H1 pre-tax profits up over 300% for Hill & Smith
CONSTRUCTION products supplier Hill & Smith has announced strong interim results with a 15% rise in revenue and a massive 311% increase in first half pre-tax profit.
The Shirley-based company said it was delighted by the strong showing, which it said owed much to its international trading position, strong market positions and a diverse mix of products.
First half revenue came in at £223.8m (2011: £195.1m) after taking account of an adverse currency translation impact of £1.4m. Adjusting for revenue of £9.8m arising from acquisitions and £11.6m relating to disposals made in 2011, underlying revenue increased by £31.9m, or 16%. Underlying operating margin improved to 10.1% (2011: 9.3%) with underlying operating profit increasing by 25% to £22.7m (2011: £18.2m), including an adverse currency translation impact of £0.2m.
Underlying profit before taxation at £20.8m was 28% ahead of the previous year (2011: £16.2m). Profit before taxation improved to £18.9m (2011: £4.6m).
Underlying earnings per share at 19.7p increased by 31% compared to the previous year (2011: 15.0p). Basic earnings per share was 18.0p (2011: 1.7p).
Net debt decreased substantially to £89.1m (December 31, 2011: £103.8m), as a result of strong cash generation during the period.
The board has declared an interim dividend of 5.8p per share (2011: 5.4p), representing a 7% increase on the corresponding period last year.
The firm said the performance was ahead of expectations with strong organic growth from Infrastructure Products, particularly in Utilities, helping to provide a boost with underlying operating profit up 41%.
There was also a robust performance from Galvanizing Services, particularly in the United States, with underlying operating profit up 12%. More than 73% of the group’s operating profit is now generated from international operations.
Derek Muir, chief executive, said: “This has been a very encouraging six months for Hill & Smith, with our international spread, strong market positions and diverse portfolio of products and services serving us well in markets with mixed conditions. The end result was a performance ahead of our previous expectations.”
However, he said the group was staying cautious over what might happen in the second half.
“There is reduced activity in the UK due to the Olympics, with new road projects not commencing until the final quarter of 2012. Furthermore we remain cautious about the level of economic uncertainty within Europe. Accordingly, whilst our first half performance has been encouraging, the outlook for the full year’s performance remains unchanged.”
