Trading Update

RNS Number : 7895E

Hill & Smith Hldgs PLC

11 May 2017

 

11 May 2017

Hill & Smith Holdings PLC

Trading Update

Trading in line with expectations

Hill & Smith Holdings PLC ('Hill & Smith' or 'the Group'), the international group with leading positions in the supply of infrastructure products and galvanizing services to global markets, today issues a trading update covering the period from 1 January 2017 to 30 April 2017 (the 'period') ahead of its Annual General Meeting to be held later today.

Current Trading

The Board is pleased to report that trading in the period is in line with the expectations set out at the time of reporting its 2016 preliminary results in March.

Revenue for the period was £191.3m (2016: £165.4m, restated to include non-US Pipe Supports*), a 7% organic increase after adjusting for currency translation and acquisitions/disposals. The positive translational impact of the strengthening of the US Dollar and the Euro against Sterling increased revenue by 6% versus average exchange rates in the first half of 2016. Underlying operating profit and operating margin are ahead of the same period last year.

Market Summary

Infrastructure - Roads

In the UK, implementation of the Government's Road Investment Strategy continues to develop in line with our expectations. Demand for our temporary safety barriers, variable message signs and bridge parapets remains solid and ahead of prior year.

On 27 April 2017, we completed the disposal of CA Traffic Limited, a traffic data collection business, to TagMaster AB for a total cash consideration of £3m. Non-core, and unable to deliver the returns that we target from our businesses, in the year to 31 December 2016 CA Traffic Limited reported revenue of £3.9m and an operating loss of £0.2m.

Internationally, we have continued to make good progress in the USA and Australia and results are ahead of prior year. Elsewhere, trading in Sweden and France is in line with our expectations.

Infrastructure - Utilities

As expected, UK infrastructure investment continues to be robust and demand across our portfolio of products is good.

In the US, the transmission substation business continues to perform well. Our composite materials business is operating at similar levels to prior year. On 27 March 2017, we completed the acquisition of the trade and assets of Kenway Corporation ("Kenway"), a specialist in technologically advanced composite design, manufacturing and field service work across a broad range of industries including marine, power, pulp and paper, transportation and renewable energy. Cash consideration of $6.6m was paid at acquisition with a further $0.7m due in 2018. Kenway has been integrated into our Creative Pultrusions business and furthers our strategy of enhancing our product offering to end users within infrastructure markets.

Our US pipe supports business benefitted from the recent consolidation of distribution centres and the lower cost base resulted in improved profitability and margins. In India, our investment in an expanded facility is nearing completion. Demand from international customers has resulted in an encouraging performance, ahead of our expectations.

Galvanizing

Overall, although reported volumes were 4% behind the same period in 2016, revenue and profitability improved. As expected, and against strong comparatives, volumes in the USA were below prior year, principally due to a large LNG project which ran through the first half and concluded in the third quarter of 2016. Day to day infrastructure demand remains robust and profitability remains strong. In France, volumes were similar to the prior year but margins improved on a lower cost base. Volumes in the UK were ahead of prior year and profitability again improved.

Outlook

On the outlook Derek Muir, Group Chief Executive, commented:

"The Group has delivered a solid start to the year despite mixed end market conditions. Overall, conditions in many of our infrastructure markets remain favourable and we continue to expect to report good progress in 2017 in line with our expectations."

Financial calendar

The proposed 2016 final dividend of 17.9 pence per share, announced on 8 March 2017, will, subject to shareholder approval, be paid on 3 July 2017 to those shareholders on the register at the close of business on 26 May 2017. The ex-dividend date is 25 May 2017.

The Group's interim results for the six months ending 30 June 2017 are scheduled to be announced on 10 August 2017.

*In the Group's results to 30 April 2016 the post-announcement trading results of the non-US Pipe Supports operations (revenue of £2.3m) were treated as non-underlying items given their quantum relative to the overall result for that period.

- Ends -

Cautionary Statement

This announcement contains forward looking statements which are made in good faith based on the information available at the time of its approval. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a number of risks and uncertainties that are inherent in any forward looking statement which could cause actual results to differ materially from those currently anticipated. Nothing in this document should be regarded as a profits forecast.

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/Andrew Leach/Ollie Hoare                                                 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, Sweden, Norway, India and Australia.

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

Infrastructure Products - Roads, supplying products and services such as permanent and temporary road safety barriers, hostile vehicle mitigation products, street lighting columns, bridge parapets, temporary car parks and variable road messaging solutions.

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

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 4,130 staff, principally in 7 countries.

 

END

 

 

TSTOKKDQABKDFPD