Hills maintains profits despite revenue dip

Hills maintains profits despite revenue dip

Distributor reduces labour and third-party costs

David Lenz (Hills)

David Lenz (Hills)

Credit: Hills

Hills has maintained its profit after embarking on a period of cost-cutting involving reduction of labour and contractor costs.

The distributor continued its black trajectory from the end of the 2018 financial year with a net profit after tax of $242,000 for the half year ending 31 December.

Although profit was 40 per cent lower than the financial year's $400,000 closing amount, it marked a reversal of the $748,000 loss for same corresponding period last year.

In the first half year of 2019, the Sydney-based distributor's revenue declined by three per cent to $132.2 million. However, operating costs were reduced by $3.1 million.

The majority of the cost-savings came from reduced labour costs. Hills told shareholders it had reduced contractor costs, bonuses and commissions, and salary and wages and was transitioning away from a third-party logistics model, saving it $2.9 million.

Property expenses however increased as the distributor exited a number of locations and migrated its warehouse operations from the third-party provider to a new national distribution centre in Seven Hills, New South Wales (NSW).

Meanwhile, the company attributed its revenue decline to changes to the audio-visual vendor portfolio and challenges within the small to medium business (SMB) sector of its security and surveillance business.

As a bright spot, Hills said its health business revenue grew by 25.7 per cent and it was now eyeing expansion into New Zealand.

Looking ahead, the company said its focus on digital  transformation, operating expenses and customer service levels, strong customer and vendor management and its health business would lead to improved trading profit by the end of the financial year.

“We saw strong performances from our health, Hills connection solutions, enterprise SSIT and IT business areas, which underpinned our improved [first half year] performance,” CEO and MD David Lenz said.

“What was also encouraging is these business areas grew versus prior year. However, we still had challenges in certain parts of our distribution business which need to be improved and impacted our first half results.”

“In order to ensure we deliver continuous business improvement we will undertake a strategic review in Q4 to ensure we have the correct structure, processes and systems in place to deliver sustained and improved profitability.”

Follow Us

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags distributorSydneyHillsSeven Hills



Join key decision-makers within Environmental, Social, and Governance (ESG) that have the power to affect real change and drive sustainable practices. SustainTech will bridge the gap between ambition and tangible action, promoting strategies that attendees can use in their day-to-day operations within their business.

EDGE 2023

EDGE is the leading technology conference for business leaders in Australia and New Zealand, built on the foundations of collaboration, education and advancement.


ARN has celebrated gender diversity and recognised female excellence across the Australian tech channel since first launching WIICTA in 2012, acknowledging the achievements of a talented group of female front runners who have become influential figures across the local industry.

ARN Innovation Awards 2023

Innovation Awards is the market-leading awards program for celebrating ecosystem innovation and excellence across the technology sector in Australia.

Brand Post

Show Comments