Hill & Smith FY operating profit to be 'slightly ahead' of forecasts

Hill & Smith said on Thursday that full-year operating profit will be "slightly ahead" of the top end of the range of analyst forecasts, assuming end markets remain open.

Forecasts are for FY20 operating profit of £61.6m to £64.7m.

In an update for the four months to the end of October, the company said it had seen an encouraging recovery in trading, with revenue down 3% from the same period a year ago to £235.2m. Underlying operating profit, meanwhile, was ahead of the prior year due to improved margins and tight cost control across all three divisions.

The road & security segment performed as expected during the period, while the utilities division performed well, it said, with operating profits up on last year thanks to good levels of demand in its US composites and power transmission businesses.

"In the UK we are continuing to see an encouraging recovery in trading in both our building products and industrial flooring businesses," Hill & Smith said.

In the galvanizing business, volumes are continuing to recover from weakness in the second quarter, with total group volumes 6% below this time last year.

"Medium term guidance remains difficult given the continuing uncertainties arising from the Covid-19 pandemic," the company said.

"Looking forward, we continue to focus on the growth opportunities across our portfolio. In particular, the group remains well placed to benefit from likely government stimulus through investment in infrastructure schemes."

Hill & Smith also said that Derek Muir will be stepping down from the board with immediate effect, with Paul Simmons formally taking over as chief executive, "following a thorough handover of responsibilities and with trading now back at more normalised levels".