8th Aug 2018 09:13
LONDON (Alliance News) - Construction supplies manufacturer Hill & Smith Holdings PLC shares slumped Wednesday as the company announced a drop in interim profit and warned that it does not expect to recover the earnings shortfall in the second half.
Hill & Smith, however, added that its order book supports a "strong" second half where its markets remain encouraging.
Shares in the FTSE250 listed company were down 20% in morning trade at 1,172.00 pence each.
In the six months ended June 30, Hill & Smith's pretax profit decreased 14% to GBP28.9 million from GBP33.5 million the year before. Revenue increased 1% to GBP295.4 million from GBP291.8 million.
Hill & Smith's "difficult" first half was down to a poor performance in the UK, which resulted from bad weather in the first quarter, delays to road projects and a "more cautious" investment environment.
The company also said the volatile pricing of zinc commodity prices impacted operating margins.
Underlying operating profit declined by 11% to GBP34.6 million from GBP38.8 million, including a headwind from currency translation of GBP1.5 million. Organically, the decline in underlying operating profit was 9%.
Hill & Smith declared a 6% increase in interim dividend to 10.0 pence per share from 9.4p the year before.
Chief Executive Derek Muir said: "Our US and other international businesses performed strongly in the first half, driven by the significant investment going into the replacement of ageing infrastructure and new infrastructure projects. First half results were below those expected at the time of our May trading statement."
"Overall, we believe that our focused strategy of developing and investing in businesses with market leading positions in growth infrastructure markets, combined with our active and decisive approach to portfolio management, will provide continued growth and drive returns."
Related Shares:
Hill & Smith