Hill & Smith slips as road projects pushed back

Hill & Smith, the maker of road safety barriers and other road infrastructure, confirmed a number of UK road schemes had been diverted into 2018 but that it still expects to meet full year targets.

Third quarter revenue was up 4% on an organic basis compared to last year at £201.5m or 6% if currency effects are included.

Underlying operating profit and operating margin are ahead of the same period last year, the FTSE 250 company said.

Chief executive Derek Muir said: "Overall, conditions in many of our infrastructure end markets remain favourable and we continue to expect the group to report good progress for 2017."

In the UK, a "small number" of road schemes have been delayed into 2018 resulting in lower utilisation of Hill & Smith temporary safety barriers.

"We continue to expect a ramp up in activity towards the end of the first quarter in 2018 and for utilisation to improve on 2017," the company said.

On the upside, restructuring of the variable message signs business has proceeded to plan with trading in line with expectations, while demand for other road furniture "remains strong", such as for hostile vehicle mitigation security bollards, bridge parapets and lighting columns. Furthermore, trading in Australia was said be ahead of expectations, while USA and Sweden delivered "good results".

UK utilities saw reduced volumes from the solar frame business, the US utilities businesses performed well and has been bolstered with the acquisition of a manufacturer of modular, high-efficiency cooling towers; US pipe supports saw lower volumes and lower profits; while Indian pipe supports business enjoyed strong demand ahead of expectations.

The galvanising business delivered revenue and profitability ahead of the same period last year as higher zinc input prices were passed through to customers and the higher costs marginally reducing operating margin.

In France and the UK, galvanising volumes were 5% and 4% ahead of the prior year respectively, down 5% in the USA due to the large LNG and solar projects running throughout most of 2016, or if excluding these projects, volumes were 4% ahead year on year.