Hill & Smith Regulatory News (HILS)

12 May 2011

HILL & SMITH HOLDINGS PLC

Interim Management Statement

Hill & Smith Holdings PLC ("Hill & Smith" or "the Group"), issues its Interim Management Statement covering the period from 1 January 2011 to 11 May 2011 ahead of its Annual General Meeting to be held at 11.00 a.m. today at The Village Hotel, The Green Business Park, Shirley, Solihull, West Midlands, B90 4GW.

Group Overview

The performance of the Group for the period has, overall, been in line with the outlook given at the time of the full year results. The international diversity and strength of our businesses has underpinned our performance in the period.

We have seen variable levels of order intake across the Group as a result of uncertainties over long term capital projects, the timing of major expenditure and also pockets of recovery in certain markets. In those areas of recovery, some of our businesses have experienced higher than anticipated order intake and for our late cycle pipe supports business, this has produced a strong order book, the benefits of which will flow through in the remainder of the current financial year.

The Board's expectations for the full year remain unchanged with a continued weighting towards the second half.

Infrastructure Products

In the context of the UK Government spending review, demand for our traditional barrier products (such as Varioguard), electronic traffic management signage, ANPR cameras, bridge parapet and lighting columns remained relatively strong, with the respective businesses performing better than expected. Furthermore, the Highways Agency have confirmed that the funding has been allocated for the first two schemes of the Managed Motorway Programme and that work will proceed as planned towards the end of 2011.

Whilst the pipe supports business delivered lower than expected revenue and profitability, we are encouraged by the size of the order book at the end of April.

Towards the end of the period we also saw encouraging signs of improvement in the USA utilities market with an increased order intake, although margins continue to be impacted by excess capacity.

Our USA based glass reinforced plastic business, Creative Pultrusions Inc., has made an excellent start to the year securing significant orders and is well positioned to take advantage of the spend on new products in the growth markets of gas exploration and renewable energy.

Galvanizing

Overall production volumes were similar to that for the same period last year, albeit with the USA continuing to perform strongly, offset by a weaker performance in the UK. Volumes in France were marginally ahead of those for last year.

Recovery of rising input costs remain a focus with margins and profitability in line with expectations.

Building and Construction

Overall, our businesses delivered a steady performance with the anticipated benefits of our rationalisation of the flooring division in December 2010, already beginning to contribute. The UK construction market has however only shown limited signs of recovery.

Net Debt

As at 30 April 2011 net debt was £104.3 million compared to £70.6 million at 1 January 2011. The increase in net debt is principally due to the cash cost relating to the acquisition of The Paterson Group, Inc., coupled with the higher working capital caused by increased commodity prices and support for the growing order book across the utilities business.

Acquisition

The Paterson Group, Inc.

On 9 March 2011 we announced the acquisition of The Paterson Group, Inc to expand our international presence in the engineered pipe supports business that primarily serves the power generation markets. Integration of the acquisition is proceeding according to plan with a number of cost synergies being identified for delivery later this year.

The acquisition provides us with a significant position in the North American pipe supports market and an established presence in the nuclear power industry both in the USA and globally. We remain confident in the long term growth prospects for the power generation market and strategically this acquisition is a major step towards achieving our objective of building one of the world's leading pipe supports businesses whilst at the same time growing our international footprint.

New £210 million Revolving Credit Facility

The Board is pleased to announce that the Group has entered into a new £210 million five year multi-currency credit facility to replace the existing facility that was due to expire in June 2012.

The new facility is split into three non-amortising amounts of £113 million, €35 million and $110 million, and has been arranged on competitive terms with a syndicate comprising of the Group's core relationship banks and new lenders. The lending banks forming the syndicate are:

- Barclays Bank PLC

- Lloyds TSB Bank plc

- HSBC Bank PLC

- Svenska Handelsbanken AB

- Yorkshire Bank

The increased level of committed facilities along with the applicable higher margin will increase financing costs by £0.6 million for the remainder of 2011. The new facilities extend the maturity date of the Group's debt profile to 2016 on competitive terms, further strengthens its financial flexibility and underpins its strategic objectives for the foreseeable future.

Ends

For further information, please contact:

Derek Muir, Group Chief Executive Tel: +44 (0) 121 704 7430

Hill & Smith Holdings PLC

John Olsen/Barnaby Fry Tel: +44 (0) 203 128 8100

MHP Communications

Notes to Editors

Headquartered in the UK and quoted on the London Stock Exchange (LSE: HILS.L), Hill & Smith Holdings PLC employs some 3,250 staff operating in 6 countries. In the year to 31 December 2010, it generated revenues of £374.2 million.

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

Infrastructure Products: for the core markets of roads and utilities - with products and services such as permanent and temporary road safety barriers, fencing, overhead sign gantries, street lighting columns, bridge parapets, demountable car parks, glass reinforced plastic railway platforms, variable road messaging solution, traffic data collection systems, plastic drainage pipes and pipe supports for the power and LNG markets, energy grid components and security fencing. Our businesses operate from the UK, France, USA, Canada, Thailand and China.

Galvanizing Services: providing zinc and other coating services for a wide range of products including fencing, lighting columns, structural steelwork, bridges, agricultural and other products for the infrastructure and construction markets. Services are delivered from a network of galvanizing operations in the UK, France and USA.

Building and construction products: supplying products such as roofing systems, safety handrails and flooring, lintels and doors, all with a range of uses including large infrastructure projects involving schools and other public and industrial buildings. All plants are based in the UK.