Interim Management Statement

RNS Number : 9933V

Hill & Smith Hldgs PLC

11 November 2010

 



11 November 2010

HILL & SMITH HOLDINGS PLC

Hill & Smith Holdings PLC ("Hill & Smith" or "the Group"), the international group with leading positions in the supply of infrastructure products, galvanizing services and building and construction products to global markets, today issues its Interim Management Statement covering the period from 1 July 2010 to date. 

Interim Management Statement

Following a solid performance in the first half of 2010, supported by the stimulus spend, the second half has been more challenging in the UK due to the uncertainty created around the Comprehensive Spending Review ("CSR"). Overseas trading has remained robust and volumes have improved in the USA operations.  The Board now expects underlying profit before tax for the year to 31 December 2010 to be marginally below the previous year.  However, underlying earnings per share are expected to be broadly in line with that for 2009, benefitting from lower taxation costs year on year.

We have continued to focus on cash generation and control of our net debt which as at 31 October 2010 was £78.4m, similar to that reported for the half year.

As expected, the outcome of the CSR confirmed a marked reduction in spending on new road projects in the UK.  We were, however, pleased to see confirmation that the major managed motorway programmes will proceed, albeit over a more protracted timescale.  Our Infrastructure Products strategy, over the last few years, has been to supply as many products as possible onto these schemes and this will provide excellent opportunities in the medium term. 

Elsewhere, the environment is mixed.  Our Pipe Supports operation delivered an excellent third quarter performance but order intake for the final quarter and first half of 2011 has been slower than expected.  Enquiry levels however, are very encouraging and the medium term outlook remains positive.  The Board has approved investment to expand our representation and market share with the opening of a new pipe supports plant in India, which we expect to be operational from April 2011.  Combined Galvanizing volumes remain at similar levels to the same period in 2009 and we are particularly encouraged by the US volumes which have recovered from the slow start earlier in the year. The UK Building and Construction market remains challenging and notwithstanding that operating profits are ahead of 2009, we intend to rationalise the number of manufacturing operations to further improve profitability.

Derek Muir, Group Chief Executive Officer of Hill & Smith said:

"Overall we are pleased with the outcome of the UK Government's spending review although there will be a twelve month delay in starting the first managed motorway programme, which will have an effect on our UK infrastructure businesses in 2011.

"We remain confident in the Group's business model and continue to work on strengthening our international profile which will continue to provide resilience in the short to medium term and growth opportunities for the longer term." 

For further information, please contact:

Derek Muir, Group Chief Executive                                        Tel:  [phone]

Hill & Smith Holdings PLC

John Olsen/Barnaby Fry                                                         Tel:  [phone]

MHP Communications

Note:  Reference to Underlying performance, profit and earnings per share, excludes the effect of business reorganisation costs, property items, amortisation of acquisition intangibles, impairments, gains on disposal of available for sale financial assets, change in the value of financial instruments and net financing return on pension obligations.

 

END

 

 

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