Hill & Smith enjoys 'best ever' trading

The company, based in the West Midlands but with operations around the world, revealed that its revenue had risen to a record £540.1 million in 2016, up 9% on a constant currency basis

Underlying pre-tax profits soared by 28% up to £68 m from £53m the year before.

Chief executive Derek Muir said: "Hill & Smith has delivered its best ever trading performance in 2016 with infrastructure spending in our key UK and US markets remaining strong.

"Our performance continues to be underpinned by our tried and tested strategy of international diversity together with the leading positions our businesses hold in their respective markets. Rising infrastructure investment, together with our focus on active portfolio management to drive shareholder value, resulted in record returns.

"Overall, despite political and macro-economic uncertainties, 2017 is again expected to be a year of progress."

Continuing UK investment in roads has provided a constant boost to its motorway products, from electronic signs to road safety barriers.

It has also seen a strong performance from its galvanizing businesses in the UK and US, while in France they did better than expected.

The company also completed five takeover deals during the year to expand its range of products.

Five acquisitions were completed during the year – including road and rail lighting firm Mallatite Signature in Oldbury – to extend and complement the product offer, although this pushed its net debt up to £112m from £91.5m at the end of 2015.

The group's strong performance is good news for its shareholders, with a 32% hike in final dividends to 17.9p that means the full year dividend for investors will be 26,4p, up 28%.

The group, based in Solihull, also revealed it had completed its plan to close and exit its pipe supports businesses in the UK and Thailand, transferring some of the work to its Indian factory.

Meanwhile Hill & Smith said "significant investment" in its Walsall, Chesterfield and Medway galvanizing plants had increased capacity and improved operational efficiencies.

As well as its Hill & Smith crash barriers business in Bilston, its galvanizing firm Joseph Ash it has sites Halesowen and Walsall.

Chairman Bill Whiteley, who is reitirng at the AGM in May, said: "The group benefits from the industrial and geographical spread of its markets and businesses, which not only provide a resilient base, but also opportunities for growth.

"Generating over 80% of revenue and 90% of underlying operating profit from its UK and US operations, the group principally operates in niche infrastructure markets where the overall outlook remains positive.

"In utilities, our UK and US activities are well placed to continue to benefit from the significant investment going into the replacement of ageing infrastructure and new infrastructure projects in those countries.

"Overall, with wider market conditions remaining favourable, we expect our galvanizing businesses to consolidate their strong market positions and to take advantage of the opportunities as they present themselves.

I"n the UK, the implementation of the Department of Transport's Road Investment Strategy is entering the third year of the initial five year plan, which provides certainty of funding through to 2020/21. We therefore have confidence that the group's road product portfolio will continue to benefit from the increased investment in the UK road infrastructure.

"In the US, the new administration has indicated that spending on US infrastructure, including building and repairing roads and bridges, is a priority and our businesses are well positioned to benefit should this increased investment materialise.

"Overall, despite political and macro-economic uncertainties, 2017 is again expected to be a year of progress."