Hills has suspended its shares from trade after a court loss

A once great Aussie manufacturer – well known in SA for the iconic Hills hoist – has suspended its shares from trade after a legal loss that could have a “significant impact”.

Hills lost an appeal in court recently, which could have significant implications.

Hills, once a powerhouse of Australian manufacturing, has suspended its shares from trade after a legal loss which could have a “significant impact on the company’s financial position’’.

The company, which is now mainly focused on the provision of digital healthcare technology, last week told the Australian Securities Exchange that Stellar Vision Operations had been awarded $5.48m in a case against its healthcare division.

Hills initially succeeded in having the case dismissed in February 2022, however Stellar appealed that decision and won.

Hills requested on Monday that its shares be suspended from trade while it negotiated next steps with Stellar.

The company said it was “seeking a voluntary suspension pending resolution and an announcement by the company in relation to ongoing settlement negotiations between the parties and other stakeholders, including the financier, which, if not satisfactorily resolved, have the potential to have a significant impact on the company’s financial condition’’.

Hills is expecting the suspension to remain in place until June 5.

Also on Monday non-executive directors Harley Whitcombe and Gunalan Jeganathan resigned from the company’s board.

The iconic Australian Hills Hoist. Picture: File

Both of those directors were appointed to the board in early May as representatives of Historical Holdings, which is a substantial shareholder in the company after investing $900,000 recently at 3c per share.

The company’s stock last traded at 2.3c per share, valuing it at $12.3m.

Hills had a cash balance of $2.8m at the end of the March quarter, however also completed an entitlement offer on April 20, raising $6.4m.

Its net cash outflow for the March quarter was $211,000.

Hills, formerly known as Hills Industries, was for decades one of Australia’s great manufacturing companies, famously producing the Hills Hoist which started production in 1945 when Lance Hill bought a prototype model and plans from a South Australian inventor.

The company diversified into many other products including television antennas, automotive components and metal tubing.

Competition from cheap Chinese imports particularly from about 2000 eroded the company’s market share in its traditional product sectors, and it eventually got out of industrial manufacturing altogether and in 2010 changed its name to Hills Holdings and divested stakes in listed industrial products firm Korvest and steel products company Orrcon.

The company has struggled to make a profit in recent years and last financial year posted a net loss of $23.9m