A record second half nudged Hill & Smith’s (HILS) full-year numbers past City forecasts, and despite the poor weather both here and in the US, that momentum has carried over into 2014. A massive programme of road improvements in the UK and demand for pipe supports from Indian power plants should drive decent underlying growth - though the strong pound will dent the bottom line.
After stripping out the £9.2m it cost to shut sites in Telford and China, profit before tax (but including new pension fund financing costs) rose 1.5 per cent to £40.6m. It would have been more but for a 45 per cent plunge in underlying operating profit at the utilities division to £7.4m, caused in part by fewer big projects. Still, the new Indian factory has a 10-month order book and business is picking up. Unsurprisingly, Hill’s storm-water attenuation tanks, which help prevent flooding on new housing estates, are also selling well this year.
Meanwhile, hiring out temporary steel barriers helped double profit at the roads business to £11.7m. The galvanizing unit is doing better in 2014 following flat profit last year.
Broker N+1 Singer expects adjusted pre-tax profit of £42m this year, giving adjusted EPS of 40.6p (from 39.1p in 2013).
HILL & SMITH (HILS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 546p | MARKET VALUE: | £ 425m | |
| TOUCH: | 541-546p | 12-MONTH HIGH: | 563p | LOW: 397p |
| DIVIDEND YIELD: | 2.9% | PE RATIO: | 18 | |
| NET ASSET VALUE | 217p* | NET DEBT: | 52% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 390 | 39.7 | 36.3 | 11.5 |
| 2010 | 374 | 35.3 | 32.0 | 12.7 |
| 2011 | 406 | 25.4 | 20.9 | 13.2 |
| 2012 | 441 | 35.2 | 33.9 | 15 |
| 2013 | 445 | 30.6 | 29.6 | 16 |
| % change | +1 | -13 | -13 | +7 |
Ex-div: 28 May Payment: 04 Jul *Includes intangible assets of £127m, or 163p per share | ||||
