Hill & Smith Regulatory News (HILS)

12 May 2009 07:00



12 May 2009

HILL & SMITH HOLDINGS PLC

AGM and Interim Management Statement

Hill & Smith Holdings PLC ("Hill & Smith" or "the Company"), the international group with leading positions in the supply of infrastructure products, galvanizing services and building and construction products to global markets, today issues its Interim Management Statement covering the period from 1 January 2009 to 12 May 2009.  The Annual General Meeting will be held at 11.00 a.m. today at the National Motorcycle Museum, Solihull. 

Group Overview

In spite of the challenging economic conditions in the first quarter of 2009, overall trading for the period has been in line with expectations, with the Infrastructure Products Group in particular performing strongly as we see increased spending in sectors such as road infrastructure. Where trading has been affected by lower volumes, costs have been adjusted in order to reduce the impact on earnings which, during the period benefitted from favourable exchange rate movements and lower interest costs.

Infrastructure Products Group ('IPG')

IPG, which is focused in four main markets, grouped as HS Roads, HS Rail, HS Utilities and HS Security performed strongly over the period. HS Roads has seen increased sales with healthy demand in the UK and overseas for both steel and wire rope safety barrier systems and for bridge parapets.

There has been strong revenue generation from Varioguard®, our temporary road safety barrier, as the Highways Agency spend on infrastructure projects increases.  In May we commenced the deployment of 32km of Varioguard® on the M25 widening project, and expect good utilisation of our rental stock through the second half of the year, both from this project, which will run through to 2012, and for the M1 J25-28 widening and M6 Birmingham Box active traffic management scheme.

Techspan, our electronic variable message signs business, has performed well as a result of orders from its share of the £185m Highways Agency contract awarded in 2007. This business now has orders secured through to March 2010.

Our presence in the US continues to grow and Zoneguard™, our temporary or permanent safety barrier, is now in use in four States, through sale or rental contracts. Along with other products supplied by our US operations, Zoneguard™ is positioned to benefit from the $27 billion highways allocation of the American Economic Recovery and Reinvestment stimulus bill.  

HS Utilities also showed growth in the period, with Pipe Supports achieving record sales in March.  Global demand for pipe supports remains high and our new operation in China is scheduled to start production on 1st June 2009.

HS Security had strong sales through our anti-vehicle Bristorm® security fencing, which was used to protect the American Ambassador's residence at the recently held G20 summit.  We are targeting growth in this niche area, as demand and export opportunities for security fencing persist.

Galvanizing Services

Whilst galvanizing volumes have declined as a result of the very difficult economic environment, we have taken swift action to ensure operational costs reflect this position and zinc material costs are managed in order to maintain margins.

Our recent investment in Delaware is set to benefit from the increased activity generated by the US Government's economic stimulus bill and potential orders arising from enquiries received for a number of large schemes. 

Building and Construction Products

The industrial flooring operations continued to perform in line with expectations, in a very depressed UK construction market.  As previously outlined, early action has been taken to reduce costs and the businesses within this division are well placed to respond rapidly to any future changes in the market. 

Finance

As at the end of the first quarter net debt fell by £5.4m from its year end level of £146.2m as a result of cash generation from trading and exchange rate movements.  Our net debt remains well within the £216m of facilities the Group has at its disposal. We continue to be focused on cash management and maintaining strong controls over capital expenditure without impacting our strategy of investing in selective growth opportunities.

During the period we have taken advantage of the low interest rate environment by fixing interest costs on a proportion of the Group's £150m multi-currency facilities loan until its maturity and renegotiation in June 2012.

Derek Muir, Group Chief Executive Officer, Hill & Smith Holdings PLC commented: 

"Trading for the period was in line with our expectation, with the largest division, Infrastructure Products Group performing well. As the year progresses we are looking forward to increased activity across this division, including, through Techspan, the delivery of our electronic variable message signs under the significant Highways Agency contract. 

"Overall the Company is well positioned to benefit from an upturn in the economic conditions and from the range of government stimulus packages and PFI initiatives expected both in the UK and overseas." 

Ends

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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, Thailand and China.

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

Infrastructure Products which supplies products and services such as permanent and temporary road safety barriers, street lighting columns, bridge parapets, temporary car parks, "GRP" railway platforms, variable road messaging solutions, traffic data collection systems, plastic drainage pipes and pipe supports for the power and LNG markets, energy grid components and security fencing.

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 sectors.

Building and Construction Products which supplies roofing systems, safety handrails and flooring, lintels and doors in steel and, increasingly, composite materials. The range of uses for these products include large infrastructure projects involving schools and other public buildings.

Headquartered in the UK and quoted on the London Stock Exchange (LSE: HILS.L), Hill & Smith Holdings PLC employs some 3,400 staff across 54 sites, principally in 5 countries.  In the year to 31 December 2008, it generated revenues of £419.8 million.