How Hills CEO David Lenz plans to get distie “back to growth”

Hills Limited has detailed how it plans to turn the company’s fortunes around in its next “back to growth” phase.

It follows as the distributor completes its “back to basics” program following several years of tough losses.

During its annual general meeting, Hills chief executive David Linz revealed that two new business sectors would launch next year.

The first is the DIY business called “iProtect” which launches in January. The product catalogue includes home security devices around the internet of things such as GPS smart watches, wi-fi alarms, camera lightbulbs and connected home devices.

The other new business is fire safety technology, a complementary product set to Hills’ primary building technology business. The Fire range includes products like indicator panels and other connected devices.

Lenz also hinted at further “investment opportunities” in IoT and machine-to-machine learning, particularly in physical security and surveillance.

Another new initiative is Hills’ first customer survey in three years, which Lenz said would establish a baseline that could be measured against going forward.

Hills revealed in August it would spin out its health technology business and form a new ASX-listed company in a merger with technology provider Lincor Solutions. Hills Health Solutions accounts for just 9.5 percent of Hills’ revenue with $31.3 million in FY16.

Hills chief financial officer Gareth Turner will take up the same position at Lincor. During the meeting, Hills announced current deputy CFO Chris Jacka would replace Turner at Hills.

Jacka joined Hills in November 2015 as a finance manager, before moving to the deputy CFO role two months ago. Prior to that, he was financial controller and treasurer of Staples Australia.

Hills has been open about its ongoing challenges involved with converting from a low-margin steel manufacturer to a high-margin security and AV technology distributor.

The restructure led to significant job cuts in 2015 and the loss of its key vendor Crestron, which moved to a direct model.

The company’s full year revenue for 2016 was $328.9 million, down by $100 million the year prior. Hills made a $68.3 million loss, but began to show signs of improvement in the second half of the year, with a $700,000 profit in the last six months.

Hills won’t expect to see the full impacts of the back to basics program until FY18

“As with any business recovery there is still more to be done and the management team is continuing to look for further cost reductions across the business,” Lenz said.

“We will continue to flatten the organisation while seeking further improvements in productivity, customer service and customer experience.”

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