Hill & Smith (HILS) H2 2024 earnings summary

Executive summary

• Achieved record 2024 trading performance with 5% constant currency revenue growth and 20% profit growth, increasing operating margin by 200 basis points to 16.8%.

• U.S. businesses delivered strong results, contributing 76% of group operating profit, supported by bolt-on acquisitions and a return to organic revenue growth in H2.

• Four U.S. acquisitions completed for ~£60m; two non-core divestments at the start of 2025 to improve portfolio quality.

• Refreshed purpose and operating company framework, focusing on high-growth, resilient end markets.

Financial highlights

• Revenue reached £855.1m, up 5% at constant currency; operating profit rose 20% to £143.5m; operating margin increased to 16.8%.

• Underlying profit before tax up 18% to £132.6m; EPS up 16% to 122.6p; full-year dividend increased 14% to 49.0p per share.

• Cash conversion at 99%; free cash flow of £100.2m; ROIC reached 24.8%, up from 22.0%.

• Net debt/EBITDA: 0.3x, with significant facility headroom of £265.4m.

Outlook and guidance

• Expecting another year of good progress in 2025, with strong U.S. momentum and cautious optimism for U.K. recovery.

• FY25 guidance: capex ~£40m, interest ~£9m, cash conversion ~80%, effective tax rate ~25.5%.

• Growth supported by investment in critical infrastructure and technology change, especially in the U.S.

• U.K. outlook remains challenging due to public sector budget pressures; Indian business has strong growth prospects.