11th Mar 2014 12:03
LONDON (Alliance News) - Infrastructure products group Hill & Smith Holdings PLC Tuesday said its profit fell for the full year, after its utilities business was unable to replicate its 2012 performance, due to lower levels of demand and one-off major projects not being repeated.
The company posted pretax profit of GBP30.6 million for 2013, down from GBP35.2 million, even though revenue crept up to GBP444.5 million, from GBP440.7 million a year earlier.
The group has three reportable segments: Infrastructure Products - Roads; Infrastructure Products - Utilities; and Galvanizing Services, which all experienced contrasting fortunes.
Hill & Smith said infrastructure products for utilities made a GBP2.0 million loss compared with a profit of GBP10.2 million, which led to overall infrastructure products profit falling to GBP9.2 million from GBP14.5 million.
The utilities business was beset by a number of problems, including one-off major projects not being repeated. The company also is reducing its exposure to UK contracting.
On the whole infrastructure product margin rose to 6.0% from 5.8% due to a stronger margin in roads which offset weaker margin in utilities.
Galvanizing services - which offers corrosion-protection services to the steel fabrication industry with multi-plant facilities in the UK, France and USA - saw profit increase to GBP25.3 million from GBP24.7 million but its profit margin decline to 19.8% from 20.9%.
Hill & Smith said acquisitions completed in 2012 and 2013 contributed around GBP12.6 million in revenue during the year. In April of 2013 the firm bought Medway Galvanising Co Ltd, a single-site galvanizing and powder-coating business operating in Kent for GBP6.4 million.
This was followed by the acquisition of the trade and certain assets of Arkinstall Galvanizing Ltd for GBP400,000. Arkinstall was purchased to complement Hill & Smith's existing UK galvanizing acidities.
Group margin in the first half dipped to 9.1% from 10.1% in the first half but picked up to reach 10.9% in the second half, compared with 9.8% in the second half 2012. Overall margin for the full year held steady at 10.0%.
Financially, net debt increase to GBP87.2 million from GBP86.8 million.
Looking ahead, the company said it expects good growth at constant currencies in 2014, although reported results are likely to be impacted by recent adverse foreign currency movements.
"Overall, the prospects for both Infrastructure Products and Galvanizing Services are encouraging as we see signs of increased activity and future capital spend," Chief Executive Derek Muir said in a statement.
"This, along with our ambition to grow and develop through investing in markets we know, selective acquisitions, and new products and technologies, gives us confidence in achieving sustainable growth and shareholder value," he added.
Despite its woes, the company declared a final dividend of 10.0 pence, up from 9.2 pence, making a total dividend of 16.0 pence, up from 15.0 pence a year earlier.
The stock was trading at 542.50 pence Tuesday morning, up 2.00 pence or 0.4%
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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