Hills has taken a hit to its revenue due to changes in its audio-visual vendor portfolio and the SMB sector of its security and surveillance business.
Revenue for the six months ended 31 December was $132 million, down 2.9 percent from $136 million the previous year. In spite of that, Hills made a $242,000 profit in the period, compared to a loss of $748,000 in 2017.
“In the [first half of FY19] we saw strong performances from our health, Hills Connection Solutions, enterprise SSIT and IT business areas which underpinned our improved [first half] performance,” Hills chief executive David Lenz said.
“However, we still had challenges in certain parts of our distribution business which need to be improved and impacted our first half results.”
While its enterprise security and surveillance business grew within the period, the distie said sales from its SMB counterpart did not meet expectations and would be a key focus in its strategic review in Q4.
Meanwhile revenue from its audio-visual business declined as it absorbed prior year changes to the vendor portfolio, but Hills said the sector “showed improvement” with margin quality increasing by 3 percent.
“Hills’ AV business continues to see strong sales growth from many of our key brands. Hills was recently awarded Williams Sound ‘Global Distributor of the Year’, which is great recognition of our performance in the market,” Lenz said.
Other segments posted growth for the period, with health growing 25.7 percent on the back of contract wins with major Sydney hospitals and sales of its Nurse Call solution, while the antenna business and Hills Connection Solutions posted modest growth as well.
Looking ahead, Hills expects to deliver an improved trading profit for the full year, supported by its digital transformation investments and continued profitability of the Health Solutions business.