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18 Nov 2008 15:57
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18Ā November 2008Ā
Hill & Smith Holdings PLC
Disposal of Express Reinforcements Limited
The Board of Hill & Smith Holdings PLC ("Hill & Smith"Ā or the "Company") announces thatĀ Hill & Smith has agreed to dispose of its wholly owned subsidiary Express ReinforcementsĀ Limited ("Express") to Celsa Steel Service (UK) LimitedĀ and relatedĀ affiliatesĀ ("Celsa Group") for a cash consideration of Ā£12.8Ā million. Cash balances of Ā£2.3 million are included within the sale. The net cash proceeds from the disposal of Ā£10.5 millionĀ will be applied by Hill & Smith in reducing the Group's net indebtedness.
Express is aĀ supplier of steelĀ reinforcingĀ bar andĀ mesh for the UKĀ constructionĀ market.
In its audited accounts for the year ended 31 December 2007, Express reported revenues of Ā£69.0 million and profit before tax of Ā£1.9 million. At 31 December 2007, Express had gross assets of Ā£33.0Ā million (including cash balances of Ā£3.2 million) and net assets of Ā£6.7Ā million.
Hill & Smith has agreed to sell Express at a considerationĀ structuredĀ against a targeted level of net assets.Ā The consideration will,Ā if required,Ā be adjusted following the agreement of completion accounts.Ā
The directors expect that theĀ disposal willĀ have a marginally dilutive effect on the Groups earnings but the Group willĀ beĀ exitingĀ from a high volume low margin business at aĀ premium to net asset value. Express is non-core to the Group,Ā operates in a highly competitive marketĀ andĀ has required significantĀ amounts ofĀ senior managementĀ time.Ā
The currentĀ localĀ managementĀ teamĀ will continue with Express under the new ownership ofĀ theĀ Celsa Group.
Commenting on the disposal, Derek Muir,Ā Chief ExecutiveĀ of Hill & SmithĀ said:
"Express is aĀ non-coreĀ business focused solely on the steelĀ reinforcingĀ bar and mesh market and is better suited to being part of the Celsa Group who specialise in this market. Our strategy continues to be expansion, throughĀ bothĀ investment inĀ new product developmentĀ and byĀ selectiveĀ acquisitions, where above average growth and returns can be anticipated."
Enquiries:
Derek Muir, Group Chief ExecutiveĀ Chris Hardie
Hill & Smith Holdings PLCĀ Arden Partners plc
Mobile: 07703 535540Ā Tel: 020 7398 1639
Tel: 0121 704 7430Ā
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