Hill & Smith posts drop in FY profit but sees recovery in 2021

Hill & Smith reported a drop in full-year profit on Wednesday as it took a hit from the pandemic, but the company lifted its dividend and said it expects to see a recovery in trading this year.

In the year to 31 December 2020, underlying pre-tax profit fell 21% to £62.6m while revenue dipped 5% from 2019 to £660.5m.

Hill & Smith said it made a good start to the year, delivering organic revenue and profit growth in the first quarter. However, its trading performance from the middle of March was impacted by Covid-19 related business closures in France, India and certain UK businesses and lower levels of demand elsewhere in the group.

By mid-May, all of its businesses had reopened and the company said it experienced a strong recovery in trading in the second half.

"Despite the disruption caused by the pandemic, the group remained profitable throughout the year and our US businesses, which represented 41% of group revenues, have proved particularly resilient, delivering similar levels of revenue and profit to the prior year," it said.

Hill & Smith recommended a final dividend of 17.5p a share, taking the total dividend for the year to 26.7p, up from 10.6p in 2019.

Chief executive Paul Simmons said: "We are particularly pleased with the strong recovery in the second half of 2020, with trading approaching prior year levels. This provides a solid platform to build from as we enhance our organic growth plans and realign our portfolio to drive even better returns.

"Our organic and acquisitive growth plans are underpinned by a strong balance sheet as well as positive dynamics in our key end markets given the long term requirement to upgrade infrastructure in a sustainable way. We expect to see a good recovery in trading in 2021."

At 0810 GMT, the shares were up 2.2% at 1,351p.