6th Mar 2019 09:23
LONDON (Alliance News) - Infrastructure products maker and metal galvaniser Hill & Smith Holdings PLC boosted its 2018 dividend Wednesday after a return to growth in the second half of the year, despite full-year profit narrowing.
Meanwhile, long-standing finance chief Mark Pegler announced his intention to stand down at the end of April.
In 2018, pretax profit narrowed 19% to GBP59.8 million from GBP74.1 million the year prior. This was despite revenue rising 9.0% to GBP637.9 million from GBP585.1 million in 2017.
Profit performance was hurt by one-off exceptional costs rising to GBP16.5 million from GBP8.3 million the year prior.
Underlying pretax profit - excluding exceptional items - narrowed 2.8% to GBP76.3 million in 2018 from GBP78.5 million in 2017.
Revenue performance was helped by the contribution from acquisitions. In May 2018, Hill & Smith bought US safety equipment firm Work Area Protection Corp for USD42 million. Subsequently it acquired Engineered Endeavors Inc for GBP4.8 million in August and Composite Advantage Inc for GBP8.0 million.
"We returned to growth in the second half, a testament to our resilient business model, our leading positions in markets with clear long-term growth dynamics, and our ability to create our own growth opportunities by broadening and enhancing the range of products that we can offer," Hill & Smith Chief Executive Officer Derek Muir said. "We do this both through internal product development and by targeting complementary acquisitions, and 2018 has been a busy and successful year in this regard."
In a "disappointing" first six months of the year, reported pretax profit sank 14% due to a poor performance from its UK business. Underlying pretax profit narrowed 12%.
"Our UK and US businesses, which represent the bulk of our activities, will continue to benefit from the significant ongoing investment in replacement and new infrastructure in those countries," Muir added. "In particular, the UK government's confirmed long-term commitment to increased investment in the roads network is very encouraging for our UK roads business, and our US businesses will benefit from the US Administration's 'Buy American' policy for federally funded infrastructure projects."
Hill & Smith proposed a 21.8 pence per share final dividend, up 27% from 17.2p a year prior. For the full year, the dividend rose 6.0% to 31.8p from 30.0p in 2017.
"Despite all the current well-documented political and macro-economic uncertainty, we are confident that our leading market positions, business model and financial strength put us in a strong position to take advantage of market opportunities as they present themselves," Muir continued. "Whilst we continue to experience some short term uncertainty in the UK, we have reasonable expectations that 2019 will be a year of progress for the group."
In a separate announcement, Hill & Smith said Finance Director Mark Pegler - first appointed in 2008 - will stand down from the firm at the end of April. The search for his replacement is now udnerway.
"Mark has played a major role in Hill & Smith's very successful evolution over the course of the last eleven years, and I would like to thank him both for this commitment, and for his personal support," Muir said. "On behalf of the board and everyone within the group, I wish him well for the future."
Shares in Hill & Smith were 0.6% higher at 1,185.00 pence on Wednesday.
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