Infrastructure firm Hill and Smith shares fall as UK business weighs on bottom line
Hill and Smith shares tumbled this morning after the infrastructure supplier flagged challenges in its UK business.
On an underlying basis, pre-tax profit rose 10 per cent to £63.2m in the six months ended June, while revenue stayed broadly level, rising 0.4 per cent to £422.7m.
But in a statement, the London-listed firm said its UK segment had experienced a “more challenging market backdrop, with reduced demand across certain public sector customers.”
“The second half outlook for our UK businesses is likely to remain challenging given budgetary pressures in the public sector, however we are cautiously optimistic for some level of recovery in 2025,” it added.
Shares fell over seven per cent in early trading.
Chief executive Alan Giddins said the company had delivered a “good first half performance, underpinned by continuing strong demand for our products and services in the US and the strong performance from our most recent acquisitions. We expect this momentum to continue into the second half in line with our recently upgraded expectations.
“In the medium to longer term, the group is well positioned in infrastructure markets with attractive structural growth drivers.
Over the half-year, the company completed three new acquisitions, including a £10m takeover of Trident Industries, for a total consideration of £22.3m.
Giddins added: “This strong position, together with our ability to use M and A to access new customers, markets and adjacent technologies, and the benefits of our agile operating model, underpins our confidence in the group’s positive trading outlook.”
Dividends per share rose 10 per cent to 16.5p.
Hill and Smith said it expected full-year operating profit to be “in line” with recently upgraded market expectations.