# HIL - Hills Limited



## Brengun (22 October 2007)

This is a long established company which seems a little down on shareprice lately. Briefly looking at it history it seems to have a steady compounded growth of around 15%. I suppose higher metal prices and a high $Au isn't helping.
Does anyone hold these stocks? Is it just a good steady plodder for a portfolio?


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## blablabla (22 October 2007)

*Re: HIL - Hills Industries*

Hi B,
Todays drop in the SP of HIL is small relative to the market average. In the mid-august correction it also did not drop much. HIL has been in a general downtrend since it went XD on 3rd Sept. It seems likely it will drop further in the near future, even if the market as a whole does not. It has a good yield so you are probably right in thinking it is a good portfolio stock.


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## bloomy88 (14 March 2009)

*Re: HIL - Hills Industries*

have been looking at Hills for a while now, have been dropping steadily from $3 in January to a close of $1.275 on friday (this was after the 11% rise from it's 12 month lows)

Hills employ a 100% payout ratio which makes them very attractive when the economy is going well, but probably less attractive in the current economic climate.

They have a conservative gearing ratio of 47.9% (as at december 08) and their diversified product line creates less risk of a single product becoming less popular.

Does anyone have any other views on Hills for a long-term hold prospect? 

Appreciate any thoughts

Bloomy


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## It's Snake Pliskin (3 February 2010)

*Re: HIL - Hills Industries*

I've just been reading an article on HIL in AIR magazine which talks about profit improving. Price has responded to a recent release and was curious as to what the future view is from the fundamentals?


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## skc (17 December 2010)

*Re: HIL - Hills Holdings*

Today a profit warning sent the shares down 12%. Now sitting very dangerously at support ~$1.90. Hard to imagine that to hold over next week.

The profit warning probably wasn't a surprise imo. HIL has underperformed the sector in the last month or so before spiking back up to $2.15. Many building products company have issued warnings (HST, ABC...) so they simply cannot be immuned. 

Surprisingly the share opened at $2.08. Making it the easiest short trade of the year... same thing happened when DOW had that big downgrade. It's like there was not enough people watching the open?!

The market is such a funny place sometimes.


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## gav (18 October 2012)

*Re: HIL - Hills Holdings*

Anyone else get caught in the 35% free-fall today? Ouch.

Q1 earnings down 45%
http://finance.ninemsn.com.au/newsbusiness/aap/8549954/hills-holdings-suffers-q1-earnings-slump

Oh well, next 1000 trades...


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## trillionaire#1 (18 October 2012)

*Re: HIL - Hills Holdings*

I took a small holding in Hills right on closing ,just for a short term play.


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## piggybank (20 August 2013)

*Re: HIL - Hills Holdings*

Well the price has gone up over 21% in the past couple of days. Obviously not a favourite here given that the last posting was in October last year.........

Hopefully Trillionaire is still in the stock....


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## Country Lad (5 September 2013)

*Re: HIL - Hills Holdings*



piggybank said:


> Well the price has gone up over 21% in the past couple of days. Obviously not a favourite here given that the last posting was in October last year.........




Change in direction after selling off their steel business a while back attracted my interest.  Last 2 days were positive after announcing acquisitions with a break from pattern so far today. 

Yesterday's chart.


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## skc (5 September 2013)

*Re: HIL - Hills Holdings*



Country Lad said:


> Change in direction after selling off their steel business a while back attracted my interest.  Last 2 days were positive after announcing acquisitions with a break from pattern so far today.
> 
> Yesterday's chart.




A phenomenal run... that's what a re-rating looks like I guess.

The trigger was 4 July announcement about profit outlook confirmation (it was ~$1 then), and the trend further built on announcements in asset sales and the profit report. I remember reading the original annoucement in July and brushed it aside as it didn't seem to contain anything too new or exciting. Back in Oct 2012 a profit warning announcement (which took profits down to the level they re-affirmed in July 2013) saw the stock plunge ~50% to 60c.

But as in most stocks related to the long-overdue buildings recovery - the market likes to focus on the future...


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## System (5 December 2013)

On December 5th, 2013, Hills Holdings Limited changed its name to Hills Limited.


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## pixel (10 June 2014)

Buy-Back underway.
Will it support the sp enough to play out a double bottom?

View attachment 58278


I haven't promoted it to my shopping list just yet, but a break above $1.64 could sway me.


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## Muschu (12 March 2016)

Just doing a bit of basic research and came across this one... Paying a 2c FF dividend but chart looks tragic....


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## So_Cynical (12 March 2016)

Muschu said:


> Just doing a bit of basic research and came across this one... Paying a 2c FF dividend but chart looks tragic....




Dividend cannot hold, but reckon this is a super contrarian trade, they have cash flow and low debt and some issues...my latest super fund disaster as i was in way too early.


