Hill & Smith on track to meet FY expectations as revenues rise

Hill & Smith posted a jump in revenue on Thursday as it said full-year 2018 results should be in line with market expectations.

In an update for the period from 1 July to 31 October the company, which designs, manufactures and supplies products for the construction industry, said revenue rose 11.5% to £224.7. After adjusting for currency translation and acquisitions, organic revenue was up 5%.

The negative translational impact of the strengthening of the pound against the dollar in particular decreased revenue by 2% versus average exchange rates in 2017, the company said, while underlying operating profit was ahead of the same period a year ago.

Hill & Smith said it was "encouraged" last month to hear the announcement of further significant investment in the UK roads network. Confirming funding for its Road Investment Strategy 2 programme, the UK government bumped up investment across 2020 to 2025 to £25.3bn, an increase of some 66% compared with the RIS1 programme spanning 2015 to 2020.

The company said that the delivery of smart motorways, in which it has an "active and significant" presence, continues to lie at the core of the government's investment in the strategic road network.

During the period, it completed two acquisitions. It acquired Ohio-based Engineered Endeavours Inc. - which designs and manufacture poles for the power distribution and wireless cellular markets - from Chapter 11 proceedings for $6.4m in cash. It also acquired Ohio-based Composite Advantage Inc. for $10.6m in cash. The business provides fibre reinforced polymer products for infrastructure markets including waterfront, rail, bridge decks and oil & gas.

Hill & Smith said neither acquisition is expected to materially contribute to the 2018 results.

Net debt at 31 October was £152.6m compared to £141.2m at 30 June, principally reflecting further acquisition spend.