- 1H earnings per share up 10%
- £100 million share buyback
- Stock hits new high for 2025
Engineering group Hill & Smith (HILS) impressed investors this morning with a 4% rise in underlying revenue and an 11% rise in underlying operating profit (on a constant currency basis) for the six months ending 30 June.
The shares gained 264p or more than 13% to £22.32 in early trading as the firm also announced it would buy back up to £100 million of shares over the next 18 months.
RECORD US ORDER BOOK
Birmingham-based Hill & Smith provides road safety equipment such as crash barriers, gantries and traffic solutions, as well as steel and composite products for the rail, energy and utility markets, industrial flooring and galvanising services.
It sells to customers in the UK and the US, and the positive first-half performance was driven by US orders for engineered solutions and galvanising services.
The company continued to experience strong infrastructure demand in the US with ‘record order books’, but UK markets were ‘more challenging’ with subdued activity particularly in road infrastructure.
WHAT DID THE CEO SAY?
Chief executive Rutger Helbing commented: ‘Our second half outlook remains positive, underpinned by continued growth in our US end markets. In the medium to longer term, the group is well positioned in infrastructure and built environment end markets with attractive structural growth drivers, and I am confident that we will continue to make good progress in the future.
‘Our capital allocation priorities are unchanged, and we continue to see attractive opportunities to deploy capital organically, whilst also making good progress with an active M&A pipeline.
‘Having assessed the capital requirements for the group, given the strength of the balance sheet and cash generation we have the capacity to return capital to shareholders, without compromising our ability to deliver on our growth priorities. We are therefore today announcing a £100 million share buyback.’
WELL-POSITIONED
Analysts at Shore Capital said: ‘We believe the company is well positioned to benefit from infrastructure spend in the US.
‘The more attractive areas of the business, which we see as being much more important for the future of the group than the underperforming businesses, continued to be resilient in FY24A and first half FY25F, and have a very good long-term record of growth.’
