MIDAS PART TIPS UPDATE: Hill & Smith is on a roll – steel supplier in galvanizing 172% increase
Shopping spree: Alan Giddins
Hill & Smith is on a roll. Headquartered in Solihull, the group operates across the US and here, supplying a range of critical products for major infrastructure and energy projects, industrial buildings, roads and railways, as well as hotels, condominiums and homes.
The company’s kit list is vast, including galvanized steel for bridges and power stations, highway guardrails, solar generators for construction companies, and highly durable material for wharf jetties.
In both the UK and America, Hill & Smith is benefiting from a significant increase in spending on infrastructure, such as roads and power grids. Companies are also turning to Hill & Smith as they replace dirty diesel generators with solar powered alternatives. Widespread demand helped the group post record trading in the first four months of this year, with sales up 18 percent and earnings on track to exceed market forecasts for 2023.
Analysts now expect annual revenues of £860m, up nearly 18 per cent on last year, with profits up 16 per cent to £102m and dividends up 10 per cent to just over 38 pence.
Chairman Alan Giddins is optimistic – so much so that he has just spent £630,000 of his own money buying shares in the company. Giddins took charge in July last year after CEO Paul Simmons resigned with immediate effect. The pace of growth has accelerated since then, driven by strong performances from existing companies and some shrewd acquisitions, such as solar lighting company National Signal in California and Widnes Galvanizing in Cheshire.
Further deals are likely as Giddins looks to build on the company’s existing strengths and add new ones. The approach has been tried and tested. Hill & Smith has a strong track record, fueled by an entrepreneurial culture that permeates the entire workforce. The group has 21 subsidiaries and each is encouraged to operate quasi-independently so that they can be agile and driven, even though they receive support from the parent company.
Midas verdict: Midas tipped Hill & Smith in 2014, when the shares were £5.49. Today they are £14.92 with brokers suggesting the price could hit £17 over the next 12 months. Infrastructure improvements are at the top of the agenda here and in the US, with parties of all persuasions agreeing that more needs to be spent on transport links, energy networks and digital connectivity. Hill & Smith is ideally positioned to benefit from this trend and Giddins’ recent share purchase is a vote of confidence. A good investment for the long term.
Traded on: Main market Ticker: HILS Contact: hsgroup.com or 0121 704 7430