Hill & Smith (HILS) revealed constant-currency revenue growth and an accompanying 80 basis point bump in the underlying operating margin to 13.3 per cent at the half-year mark. The latter was testament to effective portfolio management, the company unhesitatingly hiving-off non-performing assets. The infrastructure and galvanizing specialist registered a 13 per cent leap in adjusted operating profit to £38.8m, although comparative earnings were flattered by a £7.2m decrease in restructuring charges.
The bulk of Hill & Smith’s work is carried out in the UK and US economies, both of which are in need of major infrastructure overhauls. Details on the Trump administration’s proposed $1 trillion investment programme have yet to emerge, but this forms no part of the group’s current performance modelling. Instead, the galvanizing services division continues to benefit from US surface transportation spending via the Fixing America's Surface Transportation (FAST) Act.
Closer to home, top-line visibility is bound up with the the Department of Transport’s Road Investment Strategy, which is halfway through its initial five-year timeframe. The Highways Agency is engaged in the consultation process for the next development phase and is looking to up the budget. On a more sombre note, the group has also seen rising demand for temporary safety barriers in response to recent terrorist attacks.
Investec gives statutory pre-tax profit of £69.7m for the year-end, leading to reported EPS of 66.6p (from £48.3m and 42.6p in 2016).
| HILL & SMITH HOLDINGS (HILS) | ||||
| ORD PRICE: | 1,386p | MARKET VALUE: | £1.09bn | |
| TOUCH: | 1,383-1,388p | 12-MONTH HIGH: | 1,480p | LOW: 1,002p |
| DIVIDEND YIELD: | 2.0% | PE RATIO: | 24 | |
| NET ASSET VALUE: | 317p* | NET DEBT: | 44% | |
| Half-year to | Turnover | Pre-tax | Earnings per | Dividend |
| 30 Jun | (£m) | profit (£m) | share (p) | per share (p) |
| 2016 | 259 | 19.4 | 16.8 | 8.5 |
| 2017 | 292 | 33.5 | 32.3 | 9.4 |
| % change | +13 | +73 | +92 | +11 |
| Ex-div: | 30 Nov | |||
| Payment: | 4 Jan | |||
| *Includes intangible assets of £167m, or 213p a share | ||||
