HILLS Security, Surveillance and IT business, (comprising the Group’s largest division) had a solid first half, delivering 4 per cent growth over the corresponding half in FY17 while maintaining similar margins.
Hills Enterprise business won a number of projects during the period including:
• Supply of Vivotek IP cameras at Sydney Trains with Indra Australia;
• Working with Siemens supplied Genetec unified IP security solutions and AXIS IP Cameras to Woodside Petroleum HQ Perth
• Supply of AXIS IP Cameras and Ipsotek analytics through SAAB for Queensland Corrections.
This success was fuelled by growth in many of Hills key vendor sales including Genetec, UTC, Axis, Pelco, Vivotek and TruVision.
The Hills IT business had very strong sales in the first half, with networking vendors Ruckus, Brocade and Extreme Networks all achieving growth.Hills Australian SMB business and Hills New Zealand (NZ) are both expected to strengthen their performance in the second half.
“It was encouraging to see the growth in the largest part of Hills business in the first half,” Hills’ MD and CEO David Lenz said. “With the successful launch of our new distribution centre and e-commerce platform, we expect to see continued growth in the current half.”
In other parts of the business Hills Health business continued its momentum with strong Nurse Call sales, which grew 23 per cent over the previous corresponding period. This was offset partially by a slight decline in Patient Entertainment revenue, however, overall margin quality improved in the first half.
Hills continued to win key contracts in the first half of FY18, including Royal Hobart Hospital (Nurse Call and Infant Protection System) and 2 Baptcare Nurse Call contracts. Hills Audio Visual (AV) business saw revenues decline slightly, but has maintained solid margins, limiting the profit impact.
Hills has successfully launched its market leading e-commerce platform across Australia and New Zealand.
Lenz said the launch of the new e-commerce site ushered in a new era in customer service at Hills.
“Early indicators are we would expect to see a sales uplift of over 10 per cent based on similar system deployments in the ANZ market and a similar improvement in overall productivity,” he said.
Meanwhile, the new national distribution centre continues to deliver improved operational and customer service benefits and we expect to gain further productivity improvements within the facility.
Overall revenues fell by $A21 million, while debt also fell by $4 million, and cash flows increased by $8 million. The revenue decline was due primarily to exiting an unprofitable NBN satellite installation business ($13m) and a shortfall in antenna sales ($5m) due to the competitive Pay TV landscape.