Hill & Smith reports strong financial performance
First publishedon www.WorldHighways.com
Hill & Smith Holdings reports a healthy performance for the period 1 July 2016 to 31 October 2016. The firm’s board says that trading has continued to be encouraging and that it expects Group trading performance for the current financial year to be at the top end of market expectations. The group’s results will also benefit from the positive translational impact on its overseas earnings from the recent weakness in Sterling.
Underlying revenue increased by 15% to £185 million, compared with £160.8 million for the same period in 2015. Meanwhile translational currency benefits contributed £9.1 million or 6%. After adjusting for additional revenue of £12.7 million from acquisitions and reduced revenue from restructuring actions of £6.8 million, organic underlying revenue growth was £9.2 million or 5%. Underlying operating profit and operating margin are also ahead of result for the same period last year.
In the UK, implementation of the government’s Road Investment Strategy continues to develop in line with the firm’s expectations. Demand for the Hill & Smith temporary safety barrier has been strong. In September 2016 the company committed to expanding its temporary safety barrier rental fleet by a further 10,000m to 280,000m to support expected demand levels from the second half of 2017. Our portfolio of other products have also performed well in the wider UK market.
On 4 August 2016, Hill & Smith announced the acquisition of Signature Limited for a cash consideration of £12.5 million. Signature is a UK based business which specialises in the development, installation and maintenance of street lighting columns, road sign and traffic management systems. The business complements and expands the group’s product offering in the UK roads market and has been integrated into the existing lighting column business.
Internationally, the firm says that it continues to make progress. Results are ahead of the same period last year, principally driven by a strong performance in the US business where it is seeing a growing acceptance of the steel temporary safety barrier.
Net debt at 31 October 2016 was £127.4 million compared to £99.5 million at 30 June 2016, principally reflecting £22.5 million of expenditure on two acquisitions. Unfavourable movements in exchange rates since the half year on the translation of non-Sterling denominated debt also added £4.4 million.