Hills said the company is well positioned to emerge from the COVID-19 environment in a strong competitive position, citing efforts to strengthen its balance sheet, review inventory levels and the streamlining of its operations, as well as the resilience of core markets.
According to the company, one-off costs relating to COVID-19 were partially offset by ongoing cost reductions, including a reduction in wage expenses and the support of the Government’s JobKeeper programme.
“The relative resilience in our key markets and the material improvement in our balance sheet, help position the group to navigate a continuing period of disruption and emerge in a strong competitive position,” said Hills’ chief executive and managing director, David Lenz.
“Like all companies, Hills was forced to adapt quickly to the challenges presented by COVID-19 pandemic, however, we have remained absolutely focused on our strategic priorities – investing in health, streamlining distribution and strengthening our balance sheet.
“As a result, we have not only weathered what we hope is the worst of the storm, we are in a strong position to cope with future challenges and to capitalise on any economic recovery,” Lenz said. “While conditions remain uncertain, our core markets have proved relatively resilient and we have seen a solid trading start to FY21.”
Hills said it expects a small loss in the FY2020 financial year of around $A6.5 million as a result of one-off COVID-19-related costs, which include adjustments for foreign exchange, redundancies and inventory provisions. This represents a slight improvement from the $A8.8 million statutory loss after tax in FY2019.
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