Generating 90 per cent of profit from nations dedicated to revamping their crumbling infrastructure is an obvious boon for Hill & Smith (HILS). The upshot was record revenue, underlying operating profit growth of 14 per cent to £56m and yet another wave of upgrades from analysts.
The UK government's ongoing pledge to deliver an additional lane to 1,300 miles of road triggered more rampant demand for Hill's road signs. Divisional underlying operating profit soared by a fifth, despite lower utilisation of temporary safety barriers in the second half as 'smart motorway' projects - which have since been recommenced - were delayed.
Elsewhere, approval of the US government's $305bn (£214bn) five-year highway bill means the outlook for galvanising looks rosy, too. Volumes across the pond rose 29 per cent in 2015, which easily offset weakness in France, where concerns over the economy weighed on spending.
Manufacturing facilities in the UK and Thailand are due to close as part of a restructuring programme designed to revive the underperforming non-US pipe support operations. Work will be transferred to India ahead of a potential sale.
Analysts at Investec upgraded adjusted EPS forecasts by 7.5 per cent to 56.5p and expect £58.9m of pre-tax profit. That compared with 50.4p and £52.3m in 2015.
| HILL & SMITH (HILS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 784p | MARKET VALUE: | £615m | |
| TOUCH: | 781-785p | 12-MONTH HIGH: | 796p | LOW: 596p |
| DIVIDEND YIELD: | 2.6% | PE RATIO: | 25 | |
| NET ASSET VALUE: | 253p* | NET DEBT: | 46% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 406 | 25.4 | 20.9 | 13.2 |
| 2012 | 441 | 35.2 | 33.9 | 15.0 |
| 2013 | 445 | 30.6 | 29.6 | 16.0 |
| 2014 | 455 | 36.9 | 35.1 | 18.0 |
| 2015 | 468 | 33.2 | 30.9 | 20.7 |
| % change | +3 | -10 | -12 | +15 |
Ex-div: 26 May Payment: 1 Jul *Includes intangible assets of £126m, or 161p a share | ||||
