Strong UK and US markets boost engineering group’s revenue and profit
Shirley-based engineering group Hill & Smith has seen both annual revenue and profit rise on the back of strong trading in its core UK and US markets.
Hill & Smith, which specialises in the infrastructure products and galvanizing services sectors, saw revenue jump from £637.9m in 2018 to £694.7m in the 12 months to the end of December 2019, while profit before tax rose from £59.8m to £61.8m.
The group’s UK and US operations generated 83% of revenue and 96% of its underlying operating profit.
However, the group said its smaller international operations experienced “more mixed outcomes” in the year, with its Scandinavian roads business, which represents around 5% of group revenue, experienced difficult market conditions and operational challenges resulting in the business reporting operating losses in the year.
Hill & Smith said: “We have taken a number of actions to restructure the Scandinavian business including strengthening the management team, closing underperforming depots and exiting the smaller Norway operation. Whilst we believe that the business is now better aligned to its core markets we remain cautious over its short term outlook.”
Meanwhile, the company said its acquisition strategy continues to focus on key growth markets and, during the year, its completed three acquisitions, all in the UK.
The largest of these was Tamworth-based ATG Access, a specialist in car park control and access systems, for £12.4m.
Derek Muir, chief executive, said: “We are pleased with the group’s overall performance in 2019. We have seen strong progress in our UK and US markets, which represent the majority of our activities, where the group continues to benefit from its leading positions in niche infrastructure markets, its clear business model and financial strength.
“Together these create the platform from which the group is capable of delivering long term and sustainable growth.
“Our outlook for 2020 remains unchanged and, whilst we may see some short-term delays in the commencement of UK roads projects we expect another year of good progress for the group.”