Engineering firm reinstates dividend payment despite profits slump

Engineering firm Hill & Smith has seen drops in both revenue and profits for the six months ending June 30.

Turnover at the company fell by 7% to £315.6m, while profits before tax slumped by 38% to £22.8m.

Despite this, the company is remaining positive, saying that government economic stimulation through a series of infrastructure spending leaves it well placed to benefit.

Derek Muir, chief executive, said: “The Group responded positively to the challenges it faced following the lockdown measures introduced to combat the spread of COVID-19. I would like to put on record my appreciation of the efforts of all our employees and suppliers who have enabled our businesses to continue to service our customers in these difficult times.

“We are seeing a gradual recovery in trading and assuming that end markets continue to remain open, we expect a stronger performance in the second half. It remains likely that governments will stimulate their economies through additional or accelerated infrastructure spending, which the Group is well placed to benefit from in the remainder of 2020 and into 2021. We are also pleased with our cash generation in the period which provides significant financial headroom to fund growth, and together with a more positive outlook has also allowed us to reinstate our dividend policy with the declaration of an interim dividend of 9.2p per share.”