Preliminary results • FY 2024
For the year ended 31 December 2024
Hill & Smith PLC
Hill & Smith PLC • FY 2024 Results | 2 |
Highlights
Strong results, continued momentum, refreshed framework
Record FY24 trading performance
- 5% revenue and 20% profit growth at constant currency
- Return to organic revenue growth in H2
- Operating margin up 200bps to16.8%
- Strong performance from US businesses which now represent 76% of Group profit
Active portfolio management
- Four value enhancing US acquisitions for aggregate expected consideration of c.£60m
- Divestment of two non-core businesses in Q1 2025 further improves quality of portfolio
- M&A pipeline remains active
Strong cash generation and returns
- FY24 cash conversion 99%
- ROIC increased to 24.8% (2023: 22.0%)
- EPS up 16% to 122.6p
- Final dividend proposed 32.5p, up 16% making total dividend of 49.0p
Positive outlook with refreshed strategic and financial framework
- Enhanced focus on faster, structurally growing end markets
- Updated targets for operating margin and ROIC reflecting growth potential
- Group expects to make further progress in FY25 and beyond
Hill & Smith PLC • FY 2024 Results | 3 |
2024 results
Record results underpinned by strong growth in Engineered Solutions and
Galvanizing Services businesses in the US
Revenue | Operating profit | ||
£855.1m +5% | £143.5m +20% | ||
(2023: £829.8m) | constant currency | (2023: £122.5m) | constant currency |
Operating margin | Profit before tax | |
16.8% +200bps | £132.6m +18% | |
(2023: 14.8%) | (2023: £111.9m) |
Earnings per share | Dividend per share | |
122.6p +16% | 49.0p | +14% |
(2023: 105.4p) | (2023: 43.0p) |
Hill & Smith PLC • FY 2024 Results | 4 |
Group overview
Our faster growing, higher margin US businesses contributed 76% of operating profit in 2024
3%
38% Revenue £855.1m
28%
59%
By geography
- US
- UK
- Rest of World
By division
Engineered |
Solutions |
2%
22%
Operating
profit
£143.5m 76%
11%
Operating
Revenue 49% £855.1m
23%
| Galvanizing |
Services | |
| Roads & |
Security |
profit
35% £143.5m 54%
Hill & Smith PLC • FY 2024 Results | 5 |
Engineered Solutions
Excellent performance, reflecting strong organic growth in US and contribution of recent acquisitions
US
• | Strong demand for composite solutions across |
range of end markets | |
• | High demand for structural steel projects to |
upgrade electrical grid infrastructure |
Constant | ||||
2024 | 2023 | Currency | OCC | |
Revenue (£m) | 418.7 | 367.0 | +17% | +5% |
Operating profit (£m) | 77.8 | 64.4 | +25% | +10% |
Operating margin | 18.6% | 17.5% | ||
• Good demand for engineered supports driven by |
industrial projects |
• Four complementary bolt-on acquisitions made in |
2024, all performing well |
• Outlook: positive, supported by investment to |
upgrade critical infrastructure and onshore vital |
components |
UK and India
- Lower UK revenue reflecting subdued residential construction market and lower pricing with reduced steel input costs
- Good growth in India underpinned by international LNG project demand
- Outlook: mixed in UK, good growth prospects for India
By geography
5%
19%
Revenue £418.7m
76%
US +8% OCC
UK -7% OCC
India +15% OCC
By end market
4%4%3%
9%31%
Revenue £418.7m
33% | 16% | |
Electrical grid infrastructure | Industrial infrastructure | |
Other construction | Oil, gas, chemicals & energy | |
Transportation | Roads & bridges | |
Other |
Hill & Smith PLC • FY 2024 Results | 6 |
Galvanizing Services
Record performance driven by volume growth in our higher margin US business
US
- Impressive performance, with 9% volume growth and good margin expansion
- Strong demand from baseload customers in roads & bridges and transportation sectors
- Growth in utility, data centre and clean energy segments
- Outlook: remains strong, ongoing infrastructure investment expected to support continued volume growth
UK
- Challenging year with 2023 market slowdown continuing into H1 2024
- Good H2 volume growth supported by sales actions and some market recovery
- Benefits of simplified operational and commercial structure with enhanced focus on customer service
- Outlook: improved for 2025, infrastructure and structural steel markets expected to be stable
Constant | ||||||||||||||
2024 | 2023 | Currency | OCC | |||||||||||
Revenue (£m) | 197.8 | 196.7 | +2% | +2% | ||||||||||
Operating profit (£m) | 50.3 | 45.7 | +13% | +12% | ||||||||||
Operating margin | 25.4% | 23.2% | ||||||||||||
By geography | By end market | |||||||||||||
14% | 15% | |||||||||||||
5% | ||||||||||||||
41% | Revenue | 5% | Revenue | 15% | ||||||||||
£197.8m | 59% | 8% | £197.8m | |||||||||||
38% | ||||||||||||||
US +6% OCC | Roads & bridges | Industrial infrastructure | ||||||||||||
Other construction | Transportation | |||||||||||||
UK -4% OCC | ||||||||||||||
Electrical grid infrastructure | Oil, gas, chemicals & energy | |||||||||||||
Other
Hill & Smith PLC • FY 2024 Results | 7 |
