Hill & Smith (HILS) H1 2025 earnings summary

Executive summary

• Achieved 4% constant currency revenue growth and 11% profit growth in H1, driven by strong US infrastructure demand and record order books.

• Operating margin expanded by 80bps to 17.0%, with EPS up 10% to 63.9p and interim dividend up 9% to 18.0p.

• Announced a £100m share buyback over 18 months, reflecting strong balance sheet and cash generation.

• Divested two non-core, loss-making businesses in Q1 to enhance portfolio focus and maintained an active M&A pipeline.

• UK markets remain challenging, especially in roads, but positive outlook for FY25 in line with market expectations.

Financial highlights

• H1 2025 revenue £431.6m (+4% constant currency), underlying operating profit £73.5m (+11% constant currency), margin up 80bps to 17.0%.

• Underlying profit before tax £69.0m (+9%), underlying EPS 63.9p (+10%).

• Free cash flow £51.5m, cash conversion 85%, ROIC 25.7% (up 320bps), net debt reduced to £55.3m, facility headroom £295.2m.

• Interim dividend per share 18.0p (+9% YoY).

Outlook and guidance

• Full-year expectations unchanged; FY25 underlying operating profit expected in line with consensus (£150.4m, range £147.3m–£153.0m).

• US platform businesses expected to maintain strong momentum, supported by infrastructure investment.

• UK revenue likely to remain subdued due to economic and budgetary pressures; no near-term recovery in roads.

• 2025 guidance: capex ~£40m, cash conversion ~80%, effective tax rate ~25.5%, interest ~£9m.