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US boost for Hill & Smith

RESULTS: Infrastructure specialist Hill & Smith has reported decent full-year figures - although trading in 2013 has started slowly

A decent performance from Hill & Smith's (HILS) US operations, combined with a steady stream of water utility-related work, meant robust full-year figures from the infrastructure and galvanising specialist. Underlying pre-tax profit rose 8 per cent to £40.4m - after adjusting for £4.8m in non-trading items and 2011's £5.9m loss from selling a subsidiary.

IC TIP: Hold at 446p

In fact, US profits now generate 50 per cent of the group's underlying profit, up from 32 per cent in 2011, with overseas operating profit now comprising over three quarters of the group's total. The core infrastructure business performed especially well and revenue there rose 16 per cent to £319.8m, driven by water utility work. Although the group profit margin did slip from 7.2 per cent to 5.8 per cent after a more difficult time at the roads business - reflecting reduced road work activity during the Olympics. The French roads unit is seeing lower domestic demand, too, although chief executive Derek Muir says that road-related business is now accelerating back to previous levels.

Cash generation looks strong and the net debt pile fell £17m to £86.8m. Broker N+1 Singer expects adjusted pre-tax profit of £42.7m for 2013, giving adjusted EPS of 40p (from £40.4m/38.5p in 2012).

HILL & SMITH (HILS)

ORD PRICE:446pMARKET VALUE:£344m
TOUCH:445-447.5p12-MONTH HIGH:484pLOW: 297p
DIVIDEND YIELD:3.4%PE RATIO:13
NET ASSET VALUE:210p*NET DEBT:53%

Year to 31 DecTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
200842035.126.210.0
200939039.736.311.5
201037435.332.012.7
201140625.420.913.2
201244135.233.915.0
% change+9+39+62+14

Ex-div: 29 May

Payment: 5 Jul

*Includes intangible assets of £125m, or 162p per share