Last checked at 24 Nov 2015 07:00
24 November 2015
Hill & Smith Holdings PLC
Trading Update
Hill & Smith Holdings PLC ("Hill & Smith" or "the Group"), the international group with leading positions in the supply of infrastructure products and galvanizing services to global markets, today issues a trading update covering the period 1 July 2015 to 31 October 2015 ("period").
Group Overview
The Board is pleased to report that trading during the period has continued to be robust, benefitting from the industrial and geographical spread of the Group's markets and business units. Accordingly, the Group remains on track to meet the Board's expectations for the full year.
Markets - summary
Infrastructure - Roads
In the UK, Highways England continues to implement the Government's Road Investment Strategy and thus demand for our products has been healthy. Recently we have experienced some minor delays in the start date of three Smart Motorway projects and now expect the projects to commence in early 2016. During the period, interest in our Variable Message Signs ("VMS") has been strong with orders of £12.1m secured for supply in 2016.
On 11 November 2015 the Group completed the acquisition of the trade and assets of Tegrel Limited ("Tegrel") for minimal total consideration. Tegrel, a specialist metal fabricator based in Newcastle, is the main supplier to VMS for the sign enclosures and fabrications. The acquisition vertically integrates the supply chain and allows VMS to increase its capacity to support Highways England with its signage requirements in the roll out of its Smart Motorway programme over the next five years.
Internationally, our Scandinavian business continues to perform well. In France, action taken on the cost base is assisting the trading performance.
Infrastructure - Utilities
In the USA, where the overall economic outlook remains favourable, both our substation and composite businesses have performed well.
Our UK businesses have benefitted from strong demand for security and building products, offsetting reduced volumes in the industrial flooring market due to lower oil and gas customer demand.
Our pipe supports business commenced the period with a much improved order book for delivery in the second half of 2015. Although results have been better than in the first half of the year, the market remains competitive and the lower oil price continues to impact demand. However, the power market in India continues to grow and we continue to gain momentum. In the USA we are supplying pipe supports to gas fired power stations and LNG plants, however our industrial hanger market remains competitive.
Galvanizing Services
Overall volumes were similar to the same period in 2014. In the USA, activity levels were particularly strong, driven by solar and wider infrastructure markets. Our new plant in Memphis is performing well and establishing itself as a quality galvanizer serving the local fabrication market. Economic conditions in France remain difficult resulting in lower volumes and profitability. In the UK earlier action taken to reduce our cost base has more than offset the impact of lower volumes resulting in profitability ahead of the same period last year.
Financial Position
Net debt at 31 October 2015 was £85.8m compared to £89.2m at 30 June 2015, reflecting normal seasonal working capital patterns.
Outlook
Derek Muir, Group Chief Executive, commented: "Overall, conditions in many of our end markets are generally encouraging and we continue to expect the Group to report good progress for 2015. Accordingly, we remain on track to meet the Board's expectations for the full year."
Financial calendar
The 2015 interim dividend of 7.1 pence per share, announced on 6 August 2015, will be paid on 5 January 2016 to shareholders on the Hill & Smith register on 20 November 2015. The ex-dividend date was 19 November 2015.
The Group's preliminary results for the year ending 31 December 2015 are scheduled to be announced on 9 March 2016.
- Ends -
Cautionary Statement
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 profits forecast.
For further information, please contact:
Hill & Smith Holdings PLC
Derek Muir, Group Chief Executive Tel: +44 (0)121 704 7430
Mark Pegler, Group Finance Director
MHP Communications
John Olsen/Andrew Leach/Ollie Hoare Tel: +44 (0)20 3128 8100
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, Sweden, Norway, India and Australia.
The Group's operations are organised into three main business segments:
Infrastructure Products - Utilities, supplying products and services such as pipe supports for the power and liquid natural gas markets, energy grid components, "GRP" railway platforms and flood prevention barriers, plastic drainage pipes, industrial flooring, handrails, access covers and security fencing.
Infrastructure Products - Roads, supplying products and services such as permanent and temporary road safety barriers, street lighting columns, bridge parapets, gantries, temporary car parks, variable road messaging solutions and traffic data collection systems.
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 markets.
Headquartered in the UK and quoted on the London Stock Exchange (LSE: HILS.L), Hill & Smith Holdings PLC employs some 4,000 staff across 56 sites, principally in 8 countries.