The board of Hill & Smith Holdings PLC announces that on Friday 16 December 2005 the Group completed the sale and leaseback to CGIS Group Limited of three properties at Duke Street, Fenton, Stoke on Trent; Marsh Road, Middlesbrough; and Mary Avenue, Birtley, County Durham (together the “ Properties”).

The Properties are occupied respectively by Barkers Engineering Limited, Lionweld Kennedy Flooring Limited and Birtley Building Products Limited, wholly-owned subsidiaries of the Company which are engaged in the Group’s core infrastructure and building products activities.

The gross sale consideration is £6.95m, which was paid in full in cash on completion. The book value of the Properties, including the cost of essential structural works, is £4.9m and the profit arising on disposal, after allowing for selling costs of £0.45m, is approximately £1.6m. The Properties are being leased back on 20 year leases at a combined initial annual rental of £576,000, which is subject to adjustment to open market rental every five years.

The net sale proceeds will, together with the net proceeds from the sale of the Digbeth property, which was announced on 12 December 2005, be retained by the Group for use in the business. The receipt of these proceeds has resulted in a significant reduction in the overall net indebtedness of the Group which will support the Group’s continuing expansion both organically and by acquisition.