West Midlands-based infrastructure, construction and building products group Hill & Smith Holdings PLC (Hill & Smith) has posted a 47 per cent rise in underlying pre tax profits for the first half of 2007.

For the six months ended 30 June, the group reported underlying profit before taxation (prior to reorganisation and property items) of £14.5m, 47 per cent higher than the comparable 2006 figure of £9.9m.

Underlying earnings per share (prior to reorganisation and property items) rose by 27.4 per cent to 14.4p from 11.3p

The interim dividend of 3.6p is 20 per cent up on last year’s figure and this year’s interim payment is covered 4.0 times by underlying earnings per share (2006: 3.8 times).

Sales revenues for the group in the half year were up by 19.5 per cent to £176.1m (2006: £147.4m).

The group’s core Infrastructure Products division increased its operating profit to £7.3m from £5.9m.  Operating profits in the Galvanizing division were well ahead of last year at £5.4m (2006: £3.4m) and the group’s Building and Construction Products division also climbed to £3.5m from £2.6m for the same period last year.

Chief executive Derek Muir said: “We have invested heavily in improving efficiency and innovation, enabling us to back up our promise of providing solutions.

“Our markets, especially those in the field of transport infrastructure, but also including such areas as security barriers and flood prevention, are growing strongly and we expect this to continue because of the clear and ongoing need for spending of this type.”

Mr Muir cites as an example the group’s achievement in winning its largest ever order from the UK’s Highways Agency. 

This contract, won by its electronic signs subsidiary Techspan Systems, means that Hill & Smith now has an approximate one third share of a four year £185m contract for the supply and installation of motorway and trunk road variable message signs across England. Ordering against this contract is expected to commence in 2008.

The group’s Infrastructure Products division supplies a range of products including security barriers and flood defences, the demand for which has stepped up in response to recent events, as well as road safety barriers and vehicle restraint systems.

Hill & Smith’s approach is to invest in core business areas, with a view to improving productivity as well as maximising value on the integration of carefully targeted acquisitions.  

Executive chairman David Grove highlights the recent acquisition of rival galvanizing business Metnor as an illustration of the group’s approach.  “We bought this galvanizing business because it was well equipped for our needs.

“We have fully integrated Metnor’s operations and relocated our Mallatite lighting columns business to the adjoining site in Chesterfield. This has enabled us to improve efficiency and will lead to ongoing productivity gains.”

The half year also saw a substantial contribution from the group’s 33.3 per cent investment in Zinkinvent GmbH, which controls Vista NV, a galvanizing business with significant operations in Benelux, France and the USA.