Anitech proves a drag on results of equity investor HGL

Tough prices, decreased activity from customers and the difficulty in maintaining product differentiation all contributed to a dismal financial performance for wide-format supplier Anitech.

The result helped to tip the half yearly result of 50% owner, HGL, into a statutory loss of $2.4 million. Derecognised tax assets with an effect of $1.0 million to HGL and an impairment charge of $1.5 million for the operating company, Createc, has triggered a wide-ranging strategic review of the business. In the half-yearly financial results Anitech‘s financial performance was described as materially less than budget.

The 50% owner of Anitech attributes ongoing industry contraction due to major structural decline in the printing sector as responsible for the poor performance. It expects the intensified competition and decreasing industry profit margins … to continue.

The other 50% shareholder in Createc, trading as Anitech, is an entity controlled by former employees and equity owners of the company. Because the agreements in place require unanimous decision making, HGL has decided it does not control Createc, even though it picks up the tab. It has indicated it may continue to provide limited funding to Anitech while the strategic review is ongoing.

Anitech has undergone considerable restructuring over the past year with the wholesale closure and downsizing of the company.

HGL operates as brand supplier for a wide-ranging spread of businesses including home sewing and craft, point of sale, top end lighting, beauty and collector model cars.