- Hill and Smith
- 11 March 2026 08:44:02
Source: Sharecast
The FTSE 250 group posted revenue of £868.8m for the year ended 31 December, up 2% from £855.1m a year earlier, representing 3% growth on an organic constant currency basis and accelerating to 4% in the second half.
Underlying operating profit rose 5% to £151.3m, while the operating margin expanded to 17.4% from 16.8%.
Underlying earnings per share increased 8% to 132.2p.
Statutory profit before tax rose 7% to £111.3m from £104.5m, reflecting the impact of goodwill impairment and restructuring costs in the group’s US off-grid solar business.
Hill & Smith also reported strong cash generation, with underlying cash conversion of 91%, and said return on invested capital increased to 26.7% from 24.8%.
The board proposed a final dividend of 35.0p per share, taking the total dividend for the year to 53.0p, up 8%.
“The group has delivered a strong performance with momentum accelerating in the second half of the year,” said chief executive Rutger Helbing.
“In particular, our US platform businesses have delivered another year of excellent growth and margin expansion.”
He added that the company remained in “a very robust financial position, with the group highly cash generative and continuing to deliver strong returns for shareholders,” noting that its capital allocation strategy enabled it to invest in organic growth and pursue acquisitions while maintaining balance sheet strength.
Hill & Smith said it had agreed to two acquisitions as part of its strategy to expand in structurally growing niche infrastructure markets.
The company said it had reached an agreement to acquire an 80% stake in US-based Freeberg Industrial Fabrication for an initial $36m, or about £27m, subject to regulatory approval, with additional payments of up to $50m tied to profitability through 2031.
It also acquired Hentech Fabrication in Ireland for €7.3m, or about £6.4m.
Based in Escondido, California, Freeberg designs and manufactures custom enclosures and engineered solutions used in data centres, power generation and other infrastructure applications.
The business generated unaudited revenue of $31.7m and adjusted EBIT of $5.3m in the year to December.
Freeberg is expanding its manufacturing footprint with a new 160,000 square foot facility in Arizona, expected to begin operations in the second half of 2026, to meet rising demand, particularly from the data centre sector.
Hill & Smith said it expected to invest up to $12m in capital expenditure for the facility through 2026 and 2027.
Helbing said the acquisition would strengthen the group’s position in high-growth markets.
“We are pleased to have agreed the acquisition of Freeberg, a fast-growing business which we have followed and admired for some time.
“The business provides excellent exposure to a number of high growth end markets, including data centres and power generation, and is well aligned to our operating company framework.”
“We are excited about the opportunity Freeberg represents, offering attractive revenue growth potential, above that of our financial framework, as well as strong operating margins and underlying cash generation over the medium term.”
Hill & Smith said the transaction was expected to complete in the second quarter of 2026 and would be funded from existing borrowing facilities, with the acquisition expected to be earnings enhancing in 2026.
Looking ahead, the group said strong trading momentum in the US was expected to continue in 2026, although it remains cautious about the pace of recovery in UK market conditions and project activity.
Helbing said the company’s focus on structurally growing niche markets, disciplined capital allocation and agile operating model provided confidence that the group would “continue to make further good progress in 2026 and beyond.”
At 0823 GMT, shares in Hill & Smith were up 0.89% at 2,265p.
Reporting by Josh White for Sharecast.com.