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Interim Results

Hill & Smith record revenue and profitability

04 August 2016 08:13

Hill & Smith Holdings reports record revenue and profitability for the six months to the end of June and the acquisition of Signature Ltd.

Underlying revenue increased by 9% to £254.0m (2015: £233.0m), with translational currency benefits contributing £6.4m or 3%.

After adjusting for additional revenue of £6.4m from acquisitions and reduced revenue from restructuring actions of £5.0m, organic underlying revenue growth was £13.2m or 6%.

Underlying operating profit improved by 25% to £33.0m (2015: £26.3m), including a positive currency translation of £1.1m.

Acquisitions contributed £1.7m and the benefit of restructuring actions a further £0.9m. Underlying operating margin improved by 170bps to 13.0% (2015: 11.3%). Underlying profit before taxation at £31.7m was 28% higher than the previous year (2015: £24.8m). Statutory profit before taxation was £19.4m (2015: £7.1m). Underlying earnings per share at 30.7p was up 27% compared with the previous year (2015: 24.2p). Basic earnings per share was 16.8p (2015: 5.6p). Net debt increased to £99.5m (31 December 2015: £91.5m; 30 June 2015: £89.2m) including a negative currency translation impact of £3.3m.

The board has declared an interim dividend of 8.5p per share (2015: 7.1p), representing a 20% increase on the corresponding period last year. The interim dividend will be paid on 5 January to shareholders on the register on 25 November.

Chief executive Derek Muir said: "These results represent an excellent performance, with record revenue and profitability and improved underlying operating margins across all three divisions. We continue to benefit from our strong position in niche infrastructure markets, predominantly in the UK and US, where high levels of investment are fuelling demand for our products. "In the UK, the Government's Road Investment Strategy provides certainty of funding through to 2020/21 and, in addition, exciting progress is now being made in our Roads business in the US and Australia. In Utilities also, our UK and US activities are well placed to continue to benefit from the significant investment in the ageing infrastructure of those countries. In Galvanizing, notwithstanding strong comparatives in the second half, our US and UK operations are expected to more than offset any weakness in France. "Overall, although risks remain, 2016 is expected to be a year of good progress."

The group also announced that it had completed the acquisition of Signature Limited for a total cash consideration of £12.5m, on a debt and cash free basis. The consideration will be funded from the Group's existing bank facilities. Based in the UK, Signature was a subsidiary of Plastic Omnium SA and specialises in the development, manufacture, installation and maintenance of street lighting columns, road sign and traffic management systems.

In the year to 31 December 2015, Signature recorded turnover of £14.8m, operating profit of £1.9m (before Plastic Omnium SA group charges), and had net operating assets, on a debt and cash free basis of £4.0m.

At 8:13am: (LON:HILS) Hill Smith Holdings PLC share price was +13p at 1088p

Story provided by StockMarketWire.com

Related Company: HILS

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