27 March 2020

Hill & Smith Holdings PLC

COVID-19 Update

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, provides an update on trading and its financing and liquidity position.

Hill & Smith has some 4,600 employees. The Board's primary focus will remain on ensuring the health and wellbeing of all employees.  In providing guidance and advice to our employees, we continue to follow World Health Organisation guidelines supplemented by input from local authorities in the regions in which we operate. We continue to review and update our advice on a daily basis.

Year-to-date trading

Revenue and operating profit in the two months to 29 February 2020 was in line with the Board's expectations.  Since the middle of March we have experienced disruption in the Group's French and Indian operations.  In the UK, over the last 48 hours we have closed or materially reduced activity in roughly half of our operations. In the US, whilst we have seen some slowdown in demand, all businesses remain open.

Financing, liquidity and dividend

At 29 February 2020 the Group had £332.6m of committed facilities in place and a further £13.9m of on-demand facilities available, providing headroom of £160.6m above our net borrowings at the end of February of £185.9m. The Group's committed facilities principally comprise a c.£285m multi-currency syndicated revolving credit facility with a maturity date of January 2024, and US$70m of senior unsecured notes in two equal tranches maturing in 2026 and 2029 respectively. 

As at 31 December 2019, being the last covenant test date, the Group's net debt to EBITDA ratio was 1.6x on a covenant basis, compared with a covenant limit of 3.0x, while interest cover was 17.9x against a covenant of at least 4.0x. Covenants are tested twice yearly on a 12 month historic basis.

The Group, and each subsidiary business, is focused on proactive cash management given the increasing level of trading uncertainty. As such, the Board has decided to withdraw its recommendation to pay the final dividend at the forthcoming AGM. The decision will be reviewed later in the year once the outlook has become clearer.

Outlook

Given the evolving nature of the COVID-19 pandemic, it is too early to provide earnings guidance in relation to the remainder of the current financial year. 

The Board have put in place a number of operational, cost and cash management initiatives to ensure that Hill & Smith remains tightly managed through this period of uncertainty.  We will continue to monitor external events closely and will keep the market updated on developments, as appropriate.

Longer term we expect to see continued strong levels of infrastructure investment in both of our core markets of the UK and US.  In particular, we were pleased to note the UK Government's Road Investment Strategy 2 announcement on 11 March 2020, covering the period 2020-2025.

AGM

The Company's AGM was due to take place on Thursday 21 May 2020. This is at a time that the UK Government currently believes the COVID-19 pandemic will be near its peak. Consequently, in the interests of the welfare of our shareholders, the Board has taken the decision to delay the Company's AGM until Tuesday 23 June 2020.

- 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 nor should it be taken to mean that earnings per share of Hill & Smith in the year ending 31 December 2019, or in future years, will necessarily match or exceed the Group's historical earnings per share.

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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, India and Australia.

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

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

Infrastructure Products - Utilities, supplying products and services such as pipe supports for the power and liquid natural gas markets, energy grid components, composite products, building products, industrial flooring and handrails.

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 4,600 staff, principally in six countries.