Electronics, building materials and lifestyle products supplier Hills Holdings says it has already taken most of the pain involved in its restructuring and will be looking for growth in the 2013/14 financial year.
Hills on Monday booked a net loss of $73.6 million for the six months to the end of December 2012, compared to net profit of $15 million in the prior corresponding period.
The bottom-line result included $81.8 million in impairment, restructure and closure costs, after tax.
Hills announced the restructure costs at its annual general meeting in November 2012.
Hills said on Monday that it would take $4.5 million in further one-off impairment and restructuring charges in the second half of the current financial year.
Shares in Hills fell 14 cents, or 12.73 per cent, to 96 cents on Monday.
Hills chief executive Ted Pretty said Hills had already made most of the hard decisions in its restructuring, including cutting about 13 per cent of its 2,642-strong workforce of last year.
“The restructure component is largely complete,” Mr Pretty said.
He said Hills would now move into a “transformation phase” which would focus on efficiency and reducing costs.
“When we finish FY13 (the 2012/13 financial year) in June, we want to be aiming for a very clean, hard-running FY14,” Mr Pretty said.
“So take the pain in FY13 and come out fighting in FY14.”
Hills also said current trading conditions were forecast to remain challenging in many of the group’s markets in Australia and New Zealand.
The immediate outlook for the group’s steel assets remained subdued due to slower commercial building activity and continuing competition from imports.
But these businesses were being restructured to take advantage of the expected uplift in macroeconomic activity.
Hills was cautiously optimistic about future activity across its electronics and communications division once spending on capital projects by the corporate and public sector resumes.
“In view of the above, the Hills is unable to give specific profit guidance for the 2012-2013 full year at this time,” Mr Pretty said.
“However, the company broadly expects its second half NPAT (net profit after tax) result, which will include the benefit of expected cost savings in labour, rent and depreciation, to be higher than the first half.”
Hills will provide a market update of its performance and restructuring program on March 27.
Hills said its first half result was in line with guidance provided to the market at the company’s annual general meeting in November 2012.
Mr Pretty said the restructuring of the group’s activities and a focus on working capital, cash and costs would deliver long-term value to shareholders.
Most of Hills’ business units had performed reasonably given the subdued conditions.
But deteriorating demand in commercial and residential building and home improvement continued to affect Hills’ building and industrial products business and its lifestyle and sustainability business.
Hills did not pay an interim dividend.