Hill & Smith enjoys strong profits
CONSTRUCTION products supplier Hill & Smith has announced record annual pre-tax profits and earnings per share after strong performances across all its divisions despite the onset of recession.
Hill & Smith (HILS), which also supplies infrastructure products and galvanizing services, saw pre-tax profit rise 8.5% to £42.2m last year, compared with £38.9m the year before. Underlying earnings per share increased 18.9% from 32.2p to 38.3p.
In the year to December 31, the Shirley-based group, which employs more than 3,000 people and is split into three main operations, generated revenues of £389.7m.
Infrastructure products covers products and services such as permanent and temporary road safety barriers, street lighting columns, bridge parapets, gantries, temporary car parks, railway platforms, variable road messaging solutions, traffic data collection systems, plastic drainage pipes, pipe supports for the power and liquid natural gas markets, energy grid components and security fencing.
Galvanizing services provide zinc and other coatings for a wide range of products including fencing, lighting columns, structural steel work, bridges, agricultural and other products for the infrastructure and construction sectors.
The building and construction products operation supplies roofing systems, safety handrails and flooring, lintels and doors in steel and, increasingly, composite materials. The range of uses for these products include large infrastructure projects involving schools and other public buildings.
Main business highlights included a strong order book for its roads division due to the Highways Agency’s wide-ranging maintenance programme, while there was also record utilisation in the UK of its temporary vehicle restraint system Varioguard.
The group’s security division received its largest order ever for its new Stronguard fencing product, while the group recently secured a PFI contract for lighting columns worth £8m over five years.
Internationally, the group’s utilities division has been boosted by the opening of a new pipe support manufacturing facility in China, while a new galvanising plant in Delaware in the United States also had a successful first year.
The group is also selling the Zoneguard version of its temporary vehicle restraint system in Canada.
Derek Muir, chief executive, said in the context of the difficult macro-economic conditions the group was operating in, he was pleased that the company had continued to demonstrate its resilience.
“Cost and cash management has been strong, the level of net debt substantially reduced and the dividend has again been increased,” he said.
“Our infrastructure markets in particular have continued to be productive, providing the group with opportunities both in the UK and internationally.
“In the UK we aim to maximise opportunities arising from committed spend on major infrastructure projects such as managed motorway programmes, rail platform extensions, flood alleviation schemes and health & safety on roads. In our overseas markets the increase in tendering and order placement activity in 2010 for the oil, gas, liquid natural gas and power generation markets, indicates signs of recovery.”
He said activity levels in the group’s other markets continued to be impacted by the general economic climate and as such, it did not anticipate much of an increase in volumes.
“Nevertheless, the cost reduction initiatives put into place in 2009, together with continued focus on pricing discipline, will further strengthen the resilience of our margins and earnings.
“Through its strong presence in generally robust markets, improved geographical spread and product diversity, the group is well positioned for 2010 and beyond,” he added.
