6th Aug 2015 07:53
LONDON (Alliance News) - Infrastructure products and galvanising services company Hill & Smith Holdings PLC on Thursday said its pretax profit was hit by goodwill charges in the first half, but revenue for the group was higher and it expressed confidence on its outlook for the second half.
Hill & Smith's pretax profit in the first half was down to GBP7.1 million from GBP16.0 million a year earlier, driven by a GBP15.8 million one-off charge related to the impairment of goodwill and intangible assets from the 2011 acquisition of The Paterson Group Inc. Stripping out the exceptional costs, Hill & Smith's pretax profit was up to GBP24.8 million from GBP20.8 million.
Revenue for the company rose to GBP233.0 million, up 4% on the GBP223.8 million it generated a year earlier, boosted by 5% organic growth and accompanied by a 120 basis point improvement in its underlying operating margin to 11.3%.
Hill & Smith said trading in its roads division was robust, driven primarily by the 'Road Investment Strategy' undertaken by the UK government, which has a focus on managed motorways, a core component of Hill & Smith's product offering. Utilities trading was also strong in the half, with a good performance in the UK offsetting some weakness in pipe supports, while galvanising was boosted by exceptional gains in US infrastructure volumes.
On the back of the strong underlying results, Hill & Smith increased its interim dividend by 11% to 7.1 pence per share.
"Hill & Smith is very well positioned in markets, particularly in the UK and US, where the economic outlook remains favourable and where increased infrastructure spending - most notably on roads and utilities - is fuelling demand for our products and services," said Derek Muir, Hill & Smith's chief executive.
"Our encouraging performance is in line with the board's expectations and, whilst mindful of the challenging comparators from our record second half earnings performance last year, the continued weakness in mainland Europe and the general global economic uncertainty, we continue to expect 2015 to be a year of good progress," Muir added.
Shares in Hill & Smith were up 1.1% to 696.23 pence on Thursday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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