Record orders from Indian facility boost Hill & Smith

SOLIHULL-based Hill & Smith Holdings has reported strong performance in an interim management statement delivered to the London Stock Exchange.

The construction products supplier and safety barriers manufacturer said second half trading was in line with its expectations.

Trading in its roads division has been ahead of the same period in 2012, with encouraging performances in its newer markets of Scandinavia, Australia and India, where it has been supplying its road restraint systems.

The firm said this performance demonstrates the success of its international diversification into markets with a high focus on road safety products.
 
“The performance of a number of our UK roads businesses has also been ahead of 2012 as Government road programmes continue to provide a solid pipeline,” it said.

“Demand for Varioguard, our temporary vehicle restraint system, is anticipated to be high in the final quarter of 2013 and throughout 2014.”
 
Hill & Smith reports trading in its utilities division has reflected previously reported trends, with a robust performance overall in the US, offset by a reduced order book for pipe supports for delivery in 2013.
 
“The Bergen pipe supports business in the US has seen enquiry levels improving and has recently been successful in securing orders for the supply of supports for two gas fired power stations, to be delivered in the final two months of 2013,” it said.

“Our order book for engineered pipe supports stands at £14.1m . Order intake for October was encouraging across all geographies, with record orders taken from our new facility in India which will allow for an encouraging start to 2014.

“We expect our Indian facility to continue to gain momentum in the final quarter as a result of the buoyant demand for energy in emerging markets.  During the period we closed our Chinese pipe supports factory to consolidate our production capabilities and improve overall profitability.
 
“Our other US utilities business continues to perform ahead of our expectations with a number of large projects being secured and delivered in the period and with healthy levels of activity for the remainder of the year.”  
 
The firm said that in the UK, the contracting arena remains challenging.

“However, we are in the final stages of completion of the low margin contracts carried over from 2012,” it said.

“We are currently supplying a large diameter twin sea outfall pipeline as part of London’s Lee Valley sewer outfall project and there continues to be an increased demand for building products, supplied through the enlarged Birtley/Expamet business, which is on track for a record year.”
 
In its galvanizing business overall production volumes were 10% ahead of the same period in 2012.

“Our recent acquisition of Medway Galvanizing, which contributed 4% of the volume increase, has been fully integrated and is performing ahead of our expectations,” it said.

“The rest of the UK saw volumes increase by 23% due to stronger demand from infrastructure projects and our own internal volumes.”

Hill & Smith said it is on track to deliver a strong second half.

The firm’s net debt as at 31 October 2013 was £100.5m (30 June 2013: £102.5m).