Hill & Smith profits up despite cost headwinds

Construction and infrastructure materials supplier Hill & Smith reported a jump in full-year profit as the economy recovered from the Covid-19 pandemic and despite cost headwinds and labour shortages.

The company on Thursday said pre-tax profit for the year to December 31 rose 43% to £50.9m as revenue increased to £705m from £660.5m in 2020. The full-year dividend was lifted 16% to 31p a share.

Results were driven by Hill & Smith’s utilities division, which saw strong profit growth and margin progression on the back of strong demand in the US, despite a tough comparator in the prior year.

The galvanizing division reported operating profit margins at 20%, an improvement on the prior year, despite a less favourable country mix, driven by a strong recovery in the UK and France and solid performance in the US, the company said.

“We expect to make good progress in 2022, despite the ongoing supply chain and inflationary headwinds which we continue to actively manage,” Hill & Smith added.

“At this stage the consequences for the global economy of the tragic events in Ukraine are uncertain. While the Group has no operations in this part of the world and no direct and negligible indirect exposure to customers and suppliers in the region, we are carefully monitoring the situation.”

Looking to the medium-to-longer term, Hill & Smith said the outlook was supported by “strong market growth drivers for both sustainable infrastructure and safe transport”.

“In the US, all our businesses are well placed to benefit from the increased spend approved under the Infrastructure Investment and Jobs Act.”