16 November 2022
Hill & Smith PLC
Robust trading - full year outlook expected to be ahead of expectations
Hill & Smith PLC ("Hill & Smith" or "the Group"), the international group creating sustainable infrastructure and safe transport through innovation, provides a trading update for the four-month period to 31 October 2022 ("the period").
Group Performance and Outlook
Trading in the period has remained robust with revenue from continuing operations 18% ahead of the prior period on an organic constant currency basis. Our operating companies continue to take pricing actions to offset cost input inflation and we are pleased to report that operating margins were ahead of H1 2022 and the same period last year.
Based on the good trading performance to date and a foreign exchange tailwind, we now expect full year operating profit from continuing operations to be ahead of the top end of current analyst consensus^. The Group expects to see a material improvement in cash generation during H2 2022.
While mindful of current macroeconomic uncertainty, the Group has a proven track record of resilience and, with exposure to the structural growth markets of sustainable infrastructure and safe transport, is well positioned to deliver against its strategic goals. Consequently, we expect to make further progress in 2023.
Trading by division
The Galvanizing division continued to perform strongly, supported by pricing actions and good volume growth in the US. The integration of Widnes Galvanising is going well and enhances the Group's presence in the north west of the UK.
The Engineered Solutions division delivered strong revenue and profit growth in the period with buoyant levels of demand across the portfolio. In particular, our faster growing US businesses continue to perform well.
Our Roads & Security division delivered good revenue and profit growth in the period. In the UK, further delays to strategic road upgrade projects resulted in lower temporary safety barrier utilisation than expected, however this was more than offset by strong demand for the UK security portfolio. Prolectric, our UK off grid lighting and power solutions business, continued to deliver good growth in the period and the recent acquisition of National Signal, based in California, further accelerates our strategy in this fast growing and attractive market.
Update on Refinancing
We are pleased to report that we have successfully completed the refinancing of our principal bank debt facility on competitive terms*. The new syndicated revolving credit facility of £250m has an initial maturity of four years with an option to extend for a further year at the first anniversary, providing us with certainty of funding to support the Group's growth opportunities.
The Group's preliminary results for the year ending 31 December 2022 are scheduled to be announced on 8 March 2023.
^ The current company compiled analyst expectation range for FY22 underlying operating profit is £84.9m to £89.7m on a continuing operations basis.
* As we noted previously, Group interest costs for the year will include an additional c£2m of refinancing charges under IFRS 9.
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 profit forecast nor should it be taken to mean that earnings per share of Hill & Smith in the year ending 31 December 2022, or in future years, will necessarily match or exceed the Group's historical earnings per share
For further information, please contact:
Hill & Smith PLC Tel: 44 (0)121 704 7434
Alan Giddins, Executive Chair
Hannah Nichols, Chief Financial Officer
MHP Communications Tel: 44 (0)20 3128 8613
Notes to Editors
Hill & Smith PLC creates sustainable infrastructure and safe transport through innovation. The Group employs c.3,800 people worldwide with the majority employed by its autonomous, agile, customer focussed operating businesses based in the UK, USA, Australia, India and Sweden. The Group office is 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 divisions:
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.
Engineered Solutions: supplying engineered steel and composite solutions with low embodied energy for a wide range of infrastructure markets including energy generation and distribution, marine, rail and housing. The division also supplies engineered pipe supports for the water, power and liquid natural gas markets and seismic protection solutions.
Roads & Security: supplying products and services to support road and highway infrastructure including temporary and permanent road safety barriers, renewable energy lighting and power solutions, Intelligent Traffic Solutions, street lighting columns and bridge parapets. The security portfolio includes hostile vehicle mitigation solutions, high security fencing and automated gate solutions.