- Company posts record results
- Operating margin up 200 points
- New CEO sharpens focus
Infrastructure equipment firm Hill & Smith (HILS) clearly pleased the market with its results for the 12 months to December and the new chief executive’s determination to continue improving sales and margins.
The shares, which had been languishing at 12-month lows, leapt 206p or nearly 12% to £19.40 sending them to the top of the FTSE 250 leader board.
A RECORD YEAR
Revenue for the year to December 31 rose 5% in constant-currency terms to £855 million, with the firm noting a return to organic revenue growth in the second half.
Thanks to a larger proportion of higher-margin sales, the group’s operating profit increased by 20% to a record £143.5 million which represents a 16.8% margin on sales or an increase of 200 basis points (2%) on the previous year’s margin.
Profit before tax rose 18% to around £133 million, and EPS (earnings per share) rose 16% to 122.6p allowing the company to raise the dividend by 14% to 49 per share.
There were four ‘value-enhancing’ acquisitions during the year, at a cost of £58.5 million’, and following the end of the period two non-core, loss-making units were sold in order to concentrate on the group’s priority end-markets.
WHAT DID THE CEO SAY?
Chief executive Rutger Helbing, who joined in September 2024 after a brief stint at the helm of engineering firm Tyman until it was acquired by US group Quanex, commented: ‘Hill & Smith has delivered another record set of results underpinned by the excellent performance in our US businesses, which continue to benefit from strong demand for our infrastructure solutions.
‘Since joining Hill & Smith, I have visited our operating companies and spent time with our highly driven and talented teams. This exercise has increased my confidence that Hill & Smith is exposed to attractive infrastructure and built environment end markets with structural growth drivers, has agile and responsive operating companies, is well positioned to succeed and therefore has excellent prospects for further value creation for our shareholders.’
Helbing also said he saw significant opportunities to use ‘disciplined’ M&A to add to the group’s customer base and end markets, as well as expanding into ‘adjacent’ technologies to accelerate its growth strategy, with a focus on higher-margin, less cyclical areas with strong structural drivers.