Hills Limited has reported a full-year net profit $24.8 million off the back of improvement in its technologies division.
The Company's FY14 underlying NPAT1 was $27.3M. This was before acquisition transaction costs expensed during the period and before one-off income tax credits associated with business sales.
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According to a company statement, the result was achieved in very challenging market conditions across the building and construction sector, with improvements in revenue from the Group's continuing Hills Technologies segment.
Hills Group managing director and chief executive, Ted Pretty, said the FY14 underlying result is in line with guidance provided to the market recently and further reflects our success in delivering on Hills new strategy.
"Our restructure of Hills by exiting businesses non-core to its future and closing unprofitable businesses is now largely complete," he said.
"We continue to drive new initiatives and programs to improve group operations." he said.
Pretty said Hills was now firmly focused on businesses which could deliver higher returns.
"We are concentrating on opportunities as an integrated solutions provider in the technology and communications market segments, with a particular but not exclusive focus on security and health care technologies," he said.
"Asset sales and acquisitions during FY14 included Hills completing the sale of Orrcon and Fielders to BlueScope; the sale of UHS Systems to UTC; and Opticomm to a Hills joint venture partner."
Acquisitions by the Group during the financial year included: Merlon (nurse call); HTR (patient entertainment), Questek (nurse call), Open Platform Systems (security), Intek (security) and APG (audio products).
Hills progressed the sale of various company-owned properties during the year converting their asset carrying values to cash which was put towards retiring debt, new acquisitions, other innovation investment and to buy back Hills shares.
On February 28, Hills announced the completion of the sale of its Orrcon and Fielders steel assets to BlueScope Limited for $80 million.
Net cash at 30 June 2104 was $8.5 million, with total debt facilities in place of $202.7 million.
According to a company statement, Hills has capacity for further acquisitions in line with its strategic and financial objectives.
"Hills is in discussions with its bankers regarding the refinancing of its entire debt facility on better commercial terms and securing a new facility which will provide ample capacity for further acquisitions," according to a statement.
The Board declared a fully franked dividend of 3.60 cents per share which will be paid on September 26.
Pretty said the Hills Board was of the opinion that the current price for the Company's shares does not necessarily reflect the underlying value of our assets, our business capability and our strong capital position."
"On 15 August 2014 we announced our intention to refresh the Company's ability to undertake an on-market buyback," he said.
"The extension of the buyback provides Hills with the option to acquire shares up to ten per cent (10 per cent) of the issued capital during the next 12 months. Any buyback will not affect the dividend policy."
According to a company statement, the strategy of the Company remains based on creating value by being focused on delivering technology based solutions into trusted government, enterprise, business and residential markets.
Pretty said the company remained very well positioned for the year ahead.
"We have entered FY15 with a very strong balance sheet, reduced structural and operating complexity and a lower operating risk profile. We have ample capacity for further acquisitions that are accretive to our core and or offer medium to long term growth opportunities.
Hills current guidance is for an underlying FY15 NPAT $22-24M.
This reflects expectations of underlying growth in it technologies business. It also intends to seek larger acquisitions in the security and healthcare technology sectors.
"We remain committed to delivering sustainable earnings growth and optimising shareholder value as the implementation of the new Hills strategy continues," he said.