Hill & Smith secures £210m funding package
CONSTRUCTION products supplier Hill & Smith has secured a £210m finance package backed by a group of banks including Yorkshire Bank and Lloyds TSB.
The funds will replace the company’s existing facilities which are due to mature in 2012 and provide it with funding for further expansion. Yorkshire Bank has provided £40m as part of a ‘banking club’.
The new lending facility is split into three non-amortising amounts of £113m, €35m and $110m, and has been arranged on competitive terms with a syndicate comprising: Barclays, Lloyds TSB, HSBC, Svenska Handelsbanken and Yorkshire Bank.
The announcement boosted the group ahead of its AGM.
In an interim management statement ahead of today’s meeting, the Solihull group said its performance remains variable although it expects to see a pick-up during the second half.
“We have seen variable levels of order intake across the group as a result of uncertainties over long term capital projects, the timing of major expenditure and also pockets of recovery in certain markets.
“In those areas of recovery, some of our businesses have experienced higher than anticipated order intake and for our late cycle pipe supports business, this has produced a strong order book, the benefits of which will flow through in the remainder of the current financial year.
“The board’s expectations for the full year remain unchanged with a continued weighting towards the second half.”
The group’s Infrastructure Products division has remained relatively strong despite government spending cutbacks. The division supplies barrier products, electronic traffic management signage, ANPR cameras, bridge parapet and lighting columns.
It was boosted by an agreement with the Highways Agency, which has been allocated funding for the first two phases of the Managed Motorway Programme, which will start later this year.
Although orders within pipe supports were lower than expected, the company said it had been encouraged by the pick-up in orders since January.
Lloyds TSB contributed £45m of the total. Simon Stirling, relationship director at Lloyds Bank Corporate Markets in the West Midlands, said: “Hill & Smith is a market-leading business with a strong and consistent financial performance. We are delighted to have contributed fully to the finance package which will provide funding for both Hill & Smith’s working capital requirements and future development of the business .”
