Interim Management Statement

RNS Number : 7231E

Hill & Smith Hldgs PLC

14 May 2013

 



15 May 2013

Interim Management Statement

Hill & Smith Holdings PLC ("the Group") issues its Interim Management Statement covering the period from 1 January 2013 to 14 May 2013 ahead of its Annual General Meeting which is to be held at 11.00am today, Wednesday 15 May 2013, at The Village Hotel, The Green Business Park, Shirley, Solihull, West Midlands, B90 4GW.

Group Overview

The performance of the Group in the period has been in line with the outlook statement given at the time of our Preliminary Results on 12 March 2013.  Trading across the Group started slowly, as expected, with variable levels of order intake and delivery of smaller projects in comparison to the prior year.

Whilst our expectations for the full year outcome remain unchanged there will be a greater weighting to the second half than usual, and whilst there is good evidence of larger projects now being scheduled for delivery in the second half, we retain a degree of caution as to the overall outlook for some of our end markets.

Infrastructure Products

Roads

Trading in the roads market has been in line with our expectations and we are benefitting from more normal levels of utilisation of our temporary vehicle restraint system, Varioguard in the UK.  Currently there are five managed motorway schemes under construction, the largest of which is the M25, where we have 60km of Varioguard in use.

Approval for Zoneguard in Australia has recently been granted and an agreement has been signed with a long-term partner for supply to the Australian market.  The first shipment is scheduled to take place in the second half of 2013.

Utilities

Our USA based transmission structures and substation business performed well due to the continuing demand for upgrades and the connection of renewable projects to the USA power grid.  The additional power generated from renewables has however, delayed decisions to build new power plants in the USA.  Accordingly, our US pipe supports business has had a slow start to the year but we expect more enquiries for gas-fired power stations later in the year.  Outside of the USA, we entered 2013 with a strong order book buoyed by emerging market power demand.  However, capacity limitations in Thailand forced some larger projects to be manufactured in the UK facility, thus increasing costs and depressing margin. Our new Indian facility has been accredited with ISO9001, which will allow for the supply of future projects in India at a lower cost base. 

Creative Pultrusions, our USA based composites company, whilst lacking the large one-off ballistic panel order it enjoyed in the first quarter of 2012, has secured large orders for the supply of piling for costal protection to the Statue of Liberty, New York and the boardwalk at Long Beach, New Jersey, which are part of the rebuilding taking place in the aftermath of Superstorm Sandy.

In the UK, both our industrial flooring and our building products businesses are performing ahead of last year.

Galvanizing Services

Overall production volumes were 4% lower than the same period last year.  UK volumes were flat year on year and the USA, although down 5% compared to last year, achieved increased profitability through a better product mix and continued focus on operational efficiencies.  Our new galvanizing facility in Columbus, Ohio is now fully operational and the efficiencies and additional capacity from the modern plant are beginning to be realised.

France started the year slowly with volumes 9% down on the same period last year but the large one-off contract that was due to end in March has been extended through until the end of June.  We retain a cautious outlook in France due to the economic and political climate.

On 30 April 2013 the Group acquired the UK based Medway Galvanizing Company Limited which operates a large plant in Kent, for an enterprise value of £6.6m, representing an EBITDA multiple of 4.4 times.  Medway has a strong tradition in customer service for galvanizing, powder coating and shot blasting.  This acquisition will enable us to offer our existing customers enhanced service packages throughout the South East of England.  We are currently in consultation regarding the proposed closure of our plant located in East London, near the Olympic site. 

Outlook

Whilst our expectations for the full year outcome remain unchanged there will be a greater weighting to the second half than usual, and whilst there is good evidence of larger projects now being scheduled for delivery in the second half, we retain a degree of caution as to the overall outlook for some of our end markets.

Financial Calendar

The 2012 final dividend of 9.2 pence per share, announced on 12 March 2013, will be paid on 5 July 2013 to shareholders registered on 31 May 2013.  The ex-dividend date is 29 May 2013.

The Group's half year results for the six months ended 30 June 2013 are scheduled to be announced on 6 August 2013.

ENDS

For further information, please contact:

Hill & Smith Holdings PLC

Derek Muir, Group Chief Executive                                         Tel:  [phone]

Mark Pegler, Group Finance Director

MHP Communications

John Olsen/Barnaby Fry/Vicky Watkins                                 Tel:  [phone]

Notes to Editors

Hill & Smith Holdings PLC is an international group with leading positions in the design, manufacture and supply of infrastructure products and galvanizing services to global markets. It serves its customers from facilities principally in the UK, France, USA, Thailand, Sweden, China and India.

The Group's operations are organised into three main business segments:

Infrastructure Products - Utilities, supplying products and services such as pipe supports for the power and liquid natural gas markets, energy grid components, "GRP" railway platforms, plastic drainage pipes, industrial flooring, handrails, access covers and security fencing.

Infrastructure Products - Roads, supplying products and services such as permanent and temporary road safety barriers, street lighting columns, bridge parapets, gantries, temporary car parks, variable road messaging solutions and traffic data collection systems.

Galvanizing Services which provides 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 markets.

Headquartered in the UK and quoted on the London Stock Exchange (LSE: HILS.L), Hill & Smith Holdings PLC employs some 3,600 staff across 51 sites, principally in 7 countries.

 

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