Hill & Smith engineering group hails 'encouraging' performance

In particular Hill & Smith has benefited from a positive impact on its overseas earnings, from operations in Europe and the US, due to the recent weakness of sterling.

Based in Solihull the group includes its namesake motorway barriers factory at Bilston and Halesowen-based galvanising firm Joseph Ash, which also has sites in Telford, Walsall and Bilston.

In August it bought Oldbury-based street lighting firm Signature for £12.5 million.

For the period from July to the end of October underlying revenue was up 15% to £185 million, with a currency boost of £9.1m. Underlying operating profit was also up on last year.

Derek Muir, group chief executive, said: "Overall, conditions in many of our infrastructure end markets remain favourable and we continue to expect the group to report good progress for 2016."

The Government's road investment strategy is creating strong demand for the group's temporary safety barriers and Hill & Smith is expanding its rental fleet by another 10,000 metres to 289,000m to cope with expected demand in the coming months.

The firm said in its trading statement: "Internationally, overall we continue to make pleasing progress. Results are ahead of the same period last year, principally driven by a strong performance in our US business where we continue to see a growing acceptance of our steel temporary safety barrier."

Its utilities infrastructure arm in the UK had delivered a stronger performance after a slower first half with profits ahead. It has also bought security access firm Technocover for £10m

But its struggling pipe supports business is closing its UK and Thailand factories, retaining operations in India and the US.

Galvanising work is slightly ahead as its management focuses on efficiencies to improve margins. In the UK, however, volumes were 13% ahead boosted by the takeover of Premier Galvanizing last year. Profitability is ahead as it concenrates on small, quick turnaround work.

The two takeovers have boosted net debt to £127.4m by the end of October up from £99.5m at the end of June