Roads & Security
Lower revenue due to subdued demand, but improved profitability due to non repeat of certain FY23 one-off charges
UK
- Barrier rental delivered robust performance
- Wider UK roads portfolio impacted by reduced demand and budgetary pressures
- Outlook: remains challenging with a business focus on cost management and diversification
US
- Expected lower demand in off-grid solar lighting vs strong PY comparator
- Performance of core road barrier and attenuator product lines encouraging
- Continued challenges in message board business. Action being taken to address
Divestments improve portfolio quality
- Q1 2025 divestment of a small loss making UK security business and our subscale, loss making Australian roads business
Constant | ||||||||||||
2024 | 2023 | Currency | OCC | |||||||||
Revenue (£m) | 238.6 | 266.1 | -9% | -9% | ||||||||
Operating profit (£m) | 15.4 | 12.4 | +26% | +26% | ||||||||
Operating margin | 6.5% | 4.7% | ||||||||||
By geography | By product | |||||||||||
1% | ||||||||||||
30% | 25% | |||||||||||
40% | ||||||||||||
Revenue | Revenue | |||||||||||
£238.6m | £238.6m | |||||||||||
69% | 22% | |||||||||||
13% | ||||||||||||
US -15% OCC | Barrier products | Off-grid solar | ||||||||||
UK -5% OCC | ||||||||||||
Security | Other Roads | |||||||||||
Australia -41% OCC | ||||||||||||
Hill & Smith PLC • FY 2024 Results | 8 |
Cash generation and financial position
Hill & Smith continues to be highly cash generative with £100.2m of free cash flow
Strong cash conversion
- 99% cash conversion
- Free cash flow £100.2m
- Supporting acquisition strategy and dividend policy
Allocation of capital to acquisitions
- c.£50m cash outlay in the year on value accretive US acquisitions
- Target to invest £50-70m per annum on M&A
Significant balance sheet capacity
- Covenant net debt to EBITDA: 0.3 times
- £265.4m facility headroom
Return on invested capital at 24.8%
- Increase of 280 basis points
- Faster growth in higher margin, lower capital intensity US businesses
£m | 2024 | 2023 |
Underlying operating profit | 143.5 | 122.5 |
Depreciation and amortisation | 32.4 | 30.2 |
Underlying EBITDA | 175.9 | 152.7 |
Working capital | 0.6 | 22.8 |
Capital expenditure (net) | (25.2) | (28.5) |
Repayments of lease liabilities | (9.0) | (9.4) |
Movements in provisions/other | (0.2) | 3.5 |
Underlying operating cash flow | 142.1 | 141.1 |
Underlying cash conversion | 99% | 115% |
Restructuring spend (net) | (1.4) | 0.9 |
Pension deficit payments | (3.7) | (3.7) |
Interest paid (incl. IFRS 16) | (10.3) | (9.7) |
Tax paid | (26.5) | (31.7) |
Free cash flow | 100.2 | 96.9 |
Dividends | (34.5) | (28.0) |
M&A | (49.9) | (56.6) |
Lease movement under IFRS 16 | (4.3) | (2.8) |
Share issues/other (net) | 0.7 | (1.4) |
Net cash flow | 12.2 | 8.1 |
FX impact | (0.7) | 3.2 |
Net debt | 96.9 | 108.4 |
Hill & Smith PLC • FY 2024 Results | 9 |
Good progress on M&A
We completed four highly complementary US acquisitions in 2024 for aggregate expected consideration of £58.5m
Whitlow Electric
- Acquired September 2024: $30.2m (9.7x EBIT)
- Supplies structural steel and substation components for electrical infrastructure
- Highly complementary, broadening geographic footprint into the Southeast of the US
Trident Industries
- Acquired July 2024: initial consideration $13.5m, further consideration up to $32.5m (8.1x EBIT*)
- Designs and supplies highly resilient composite utility poles serving US and Caribbean customers
FM Stainless
- Acquired March 2024: $8.3m (5.2x EBIT)
- Based in Georgia, manufactures stainless steel pipe supports, principally for attractive water and wastewater markets
- Provides cross-selling opportunities
Capital Steel
- Acquired January 2024: $6.3m (6.3x EBIT)
- Supplies structural steel and substation components for electrical infrastructure
- Expands customer base into New Jersey
All successfully integrated and trading in line with or ahead of expectations
* Based on FY23 adjusted EBIT at full payout
Hill & Smith PLC • FY 2024 Results | 10 |
Our 2025 reporting structure
We have changed our divisional reporting structure for 2025 to better reflect the way the Group is now managed, enabling closer focus on geographic end markets and growth opportunities
Indicative FY24 divisional split under new reporting structure
17% | |||||
31% | | US Engineered | |||
Solutions | Operating | ||||
Revenue | 46% | 48% | |||
| UK & India | profit | |||
£855.1m | |||||
Engineered | £143.5m | ||||
Solutions | 35% | ||||
23% | | Galvanizing | |||
Services | |||||
The new divisional reporting structure is as follows:
- US Engineered Solutions: comprising all US operating companies excluding Galvanizing Services
- UK and India Engineered Solutions: comprising all UK operating companies and India, excluding Galvanizing Services
- Galvanizing Services: no change
We will report under the new structure at our half-year results in August 2025.