West Midlands based construction and building products group Hill & Smith Holdings PLC has announced record profits for the period of six months ended June 30, 2005, and a 15.6 per cent increase in dividend.

Thanks mainly to organic growth, profit before taxation was 36.6 per cent ahead at £8.5m (2004: £6.2m) while operating profit (before financing costs) rose by 32.6 per cent to £10.4m (2004: £7.8m).

Adjusted earnings per share (before reorganisation and restructuring costs) rose by 35.1 per cent to 9.47p from 7.01p.

The interim dividend of 2.60p compares with 2.25p last year. Dividends have risen every year for the last six years and this year’s interim payment is covered 3.6 times by earnings.

Revenue in the half year reached £143.4m, 9.4 per cent higher than the £131.0m achieved in 2004, as the group responded to continuing strong markets for the maintenance and improvement of the transport infrastructure and in the building and construction sectors.

Chief executive David Grove said: “The group has delivered an excellent result in the last six months and cash flows from trading continue to be strongly positive.

“It is a vindication of our strategy of concentrating our investment and product development on our core businesses, which operate in areas where we are among the leaders and where the markets are strong.

“The increased spending on public sector projects, which is likely to be sustained, will continue to create opportunities for us.


”In the half year, we have demonstrated strong organic growth as well as benefiting from investment, including our purchase last November of a competitor, Lionweld Kennedy.

“We are winning new business, which is contributing greatly to our profits. Our order books are healthy and, if market conditions remain favourable, we look forward to another satisfactory performance in the year as a whole.”

The group’s infrastructure products include its vehicle restraint systems product range together with lighting poles and security fencing.

Product innovation, especially in response to increasing health and safety requirements in the construction and building industry, has boosted the group’s business.

The group’s sales of barriers and fencing have also benefited from the need for increased levels of security.

Contracts that have contributed to revenue included deals to supply wire rope safety fence to customers in Iceland, Abu Dhabi, where 78km of fence was supplied, Sweden and Ireland, where the group’s Varley and Gulliver subsidiary won a 2.1m Euro contract.

Mr Grove said: “Across a broad spectrum, our emphasis on innovation, investment in customer relationships and strategic investment has secured an excellent platform for growth in revenues.”

During the period, Hill & Smith made a major investment, taking a substantial stake in a market leading galvanizing and lighting pole fabricating business Zinkinvent GmbH, with significant operations in mainland Europe and the USA.

In a further strategic move, the group also bought the business and key trading assets of Techspan Limited, a manufacturer of electronic display signs for the road and rail transport and airport markets. The purchase will complement the group’s core activity.

Copies of the interim results are being posted to
shareholders on 7th September 2005