14 November 2014
Hill & Smith Holdings PLC
Strong trading - on track to meet 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 a trading update covering the period 1 July 2014 to 31 October 2014 ("period").
The Board is pleased to report that trading during the period has continued to be strong and in line with the outlook given at the time of our half year results on 5 August 2014. Accordingly, we remain on track to meet the Board's expectations for the full year.
Markets - summary
Infrastructure - Roads
In the UK, the business continues to benefit from the previously announced increased investment in the nation's road infrastructure, in particular the 'SMART Motorways' programme. We have seen increasing evidence of the Government's commitment to the Highways Agency spending plans and remain encouraged about the medium term outlook for this business. During the period we completed our investment of £15.5m in a further 95,000m of our temporary barrier fleet, increasing our overall fleet to 265,000m.
Internationally, our Scandinavian business continues to perform well. Given regional economic conditions in France trading remains challenging, whilst in India the market is gaining momentum following the hiatus in demand created by national elections earlier in the year.
Infrastructure - Utilities
In the USA, trading in our composite materials operation is strong, with a number of promising opportunities being pursued for delivery later this year and next. Investment in additional capacity by competitors has shortened lead times and raised pricing pressure in our transmission substation business.
The market for our UK utilities businesses continues to be positive and we have made pleasing progress over the same period prior year. In furtherance of our strategy of improving both return on sales and return on invested capital, on 18 August 2014 we announced the disposal of two non-core businesses, Bromford Iron & Steel and JA Envirotanks.
Our pipe supports business made good progress overall with profitability ahead of the same period in the prior year. In the USA we have seen an improvement in both the engineered and commercial pipe support markets and recent trading is more encouraging. Outside of the USA, the business has experienced lower order intake than anticipated, principally due to our major customers completing existing contracts at the expense of new orders. Enquiry and quotation levels, however, remain healthy. Our order book for engineered pipe supports stands at £10.9m (June 2014: £14.2m) and notwithstanding an improvement in orders over the next few months, we are now expecting a slower start to 2015.
Overall production volumes were 6% ahead of the same period in 2013. Volumes in the USA were particularly strong, with year on year growth of 22% as demand continued to improve across a wide range of infrastructure related end markets. Construction of our new plant in Memphis, Tennessee is nearing completion and will be operational by the end of the year. Volumes in France and the UK were at similar levels to the prior year, a creditable performance in both geographies, but particularly in France where the wider economic conditions remain difficult.
Net debt at 31 October 2014 was £97.5m compared to £98.5m at 30 June 2014, reflecting normal seasonal working capital patterns along with an increased level of capital investment in organic growth initiatives.
Overall, conditions in many of our end markets are generally encouraging and, notwithstanding the adverse impact of year on year foreign exchange movements, we continue to expect the Group to report good progress for 2014. Accordingly, we remain on track to meet the Board's expectations for the full year.
The 2014 interim dividend of 6.4 pence per share, announced on 5 August 2014, will be paid on 6 January 2015 to shareholders on the Hill & Smith register on 21 November 2014. The ex-dividend date is 20 November 2014.
The Group's preliminary results for the year ending 31 December 2014 are scheduled to be announced on 10 March 2015.
- 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.
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
John Olsen/Andrew Leach/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 Australia, France, India, Sweden, Thailand, the UK and the USA.
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, street lighting columns, bridge parapets, gantries, temporary car parks, variable road messaging solutions and traffic data collection systems.
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 and flood prevention barriers, plastic drainage pipes, industrial flooring, handrails, access covers and security fencing.
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 3,900 staff across 52 sites, principally in 7 countries.