14 November 2013

Hill & Smith Holdings PLC

Interim Management Statement

Strong H2 trading in line with the Board's 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 its Interim Management Statement covering the period from 1 July 2013 to 13 November 2013.

Group Overview

Performance in the period has been strong and in line with the outlook statement given at the time of our Half Year Results on 6 August 2013. Accordingly, the Board's expectations for the full year remain unchanged.

Net debt as at 31 October 2013 was £100.5m (30 June 2013: £102.5m).

Infrastructure Products

Roads

Trading in the Roads division has been ahead of the same period in 2012, with encouraging performances in our newer markets of Scandinavia, Australia and India, where we have been supplying our fully tested road restraint systems. This performance demonstrates the success of our 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. Demand for Varioguard, our temporary vehicle restraint system, is anticipated to be high in the final quarter of 2013 and throughout 2014.

Utilities

Trading in our Utilities division has reflected previously reported trends, with a robust performance overall in the USA, 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. Our order book for engineered pipe supports stands at £14.1m (June 2012 £13.6m). 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.   

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. 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.

Galvanizing

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. The rest of the UK saw volumes increase by 23% due to stronger demand from infrastructure projects and our own internal volumes. Volumes in France were 3% down compared to the same period in 2012 but, adjusting for the effect of the special one-off contract in 2012, were similar, which was encouraging. We do however continue to be cautious about the uncertain economic climate in France and its impact on the overall performance. USA volumes were down 2% compared to the same period in 2012, with lower volumes from two of our larger customers. This was however, compensated for by an excellent performance from our new Columbus plant.

Outlook

During the period we have seen increased momentum and positive signs of activity in our infrastructure markets. Subject to customers keeping to the planned delivery programmes in the next six weeks, we are on track to deliver a strong second half, and as such, our expectations for the full year remain unchanged.  

Financial Calendar

The 2013 interim dividend of 6.0 pence per share, announced on 6 August 2013, will be paid on 7 January 2014 to shareholders on the Hill & Smith register on 22 November 2013. The ex-dividend date is 20 November 2013.

The Group's preliminary results for the year ended 31 December 2013 are scheduled to be announced on 11 March 2014.

- Ends -

For further information, please contact:

Hill & Smith Holdings PLC

Derek Muir, Group Chief Executive                                                         Tel:  44 (0)121 704 7430

Mark Pegler, Group Finance Director

MHP Communications

John Olsen/Barnaby Fry/Vicky Watkins                                                 Tel:  44 (0)20 3128 8100

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 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 Serviceswhich 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 6 countries.