25th Jul 2022 09:41
(Alliance News) - Hill & Smith Holdings PLC on Monday announced the disposal of its French galvanizing and steel lighting column operations to a consortium.
The Solihull, England-based infrastructure company said France Galva SA will be sold to Zinq France SAS and Sofigalva SAS for a net equity purchase price of EUR72.6 million.
Hill & Smith said the disposal is expected to be immediately "enhancing to the group's growth profile and operating profit margin". Its completion and receipt of proceeds would be expected in the fourth quarter this year.
It added: "The disposal is expected to be dilutive to Hill & Smith's earnings per share and accretive to the group's operating profit margin and return on invested capital."
Executive Chair Alan Giddins said: "The proposed disposal of France Galva is in line with the group's strategy of focussing our capital into higher growth markets. While galvanizing continues to be an important part of our long-term plans, we see the UK and US as offering better growth opportunities. The completion of the proposed disposal would provide the group with additional financial firepower to support our organic and inorganic growth ambitions and would serve the best interests of our shareholders."
Hill & Smith said the forecast growth rates for France Galva do not meet the group's long-term growth ambitions and its operating margins are below the group average.
Hill & Smith bought France Galva in 2008, operating ten sites across France. For 2021, Hill & Smith reported an annual underling operating profit of GBP86.0 million. France Galva reported underlying operating profit of GBP8.7 million, representing about 10% of the group's underlying operating profit.
Shares were down 0.5% at 1,324.00 pence each on Monday morning in London.
By Xindi Wei; [email protected]
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