In general I agree. You can’t cut costs forever and most of the cost cutting to date has been to desperately try to mitigate the effect of large reductions in sales.
As I understand it though, one of the issues in Hills losing customers has been poor service, in large part due to stock management and delivery. So the move to one central distribution hub rather than several different ones (including a third party) will not only save cost but should greatly improve customer service. That can only help sales. The same with CRM, which is hardly unique, but is probably an investment that was long overdue at Hills.
Investments that help customer retention and acquisition, at the same time as cutting costs, have to be good news.
Hopefully, Ionshield’s issue is not systematic.
Anyway, when it comes to sales growth, the proof of the pudding will be in the eating. No guarantees, I know, but the new MD has a much needed sales background, and that’s the focus.
HIL Price at posting:
21.0¢ Sentiment: Buy Disclosure: Held
