The Hills Ltd (ASX: HIL) share price soared by as much as 13% earlier today, after the company released a market update.
At the time of writing, the Hills share price has pulled back to 16 cents per share, up 1.29% on yesterday's close.
What did Hills announce?
Hills provided shareholders with a market update earlier today.
The company noted that it expected to report a loss for FY20 in the range of $6 million to $7 million. Hills cited one-off costs of $7 million to $8 million in FX adjustments, redundancies and inventory provisions for the result.
In addition, Hills noted that the company has significantly improved its balanced sheet and is well positioned to emerge stronger. The company noted that net debt for FY20 is expected to be below $9 million, down from $28.4 million the year prior.
The update also highlighted that the company's core markets have shown relative resilience through the COVID-19 pandemic, with solid trading in July. Management from Hills cited the company's improved balance sheet and assured investors that the business will emerge from the pandemic in a competitive position.
In the update Hills noted that its ongoing cost reduction program and Job Keeper payments have allowed the company to retain employees during the pandemic.
Hills also noted that these estimations are unaudited, with more details expected with the release of the company's FY20 results.
More on Hills
Hills is an Australian-owned company that consists of 2 businesses.
Hills Health Solutions provides nurse call solutions, patient engagement and wifi networks in hospitals and aged care facilities throughout Australia and New Zealand. The company's second business is Hills Distribution, which provides integrated security and IT services to consumers.
According to its trading update today, Hills has been able to reduce its net debt after divesting from its non-core businesses. The divestment in 2019 has allowed the company to focus on its healthcare and distribution businesses.
In addition, Hills has looked to limit the damage of the COVID-19 pandemic by asking its staff to take pay cuts. In April, the company saw staff on the lowest salaries experience a 10% cut, whilst a 35% cut was given to those on the highest salaries.
Foolish takeaway
The Hills Limited share price is currently trading 1.29% higher for the day at 16 cents. Shares in the company have been sold down after hitting an intra-day high of 18 cents.
