Hills distribution returns to profit

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Hills distribution returns to profit

Hills has returned its distribution business to profit and done so ahead of schedule, but also pointed out that health is now its dominant business and the field in which it sees most upside.

In half-year results posted today (pdf) the business reported $126.7m revenue for the first half of FY 19/20. That’s down 4.2 percent on the 18.19 number, but EBITDA rose 79 percent to $9.1m and net profit after tax hit $2.6m, a hefty improvement on last year’s $242,000.

Hills’ IT distribution business returned to profit. EBITDA hit $5.35m, up from $910,000 in the corresponding period. Overall revenue fell, but revenue from continuing businesses increased by 0.6 percent and the business reported “additional improvement in overall margin quality”.

Hills’ investor presentations said those improvements were delivered in part by cost savings of $4m. Selling the company’s antenna and audio-visual units also relieved some balance sheet pressure.

But the most interesting part of the results, to your correspondent’s mind, is that they mention IT distribution only after discussing the state of Hills’ healthcare business. And fair enough: Health now accounts for 65% of Hill’s EBITDA.

And in Health, Hills is close to being a reseller and/or system integrator as it offers solutions for nursing stations that blend Dell servers, sensors and wireless networks. Hills even has its own platform for nurse call stations.

So while the company is less interested in classic distribution these days, it is finding ways to win revenue through services and devising its own intellectual property.

Which is just what the channel is always told to do!

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