A strong trading update prompts analysts to upgrade earnings forecasts for infrastructure and galvanizing services group Hill & Smith (HILS) and triggers a 5% share price hike to £12.70.
N+1 Singer lifts its pre-tax profit for each of the next three years by approximately 4%. The shares are now trading on 17.9 times forecast earnings for 2017 and yielding 2.1%.
Investec raises its 2016 pre-tax profit forecasts by a similar amount, saying there is positive momentum in most of the group’s divisions supplemented by foreign exchange tailwinds.
Hill & Smith is seen as a major beneficiary from anticipated increased infrastructure spends in the UK and US.
Indeed, we flagged it a month ago in Shares as stock to buy if you believed Donald Trump would win the US election. Hill & Smith is now up 18.5% since the election result.
The company says underlying revenue increased by 15% to £185m between 1 July and 31 October this year. Underlying operating profit and margin are ahead of the same period last year, it adds.
Derek Muir, group chief executive, comments: ‘Overall, conditions in many of our infrastructure end markets remain favourable and we continue to expect the group to report good progress for 2016.’
