25 May 2021
Hill & Smith Holdings PLC
Trading ahead of prior year; Full year expectations unchanged
Hill & Smith Holdings PLC ("Hill & Smith" or "the Group"), the international group creating sustainable infrastructure and safe transport solutions, provides a trading update for the four month period to 30 April 2021 ("the period").
The Group has made a good start to the year with reported revenue for the period 10 percent ahead of last year and ahead of 2019 levels. We are also pleased to report a strong recovery in operating profit in comparison to the same period last year which was impacted by COVID-19 related disruption from the middle of March 2020.
The Roads & Security division performed as expected in the period. Our roads subdivision delivered results ahead of 2020, reflecting high levels of demand in the US, a solid performance in the UK and a robust recovery in our other international roads businesses. While our security businesses continued to face challenges due to COVID-19 restrictions on public gatherings and delayed customer projects, the trading performance was ahead of the same period last year.
Our Utilities division continued to perform well with year-on-year growth supported by a good recovery in demand in our engineered pipe support and UK utility businesses and continued strong levels of demand in our US composite business.
In our Galvanizing division, trading for the period was robust with total volumes galvanized significantly higher than 2020, which was disrupted by COVID-19.
In line with our refreshed portfolio management strategy, in March 2021, we made the decision to close our small, loss making UK variable message sign business ("VMS") and expect operations to fully cease by the end of this year.
Prolectric Services, our off-grid solar energy solutions business acquired in March 2021, has traded well in the first two months post acquisition and we remain positive about the long-term growth potential, driven by the transition from fossil fuels towards renewable energies.
We expect to see a good recovery in trading in 2021 and while mindful of foreign exchange movements, our expectations for the full year remain unchanged. While we continue to experience headwinds relating to US labour shortages and higher global steel costs, our local teams have taken swift and effective actions which are mitigating the impacts.
The medium to longer term outlook for the Group remains positive, supported by strong growth drivers for both sustainable infrastructure and safe transport.
Financial Position and Liquidity
Hill & Smith continues to be highly cash generative with a strong balance sheet. Net debt as at 30 April 2021 was £160.2m (December 2020: £146.2m). The £14m net debt movement during the period includes cash outflows of £7.3m for the FY2020 interim dividend and £11.7m relating to the acquisition of Prolectric Services.
The 2020 final dividend of 17.5 pence per share, if approved at today's AGM, will be paid on 9 July 2021 to those shareholders on the register at close of business on 4 June 2021. The ex-dividend date is 3 June 2021.
The Group's interim results for the six months ending 30 June 2021 are scheduled to be announced on 11 August 2021.
Paul Simmons, Group Chief Executive said:
"The Group has made an encouraging start to the year and we expect a good recovery in trading through 2021. We are moving ahead with our plans to create a higher quality business and the announced closure of VMS and acquisition of Prolectric demonstrate this. Our end markets are supported by strong macro drivers that give us confidence in the Group's long-term prospects."
- Ends -
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 nor should it be taken to mean that earnings per share of Hill & Smith in the year ending 31 December 2021, or in future years, will necessarily match or exceed the Group's historical earnings per share.
For further information, please contact:
Hill & Smith Holdings PLC
Paul Simmons, Chief Executive Tel: +44 (0)121 704 7434
Hannah Nichols, Chief Financial Officer
Andrew Jaques/Rachel Farrington/Catherine Chapman Tel: +44 (0)20 3128 8100
Notes to Editors
Hill & Smith Holdings PLC creates sustainable infrastructure and safe transport through innovation. The Group employs c.4500 people worldwide with the majority employed by its autonomous, agile, customer focussed operating businesses based in the UK, USA, France, Sweden, India and Australia. It has a head office in the UK and it is quoted on the London Stock Exchange (LSE: HILS.L).
The Group's operating businesses are organised into three main business segments:
Roads & Security: supplying products and services such as permanent and temporary road safety barriers, renewable energy lighting and power solutions, Intelligent Traffic Solutions, street lighting columns, bridge parapets, temporary car parks, variable road messaging solutions, hostile vehicle mitigation, high security fencing and access covers.
Utilities: supplying products and services such as engineered composite solutions with low embedded energy, pipe supports for the water, power and liquid natural gas markets, seismic protection solutions, building products including fire doors, industrial flooring and assemblies for the distribution of electricity.
Galvanizing Services: dramatically increasing the sustainability and maintenance free life of steel products including structural steel work, lighting, bridges, agricultural and other products for the industrial and infrastructure markets.