three-year restructure and divestment, but will take time to return the business to the profit levels it expects, as it focuses now on the technology and health sectors.

“Getting back to basics, delivering outstanding customer service and making sure our supply chain works at its optimum levels will be the core focus for the remainder of the 2015 calendar year,” Logan said.

It will be focusing on operational performance in FY16 and will be directing its attention on customer engagement, vendor relationships, staff training, tight capital management, margin improvement and acquisition growth in A/NZ.

Read more: Hills nabs Ruckus Distie of the Year

The distributor secured a $110 million three-year core banking facility.

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