Hills Ltd has revealed it expects to incur a loss in the FY2020 financial year thanks to major one-off costs indirectly related to the COVID-19 pandemic.
The distributor forecast a statutory loss of a range between $6 million to $7 million for the 2020 financial year, a slight improvement from the $8.8 million loss after tax in FY2019.
Included in the losses are one-off costs of $7 million to $8 million including adjustments for foreign exchange, redundancies and inventory provisions.
Some $4.1 million was spent on “non-cash” mark-to-market foreign exchange adjustments, while around $3-4 million was spent on costs relating to redundancies and inventory provisions as part of Hills’ ongoing streamlining of the distribution business.
In spite of this, the company said it 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 continued streamlining of its operations.
The one-off costs were partially offset by ongoing cost reductions, including a reduction in wage expenses and the Government’s JobKeeper program.
Hills chief executive and managing director David Lenz said, “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