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## Craton (14 March 2016)

Won't the removal from the SP/ASX 300 http://www.asx.com.au/asxpdf/20160311/pdf/435rd3468xn14p.pdf put downward pressure on the SP?


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## So_Cynical (14 March 2016)

Craton said:


> Won't the removal from the SP/ASX 300 http://www.asx.com.au/asxpdf/20160311/pdf/435rd3468xn14p.pdf put downward pressure on the SP?



Sure will/has, but really its been on the cards for months so not a surprise.


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## McLovin (16 March 2016)

So_Cynical said:


> Dividend cannot hold, but reckon this is a super contrarian trade, they have cash flow and low debt and some issues...my latest super fund disaster as i was in way too early.




How reliable is that cash flow. I remember when Pretty was selling off the farm looking at these guys and thinking he was putting them into some really marginal businesses (TV's in nursing homes etc). I struggle to think there is that much money in reselling av/security equipment. Maybe I'm missing something.


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## skc (16 March 2016)

McLovin said:


> How reliable is that cash flow. I remember when Pretty was selling off the farm looking at these guys and thinking he was putting them into some really marginal businesses (TV's in nursing homes etc). I struggle to think there is that much money in reselling av/security equipment. Maybe I'm missing something.




Many years ago I had them in my head as a niche manufacturer somewhat related to the buildings supply game... they then tried to reposition themselves as a health tech company (why?) and then god knows what they do now. 

It's probably a good business management case study on how to shrink to crap-ness.


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## Knobby22 (16 March 2016)

skc said:


> Many years ago I had them in my head as a niche manufacturer somewhat related to the buildings supply game... they then tried to reposition themselves as a health tech company (why?) and then god knows what they do now.
> 
> It's probably a good business management case study on how to shrink to crap-ness.




I've looked at them a few times and been pretty unimpressed. I don't think they know what they do themselves sometimes. looking at them again I do like the fact their corporate headcount is dropping. They need to get smaller, act more like a consultant and charge fees. There is not much money or margin in security and AV.


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## Ves (16 March 2016)

McLovin said:


> How reliable is that cash flow.



Speaking of "cash flow"  (or "what cash flow?").

I love the investor presentation.

"Excluding the restructure provisions payments, net cash flow generated by operating activities would have been $8.1 million in 1HFY16...."

Yet, they completely ignore the decrease in trade working capital of $8.4m which is most likely much more to do with the fact that their business is rapidly shrinking (WC run-off isn't really operating cash flow because it's unsustainable).   They claim (pg. 19) that $3.1m of this is because of "improvement in collections performance."  Sounds like management speak. Businesses can improve their cash life-cycle,  but when revenue is falling at the same time it's much harder to prove it.

I notice they're still restructuring at least into the 2017 year  (note $2m cash flow impact).  This stuff doesn't stick to the bones of companies without a competitive advantage.  Short term efficiency gains just get eaten up by competitors who do, or have done,  the exact same thing.

Sure,  this thing could speculatively triple,  quadruple,  go to zero, whatever,  but there's very little actual evidence on which to base any sort of investment case.

I guess it could be an "asset play" but what if the share price triggers another asset impairment evaluation?  (LOL)


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## McLovin (16 March 2016)

skc said:


> Many years ago I had them in my head as a niche manufacturer somewhat related to the buildings supply game... they then tried to reposition themselves as a health tech company (why?) and then god knows what they do now.
> 
> It's probably a good business management case study on how to shrink to crap-ness.




That's what I had them pegged as. Now it's very hard to know what they do. Sort of like throw enough **** at a wall and hope some of it sticks.



			
				Ves said:
			
		

> I love the investor presentation.
> 
> "Excluding the restructure provisions payments, net cash flow generated by operating activities would have been $8.1 million in 1HFY16...."




I only skimmed over the prezo when it came out, too busy to spend too much time on mediocre companies at that time of year. The things that surprised was they said the share price decline is what triggered the review of asset values. Since when is that the way accountants review carrying values?


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## Ves (16 March 2016)

McLovin said:


> I only skimmed over the prezo when it came out, too busy to spend too much time on mediocre companies at that time of year. The things that surprised was they said the share price decline is what triggered the review of asset values. Since when is that the way accountants review carrying values?



Yep, that really stood out.  I don't think I've seen that excuse before.  Sounds like a hotcopper type comment.

Hence my last dig!


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## Craton (17 March 2016)

So_Cynical said:


> Sure will/has, but really its been on the cards for months so not a surprise.




Thanks for the reply.

Am not too familiar with the addition/removal process, so when you say "...been on the cards for months..." would assuming that because the valuation of HIL was heading south or was/is below a threshhold (for inclusion) HIL was removed. Is that correct or is there a formula that is used to determine addition/removal?


