Hill & Smith sells off two local manufacturing businesses

SOLIHULL-based infrastructure products supplier Hill & Smith has disposed of two subsidiaries as it pursues a policy of focusing on core activities.

The firm, which specialises in galvanized products, has sold West Bromwich-based Bromford Iron & Steel Company and Birmingham-based JA Envirotanks to Offshore Sourcing and Offshore ETKS respectively.

Net disposal proceeds were £1.5m, of which £0.8m was received at completion with the balance of £0.7m being payable over the following two years.
 
Bromford is a producer of hot rolled steel, used in the manufacture of industrial flooring and specialist steel for chain and horseshoe manufacture. Envirotanks is a niche market supplier of storage tanks for industrial applications.

In 2013 the two businesses had combined revenue of £15.5m and operating losses of £0.6m. 
 
Derek Muir, chief executive of Hill & Smith, said: “The disposal is in line with our strategy of focusing on our core activities, improving financial performance metrics and creating scalable business units that can drive and deliver further growth.”

Earlier this month the company said it expected 2014 to be a good year for the business after it reported a big rise in half-year profits.

Underlying pre-tax profit at £20.8m was 12% higher than the previous year (2013: £18.5m). Pre-tax profit rose to 2% to £16m (2013: £15.7m). This was despite just a 1% increase in revenue to £223.8m (2013: £221.6m).

Underlying earnings per share were 20.3p, up 15% compared to the previous year (2013: 17.7p). Basic earnings per share was 14.6p (2013: 15.0p).

The board declared an interim dividend of 6.4p per share (2013: 6.0p), representing a 7% increase on the corresponding period last year.

The group said it had benefitted from the industrial and geographical spread of its markets and businesses, which created a resilient base with opportunities for growth. However, it did warn of tough H2 comparables due to a strong second six months last year.
 

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