Hill & Smith PLC (CHIX:HILSl)

Half Year 2026 Hill & Smith PLC Earnings Call Transcript

Aug 12, 2026 / 09:15 AM GMT

Release Date Price: £29.2 (-5.35%)

Transcript

Key Points

Positve

Strong first half with 5% organic constant currency revenue growth, led by 14% growth in US businesses.
US engineered solutions delivered 14% OCC revenue growth with margins up 20 basis points to 18.1%.
Galvanizing services saw 11% OCC revenue growth and 18% OCC profit growth, with margins up 110 basis points to 25.6%.
Return on invested capital increased by 90 basis points to 26.7%, well above the 22% framework target.
Full-year 2026 operating profit expectations raised to be modestly ahead of previous guidance, with small margin improvement.
Strong balance sheet with covenant leverage at 0.4 times and over $340 million funding headroom.
Active M&A pipeline with successful integration of Freeburg and Hentech, and expectations of further acquisitions before year-end.
Strategic investments of $50 million in US capacity expansion, including V&S Utilities and galvanizing, to support future growth.
Interim dividend increased by 7% to $0.25 per share, reflecting confidence in cash generation.
UK restructuring actions expected to improve resilience and support margin recovery over time.

Negative

UK and India engineered solutions revenue and operating profit declined due to challenging market conditions.
UK margins were weaker, impacted by operational leverage from lower activity in road, industrial, and residential construction.
Cash conversion was only 50% in the first half, below the comparative period, due to working capital build.
Composites business margins were slightly lower due to adverse end market mix.
Freeburg's second-half margins are expected to be lower (mid-teens) as new Arizona facility ramps up.
UK environment is expected to remain challenging, with no immediate recovery in road investment.
Working capital increase was partly due to growth in US businesses, including V&S Utilities, which may pressure cash flow.
Disposal of permanent steel road barrier business reduces exposure to UK roads market, but also reduces revenue.
Restructuring costs of $3 million in UK group will impact near-term profitability.
Capacity constraints in US businesses, particularly in galvanizing and utilities, may limit near-term volume growth.

Refinitiv StreetEvents Event Transcript
E D I T E D V E R S I O N

HILS.L - Hill & Smith PLC
Half Year 2026 Hill & Smith PLC Earnings Call
Aug 12, 2026 / 09:15AM GMT

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Presentation
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Unidentified_1 [1]
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All right, good morning everyone and welcome to Hill & Smith 2026 interim results presentation.

In terms of the structure today, I will first take you through the highlights and Chris will then focus on the operating and financial review.

And I will finish with a strategic update and the outlook.

So let me start with the highlights.

I'm pleased to report that the group delivered a strong first half trading performance underpinned by robust infrastructure demand in the US.

Organic constant currency revenue growth for the period was 5% in line with our financial framework and was led by our US businesses which delivered 14% organic growth supported by both engineered solutions

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