Hill & Smith Holdings performs in-line with expectations
Underlying pre-tax profit has dropped by almost 25 per cent at Solihull-based manufacturer Hill & Smith, it was revealed this morning (8 August 2011).
Yet the business said it had performed "broadly" in line expectations in the first half of the financial year with revenue remaining virtually unchanged from last year's figure.
Revenue for the six months ended 30 June 2011 was £195.1m, compared to £193.5m for the first half of 2010. Underlying profit before tax dropped by 24.7 per cent, going from £21.5m in the first six months of 2010 to £16.2m for the first half of 2011.
However, the company's profits had been affected by two acquisitions made within the period. In March it bought The Paterson Group for $45m. And in May it bought ATA, for £9.8m, to give the company a footprint in the Scandinavian roads market.
The company also sold its wholly-owned subsidiary, Ash & Lacy Building Systems for £5.1m.
According to Hill & Smith, it has performed particularly well in US and France. But there had been "challenging and highly competitive conditions", particularly in the UK.
Derek Muir, chief executive of Hill & Smith, said: "We have made important strategic progress since the start of the year, further enhancing our international capabilities with two acquisitions in the US and Scandinavia, and disposing of the last of our major building and construction businesses.
"The group as a whole traded broadly in line with our expectations in the first half, with reasonable activity levels overall but with operating margins, as expected, being impacted by the highly competitive market conditions and rising material costs, particularly in the infrastructure arena.
"Whilst we enter the second half of the year with a strong order book in our utilities business, greater international diversity and with the benefit of the recent acquisitions, the board remains cautious given the difficult economic conditions and competitive pressures in certain of our markets. Against that background, we are clearly focused on managing the business and its cost base very tightly, taking proactive measures where necessary."
