EASTERN States growth looms as the main agenda item for Western Australian-based listed national irrigation equipment merchandiser Hugall & Hoile.
The company that TV gardener Don Burke calls up for water features to use on his program has opened a branch in Maroochydore, Queensland – taking its number of branches around Australia to 39.
With Victoria facing stricter water restrictions, the company is focussing on building the garden bore business there.
Bores, while commonplace in WA, are virtually unheard of there.
It has also secured key distribution deals with Rain Bird International and pump manufacturer ITT Flygt and has been appointed national exclusive distributor for Olex Irrigation Cable and national distributor for Nutri-Gro organic fertilisers, insecticides and wetting agents.
Hugall & Hoile managing director Dave Nicholls said the WA market was largely mature but the eastern States had great potential.
He said the current drought – the worst on record according to some – was having a negative effect on the company’s profitability.
"We’re not going to make our forecast profit but we should finish up 40 per cent on our previous year’s result," Mr Nicholls said.
While the eastern States may prove new, untapped markets, the company’s move into Queensland ultimately had a harsh effect on its share price.
It bought five outlets from IAMA in a cash for scrip deal that made it a 19.9 per cent shareholder in Hugall & Hoile.
When Wesfarmers bought IAMA it told Hugall & Hoile that it did not have an interest in holding a small shareholding in a small company and then sold its holding to WAM – for 5 cents on May 3.
At the time Hugall & Hoile’s share price was 12 cents.
Mr Nicholls said the company had fought hard to bring its share price back up to its current 8 cent mark.
The company also recently appointed 2002 WA Business News 40under40 winner Rohan Hardie to its board. Mr Hardie had been a senior executive in the company’s warehousing division.
Mr Nicholls said the company had grown from a $2 million operation when he bought it from Bill Wyllie in 1992 to a $55 million business.
Hugall & Hoile was formed in 1967 and its two owners Rob Hugall and Victor Hoile sold the company to United Waldecks Limited which also owned Waldecks nurseries and Total Eden. Mr Wyllie bought UWL and then sold off the companies separately in 1992.
Besides its merchandising and wholesaling businesses, Hugall & Hoile is also experimenting with lawn mowing franchises.
It has six Hugalls mowing franchisees, however, Mr Nicholls said there were no plans to expand on that until the current drought eased.
© Business News 2017. You may share content using the tools provided but do not copy and redistribute.