TIDMHILS
RNS Number : 0468F
Hill & Smith Hldgs PLC
12 November 2020
12 November 2020
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, provides a trading update for the four month period
to 31 October 2020 ("the period").
During this period, the Group's key priority has remained the
health, safety and well-being of its employees. We have continued
to follow all public health advice and maintained enhanced hygiene,
social distancing and other best practice measures across all of
our facilities.
Current Trading
The Group has seen an encouraging recovery in trading during the
period, with revenue of GBP235.2m, 3% lower than the same period
last year (2019: GBP243.6m). We are also pleased to report that
underlying operating profit was ahead of the prior year due to
improved margins and tight cost control across the Group's three
divisions.
Roads & Security performed as expected during the period. In
the UK, further details of the government's Road Investment
Strategy have been confirmed, with new Smart Motorway schemes now
expected to commence in the second half of 2021. In the US, our
Roads business continues to deliver a strong performance and in
September 2020 we were encouraged by the extension of the Federal
road funding bill (FAST Act) for an additional year. We have
continued to experience challenges in our security businesses due
to COVID-19 restrictions on public gatherings and delayed customer
spend.
The Utilities division performed well with operating profits
ahead of the same period last year, supported by good levels of
demand in our US composites and power transmission businesses. In
the UK we are continuing to see an encouraging recovery in trading
in both our building products and industrial flooring
businesses.
In Galvanizing, volumes are continuing to recover from the
weakness seen in Q2 2020 with total Group volumes 6% below the same
period last year. During the period, the businesses have benefitted
from lower zinc input costs and ongoing tight cost control which
have supported operating margins, with operating profit at similar
levels to the prior year.
Financial Position and Liquidity
The Group continues to be cash generative and maintain a strong
liquidity headroom position with a robust balance sheet. Net debt
as at 31 October 2020 was GBP158.1m compared with net debt of
GBP195.4m as at 30 June 2020. At 31 October 2020, the Group had
GBP219.1m of headroom against its borrowing facilities of GBP348.4m
(GBP335.2m committed, GBP13.2m on demand).
Outlook
Medium term guidance remains difficult given the continuing
uncertainties arising from the COVID-19 pandemic. However, assuming
end markets continue to remain open, we now expect the Group's FY20
operating profit to be slightly ahead of the top end of the current
analyst forecast range*.
Looking forward, we continue to focus on the growth
opportunities across our portfolio. In particular, the Group
remains well placed to benefit from likely government stimulus
through investment in infrastructure schemes.
CEO Succession
Following a thorough handover of responsibilities and with
trading now back at more normalised levels, Derek Muir will be
stepping down from the Board today, with Paul Simmons formally
taking over as Chief Executive.
Commenting on the trading update, Derek Muir said:
"This has been a strong performance over the last four months. I
would particularly like to thank all of our employees for their
continued commitment to the business.
It has been an honour and a privilege to lead Hill & Smith
over the past 14 years, and I wish Paul and the Board well as they
take Hill & Smith through its next phase of growth."
Paul Simmons said:
"I would like to thank Derek for all his support during the
well-run handover process. Having spent the past few months
understanding our businesses in more detail, I am excited about the
growth potential within the business and look forward to leading
the Group through its next stage of development. I am encouraged by
the robust trading performance during the period, with the Group
benefitting from our positions in non-discretionary markets and
have been impressed by the dedication and continued resolve of our
people during these challenging times."
Financial Calendar
The 2020 interim dividend of 9.2 pence per share, announced on 5
August 2020, will be paid on 8 January 2021 to shareholders on the
Hill & Smith register on 4 December 2020. The ex-dividend date
is 3 December 2020.
The Group's preliminary results for the year ending 31 December
2020 are scheduled to be announced on 10 March 2021.
* The current analyst forecast range for FY20 operating profit
is GBP61.6m to GBP64.7m.
- 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 nor should it be
taken to mean that earnings per share of Hill & Smith in the
year ending 31 December 2020, or in future years, will necessarily
match or exceed the Group's historical earnings per share.
For further information, please contact:
Hill & Smith Holdings PLC
Paul Simmons, Chief Executive Tel: +44 (0)121 704 7430
Hannah Nichols, Chief Financial Officer
MHP Communications
Andrew Jaques/James Bavister/Catherine Chapman Tel: +44 (0)20 3128
8170
Notes to Editors
Headquartered in the UK and quoted on the London Stock Exchange
(LSE: HILS.L), Hill & Smith Holdings PLC employs some 4,400
staff and serves its customers from facilities principally in the
UK, France, USA, Sweden, India and Australia. The Group's
operations are organised into three main business segments:
Infrastructure Products - Roads & Security, supplying
products and services such as permanent and temporary road safety
barriers, hostile vehicle mitigation products, street lighting
columns, bridge parapets, temporary car parks, variable road
messaging solutions, access covers and security fencing.
Infrastructure Products - Utilities, supplying products and
services such as pipe supports for the power and liquid natural gas
markets, energy grid components, composite products, building
products, industrial flooring and handrails.
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.
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END
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