Hill & Smith sees big full year profits rise but warns 2013 starts slow
CONSTRUCTION products supplier Hill & Smith has reported healthy full year profits after seeing strong performances from its infrastructure products and galvanizing services businesses.
The Shirley-based group, which supplies products globally, saw pre-tax profits increase almost 37% to £35.2m (2011: £25.4m), based on an 8.5% full year revenue increase to £440.7m (2011: £406.2m). Basic earnings per share rose 62% to 33.9p (2011: 20.9p).
The performance could help to insulate the business from what has been a slow start to 2013.
It said it was retaining an element of caution about the level of economic uncertainty within Europe which was impacting on its galvanizing and lighting columns operation in France.
Elsewhere it said it was seeing a reduction of large project work, as many of the orders for such projects were in place in 2012. It pledged to continue bidding for new projects and anticipated these being awarded and delivered in the second half of 2013.
It said markets within the US remained good and in the UK it expected to benefit from increased spending on roads maintenance.
“Overall, 2013 has started slowly, which will lead to earnings being weighted towards the later part of the year, nevertheless the board remains confident that our international diversity will continue to provide resilience in the short term and significant organic growth in the medium to longer term,” it said.
More than three-quarters (76%) of profits were generated from overseas operations, including 50% from the USA, one year ahead of plan. The performance also saw a significant reduction in net debt, down £17m to £86.8m.
Derek Muir, Chief Executive, said: “I am pleased to report another strong performance from the group’s infrastructure products and galvanizing services businesses.
“Our strategy of complementing organic growth with selective acquisitions, combined with our significantly greater international spread, resulted in the continued generation of increased earnings, dividends and shareholder value.
“Overall 2013 has started slowly, which will lead to earnings being weighted towards the later part of the year, nevertheless the board remain confident that our international diversity will continue to provide resilience in the short term and significant organic growth in the medium to longer term.”
In view of the strong performance, the board has recommended a final dividend of 9.2p per share (2011: 7.8p) making a total dividend for the year of 15p per share (2011: 13.2p), an increase of 13.6%.
