Hill & Smith (HILS) H1 2026 earnings summary

Executive summary

• Delivered strong H1 2026 results with 5% organic revenue growth, double-digit US segment growth, and robust US infrastructure demand; US businesses contributed 66% of group revenue and 84% of operating profit.

• Operating margins remained stable at 17.0%, with US margin expansion offsetting weaker UK performance; return on invested capital increased to 26.7%.

• Interim dividend increased by 7% to $0.25 per share; ongoing GBP 100 million share buyback program with over half completed.

• Strategic progress included $50 million in US capacity expansion, successful integration of Freeberg and Hentech acquisitions, and UK business disposals.

• Full-year operating profit now expected to be modestly ahead of previous expectations, with a small year-on-year margin improvement.

Financial highlights

• Revenues reached $607 million, up 5% organically and 7% in constant currency; underlying operating profit rose 3% organically and 7% in constant currency to $102.9 million.

• Underlying EPS grew 9% to $0.906, reflecting higher pre-tax earnings and reduced share count.

• Interim dividend raised 7% to $0.25 per share; $58.6 million of GBP 100 million share buyback completed.

• Return on invested capital increased by 90 bps to 26.7%.

• Cash conversion was 50% in H1 due to working capital build, expected to recover to at least 80% in H2.

Outlook and guidance

• Full-year 2026 operating profit expected to be modestly ahead of previous guidance, with slight margin progression.

• US businesses expected to maintain positive momentum, supported by structural investments and active M&A pipeline.

• UK environment remains challenging; measures taken to strengthen operations and support margin recovery.

• Confident in medium-term growth outlook due to strong positions in high-growth infrastructure and data center markets.

• Capital expenditure guidance for FY26 is ~$75 million, including US capacity expansions.