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## So_Cynical (17 March 2016)

Craton said:


> Thanks for the reply.
> 
> Am not too familiar with the addition/removal process, so when you say "...been on the cards for months..." would assuming that because the valuation of HIL was heading south or was/is below a threshold (for inclusion) HIL was removed. Is that correct or is there a formula that is used to determine addition/removal?




Heading south in a big way and wasn't a constituent of the ASX200 so in the bottom 100 of the 300 thus a somewhat marginal member.


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## skc (17 March 2016)

Craton said:


> Thanks for the reply.
> 
> Am not too familiar with the addition/removal process, so when you say "...been on the cards for months..." would assuming that because the valuation of HIL was heading south or was/is below a threshhold (for inclusion) HIL was removed. Is that correct or is there a formula that is used to determine addition/removal?




Yes there's a magical formula somewhere on the S&P website. It's to do with market cap, free float and liquidity. Various brokers will publish at various times, their predictions of index component changes, a week or 2 before the actual announcement by S&P.... and they have a reasonably high hit rate.

The price action subsequent to index changes however is quite unpredictable... there are counter intuitive stuff like "Inclusion in ASX100 means small cap managers have to sell", and therefore creating downward pressure on the share price.


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## Craton (17 March 2016)

skc said:


> Yes there's a magical formula somewhere on the S&P website. It's to do with market cap, free float and liquidity. Various brokers will publish at various times, their predictions of index component changes, a week or 2 before the actual announcement by S&P.... and they have a reasonably high hit rate.
> 
> The price action subsequent to index changes however is quite unpredictable... there are counter intuitive stuff like "Inclusion in ASX100 means small cap managers have to sell", and therefore creating downward pressure on the share price.




Cheers skc, figured it'd be along those lines. 

It's an interesting thing this to be or not to be included and as noted, has an amount of influence on the price action. An astute trader would take advantage of this no doubt. 

FWIW, I knew I'd also spend/waste time ploughing through the S&P site, found a link to the ASX methodology and guess what? 
I get a 404 page error. Typical.

Coming back to HIL though, it really does seem like the company has an identity crisis...


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## So_Cynical (11 October 2016)

So_Cynical said:


> (12th Mar 2016) Dividend cannot hold, but reckon this is a super contrarian trade, they have cash flow and low debt and some issues...my latest super fund disaster as i was in way too early.




Out today @ 0.61 for a very small 1% profit, was in way to early thus had an expensive parcel, was a super contrarian trade at the bottom around 25c.


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## Klogg (4 November 2016)

A bit of a stagnant thread, but I just started looking at this... mainly because of the Lincor merger/spin-off.
Interested to see how it's structured (in more detail) and current performance of Lincor ex. Hills Health.

(Posting on a forum usually forces me to follow up on whatever it is I'm looking at, hence this post)

Also need to look into the restructure of Hills as a whole, but at face value it doesn't seem too cheap atm... ~$150m MC + ~$22m of debt for $11.5m EBITDA.


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## So_Cynical (4 November 2016)

Klogg said:


> A bit of a stagnant thread, but I just started looking at this... mainly because of the Lincor merger/spin-off.
> Interested to see how it's structured (in more detail) and current performance of Lincor ex. Hills Health.
> 
> (Posting on a forum usually forces me to follow up on whatever it is I'm looking at, hence this post)
> ...




Was cheap at 25c, that ship has sailed.


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## Klogg (4 November 2016)

So_Cynical said:


> Was cheap at 25c, that ship has sailed.




It's more the spin-off I'm curious about. They haven't released any financials on Lincor's potential Australian operations (are there any?) and the relevant balance sheets for each company...

If they spin off the health solutions business, load it with debt and raise capital within that entity, HIL may be cheap again. Need the details.


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## Ves (4 November 2016)

Klogg said:


> It's more the spin-off I'm curious about. They haven't released any financials on Lincor's potential Australian operations (are there any?) and the relevant balance sheets for each company...
> 
> If they spin off the health solutions business, load it with debt and raise capital within that entity, HIL may be cheap again. Need the details.



Lincor will be debt free upon listing according to the presentation in Sept 2016.

Are you looking at the fact that they're expected to raise $30mil at the IPO and noticing that this is around the same gross debt figure in Hills?

hmm,  the AGM presentation seems to say "repayment of Hills debt" on page 14 under the heading Lincor Merger?


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## Klogg (4 November 2016)

Ves said:


> Lincor will be debt free upon listing according to the presentation in Sept 2016.
> 
> Are you looking at the fact that they're expected to raise $30mil at the IPO and noticing that this is around the same gross debt figure in Hills?
> 
> hmm,  the AGM presentation seems to say "repayment of Hills debt" on page 14 under the heading Lincor Merger?




Yeah, I read that as well. I'm guessing that means they're shipping off all their debt to the new entity, then paying off the debt with a cap raise.

I'm just curious at the moment more than anything. Spin-offs can be quite attractive, so I try and follow them where I can.


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