Terror threat helps Hill & Smith achieve record results
Ongoing motorway maintenance and the UK’s growing terror threat have helped to deliver record results for building products and galvanising group, Hill & Smith.
The Shirley-based group has announced an 8% increase in revenue to £585.1m (2016: £540.1m), with underlying pre-tax profit up 15% to £78.5m (2016: £68m). Earnings per share also grew 15% to 75.9p (2016: 65.9p). It has recommended a dividend of 30p per share, up 14% on last year (2016: 26.4p).
In its full year results statement, it said: “The increased threat of terrorism in the UK has intensified the demand for deployment of our range of hostile vehicle mitigation products, including temporary and permanent, steel and concrete applications in key locations across the country.
“With a market leading range of solutions, and the ability to respond swiftly, we have completed projects to protect bridges in London, as well as sports and other high-profile events. Discussions are being held with security agencies outside the UK and we expect this market to continue to grow.”
Looking ahead, chairman Jock Lennox said the industrial and geographical spread of the group’s markets and businesses not only provided a resilient base, but also opportunities for growth.
With 80% of revenue and 85% of underlying operating profit deriving from its UK and US activities, the group mainly operates in niche infrastructure markets with positive outlooks.
Mr Lennox said that within its Utilities division, its UK and US activities continued to benefit from the significant investment in replacing ageing infrastructure and new infrastructure projects in those countries. Whilst in Galvanizing, wider market conditions were said to remain favourable and it expected its various businesses to consolidate their strong market positions and continue to take advantage of opportunities.
“In the UK, the implementation of the Department of Transport’s Road Investment Strategy is entering the fourth year of the initial five-year plan, which provides certainty of funding through to 2019/20,” said Mr Lennox.
“We are encouraged that recent announcements by Highways England indicate further investment plans through into 2025 are under discussion. We therefore have confidence the group’s road product portfolio will continue to benefit from increased investment in the UK’s road infrastructure.”
In the US, he said the government had prioritised spending on infrastructure, including building and repairing roads and bridges, and the Hill & Smith businesses in that area were well positioned to benefit from any increased investment.
“Overall, despite political and macro-economic uncertainties, we remain well positioned to again deliver another year of progress,” he added.
Derek Muir, chief executive, added: “Hill & Smith has delivered its best ever trading performance in 2017 with good organic revenue and profit growth, supported by targeted bolt-on acquisitions and the restructuring of under-performing assets, improving overall returns and shareholder value.
“Our performance remains underpinned by our consistent and proven strategy of international diversity combined with the leading positions our businesses hold in their respective markets. Prospects in our core US and UK infrastructure markets as well as the other geographies in which we operate continue to be positive for 2018 and beyond.”
