TIDMHILS
RNS Number : 3995Y
Hill & Smith Hldgs PLC
17 May 2016
17 May 2016
Hill & Smith Holdings PLC
Trading Update
Good start to the year, trading ahead of expectations
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 1 January
2016 to 30 April 2016 (the 'period') ahead of its Annual General
Meeting to be held later today.
Current Trading
The Board is pleased to report that trading in the period has
been encouraging and is ahead of the expectations that it set out
at the time of reporting its 2015 preliminary results in March.
Revenue for the period was GBP163.1m (2015: GBP153.2m), a 2%
organic increase after adjusting for currency translation and
acquisitions/disposals. The positive translational impact of the
strengthening of the US Dollar and the Euro against Sterling
increased revenue by 3% versus average exchange rates in the first
half of 2015. Underlying operating profit and operating margin are
ahead of the same period last year.
Markets - summary
Infrastructure - Roads
In the UK, implementation of the Government's Road Investment
Strategy continues to develop in line with our expectations and
demand for our temporary safety barriers is strong. Order intake
has remained encouraging for variable message signs which bodes
well for the rest of the year.
On 13 May, we completed the acquisition of Safety and Security
Barrier Holdings Limited ("Hardstaff Barriers") for a total cash
consideration of GBP11m on a debt free, cash free basis. The
consideration will be funded from the Group's existing bank
facilities. Hardstaff Barriers are a privately owned business
specialising in the sale and rental of fully tested temporary and
permanent pre-cast concrete barriers for site and vehicle
protection, and complement our existing range of vehicle restraint
systems. They have also developed a quick-deploy, high security
perimeter system for the protection of critical infrastructure in
vulnerable locations with products supplied across the UK and
Europe. The business will complement and further enhance our
existing range of hostile vehicle mitigation products. In the year
ended 31 March 2016 the business generated revenue and adjusted
EBITDA of GBP3.8m and GBP1.3m respectively. The acquisition is
expected to be earnings enhancing in the first full year of
ownership.
Internationally, we continue to make progress in each of our
chosen geographies and results are ahead of prior year. On 1 April
2016, we completed the acquisition of FMK Trafikprodukter AB
("FMK") for a cash consideration of GBP2.9m. Additional deferred
payments of GBP0.6m are due on achievement of certain targets. FMK
designs and manufactures safety barriers, noise reduction screens
and bridge parapets for the Scandinavian market and is based in
Sweden. In year ended 30 April 2015, FMK had turnover of GBP3.9m
and EBITDA of GBP0.2m. The acquisition of FMK and its suite of
products will accelerate the growth plans of our existing
Scandinavian roads business.
Infrastructure - Utilities
As expected, demand patterns in the UK were below those of a
strong comparative period in the prior year. However, order intake
has been good and current backlogs support a much improved second
and third quarter of the year.
In the US, the transmission substation business continues to
perform strongly. Despite significant quoting opportunities, our
composite material operation has experienced a slower than expected
start to the year resulting in lower profitability. On 20 January
2016, we completed the acquisition of the trade and assets of E.T.
Techtonics, Inc. ("ETT"), a leading designer of composite bridges
for pedestrian, equestrian and light vehicle applications. The
company has a patented design and has engineered and installed over
700 walkway systems using their PRESTEK(R) system. Cash
consideration of $1.8m was paid at acquisition with a further $0.2m
due in 2016. ETT will be integrated into the Creative Pultrusions
business and furthers our strategy of enhancing our product
offering to end users within infrastructure markets.
In March 2016, we announced the restructuring of our non-US Pipe
Supports businesses with operations in the UK, Thailand, China and
India. The restructuring programme is proceeding to plan and is
expected to be completed in early 2017. In the US, although the
performance of the business remains below par, we have experienced
improved demand and profitability.
Galvanizing
Reported volumes were 10% ahead (organically 5%) of the same
period in 2015. Solar and wider infrastructure markets continue to
drive a strong performance in the US with volumes and profitability
ahead of prior year. Volumes improved marginally year on year in
France although economic conditions remained subdued and lower
margins resulted. In the UK, volumes and profitability were aided
by the acquisition, in November 2015, of Premier Galvanizing which
continues to perform well and in line with the acquisition
rationale.
Financial position
Net debt at 30 April 2016 was GBP97.6m compared to GBP91.5m at
31 December 2015, principally reflecting normal seasonality of
working capital and the spend on acquisitions.
The Group today announces that it has amended and extended its
syndicated revolving credit facility. The GBP210m multi currency
facility has been amended on favourable terms and its term extended
by 2 years to 26 April 2021. The financial covenants remain
unchanged.
Outlook
On the outlook Derek Muir, Group Chief Executive, commented:
"The Group has delivered a strong start to the year despite
mixed end market conditions. Although some markets are expected to
remain challenging, 2016 is again expected to be a year of good
progress."
Financial calendar
The proposed 2015 final dividend of 13.6 pence per share,
announced on 9 March 2016, will, subject to shareholder approval,
be paid on 1 July 2016 to those shareholders on the register at the
close of business on 27 May 2016. The ex-dividend date is 26 May
2016.
The Group's interim results for the six months ending 30 June
2016 are scheduled to be announced on 4 August 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 - 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.
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.
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 54 sites, principally in 8 countries.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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