REG - Hill & Smith PLC - Full Year Results
Today 07:00
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RNS Number : 1244W Hill & Smith PLC 11 March 2026
11 March 2026
Hill & Smith PLC
Full Year Results for the year ended 31 December 2025
Strong US performance underpins good FY25 results; well placed for further
progress in FY26
Two highly complementary acquisitions agreed
Hill & Smith PLC ("Hill & Smith" or "the Group"), a leading provider
of solutions that enhance the resilience of vital infrastructure and the built
environment, announces its preliminary results for the year ended 31 December
2025.
Financial Results
Underlying (*) Statutory
31 Dec 2025 31 Dec 2024 Reported % Constant Currency % OCC (^) % 31 Dec 2025 31 Dec 2024 Change %
Revenue £868.8m £855.1m +2% +4% +3% £868.8m £855.1m +2%
Operating profit £151.3m £143.5m +5% +8% +6% £120.1m £115.4m +4%
Operating margin 17.4% 16.8% +60bps 13.8% 13.5% +30bps
Profit before tax £142.5m £132.6m +7% £111.3m £104.5m +7%
Earnings per share 132.2p 122.6p +8% 102.7p 95.0p +8%
Dividend per share 53.0p 49.0p +8% 53.0p 49.0p +8%
Key Highlights:
Good trading performance with increased momentum in H2
· Full year OCC revenue growth of 3%, accelerating to 4% in the
second half. Performance reflected strong growth from US platform businesses
· Underlying operating profit growth of 6% OCC
· Positive underlying operating margin expansion to 17.4% (2024:
16.8%)
· Underlying EPS up 8% to 132.2p (2024: 122.6p)
· Statutory profit before tax of £111.3m (2024: £104.5m) impacted
by goodwill impairment and restructuring costs in US off-grid solar business
Strong financial position with excellent cash generation and returns
· Underlying cash conversion 91% (2024: 99%)
· ROIC up 190bps to 26.7% (2024: 24.8%)
· Covenant leverage at 0.1 times, providing significant capital
allocation flexibility
· Final dividend proposed of 35.0p, making a total dividend of
53.0p, up 8%
Successful delivery of M&A strategy
· Agreement, subject to regulatory approvals, to acquire an 80%
stake in Freeberg Industrial Fabrication Corp. ("Freeberg") in the US for
consideration of $36m (c.£27m)
· Acquisition of Hentech Fabrication Limited ("Hentech") in Ireland
for €7.3m (c.£6.4m)
· We continue to have an active M&A pipeline
Disciplined capital allocation
· Additional £35m to be invested to expand network capacity in
higher growth US platform businesses over next two years to accelerate medium
and long term growth
· £100m share buyback initiated in August 2025, with £32.5m
completed as at 9 March 2026
Confident of making further good progress in FY26 and beyond
· Strong US trading momentum expected to continue in 2026
· Remain cautious about the degree of recovery in UK market
conditions and level of project activity during 2026
Rutger Helbing, Chief Executive Officer, commenting on the results, said:
"The Group has delivered a strong performance with momentum accelerating in
the second half of the year. In particular, our US platform businesses have
delivered another year of excellent growth and margin expansion.
"We remain in a very robust financial position, with the Group highly cash
generative and continuing to deliver strong returns for shareholders. Our
disciplined approach to capital allocation enables us to invest for organic
growth and pursue an attractive pipeline of M&A opportunities, and we are
pleased to have agreed two highly complementary acquisitions in Freeberg and
Hentech. We are also able to continue to return cash to shareholders, while
maintaining balance sheet strength and growing returns on capital.
"Alongside this, we have continued to make good strategic progress,
positioning the Group for future growth. Our focus on structurally growing
niche end markets, together with our disciplined approach to capital
allocation and the benefits of our agile operating model, provide confidence
that the Group will continue to make further good progress in 2026 and
beyond."
For further information, please contact:
Hill & Smith PLC
Rutger Helbing, Chief Executive Officer
Tel: +44 (0)121 704 7434
Chris McLeish, Chief Financial Officer
MHP
Reg Hoare/Rachel Farrington/Catherine
Chapman Tel: +44
(0)7801 894577
Email: hillandsmith@mhpgroup.com
There will be an in-person presentation for analysts and institutional
investors this morning at 10:00am, hosted at Deutsche Bank, 21 Moorfields,
London EC2Y 9DB, as well as a webcast and conference call with a facility for
Q&A for virtual attendees. To register for the webcast, please use this
link
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.
* All underlying measures exclude certain non-underlying items, which are as
detailed in note 4 to the Financial Statements and described in the Financial
Review. References to an underlying profit measure throughout this
announcement are made on this basis. Non-underlying items are presented
separately in the Consolidated Income Statement where, in the Directors'
judgement, the quantum, nature or volatility of such items gives further
information to obtain a proper understanding of the underlying performance of
the business. Underlying measures are deemed alternative performance measures
("APMs") under the European Securities and Markets Authority guidelines and a
reconciliation to the closest IFRS equivalent measure is detailed in note 3 to
the financial statements. They are presented on a consistent basis over time
to assist in comparison of performance.
^ Where we refer to organic constant currency (OCC) movements, these exclude
the impact of currency translation effects and acquisitions, disposals and
closures of subsidiary businesses. In respect of acquisitions, the amounts
referred to represent the amounts for the period in the current year that the
business was not held in the prior year. In respect of disposals and closures
of subsidiary businesses, the amounts referred to represent the amounts for
the period in the prior year that the business was not held in the current
year. Constant currency amounts are prepared using exchange rates which
prevailed in the current year.
Notes to Editors
Hill & Smith PLC is a leading provider of solutions that enhance the
resilience of vital infrastructure and the built environment. The Group
employs c.4,500 people, with the majority employed by its autonomous, agile,
customer focussed operating businesses based in the US, UK and India. The
Group office is in the UK and Hill & Smith PLC is quoted on the London
Stock Exchange (LSE: HILS.L).
The Group's operating companies are organised into three divisions:
- US Engineered Solutions
- UK & India Engineered Solutions
- Galvanizing Services
Our US Engineered Solutions businesses provide a range of composite and steel
solutions for infrastructure construction including energy transmission &
distribution, data centres, waterfront protection, transportation, and other
industrial facilities. The division also supplies engineered supports for the
water, power and liquid natural gas markets, seismic protection solutions for
commercial construction, road work zone safety products and off-grid solar
lighting and power solutions.
Our UK Engineered Solutions businesses supply products and services to a range
of end markets including transport infrastructure, residential construction,
data centres, and other industrial and commercial construction. The division
also supplies hostile vehicle mitigation (HVM) and off-grid solar lighting
solutions. Our business in India manufactures engineered supports primarily
for energy markets.
Our Galvanizing Services operations, based in the US and UK, increase the
sustainability and maintenance free life of steel products including
structural steelwork, lighting, bridges, and other products for infrastructure
and construction end markets.
Chief Executive's Review
2025 review
I am pleased to report that the Group has delivered a strong performance,
underpinned by the excellent performance of our US businesses. I would like to
pay tribute to the skill and commitment of our leadership teams who, along
with colleagues across the Group, have enabled us to achieve another year of
robust progress.
Our US operations now account for 79% of Group underlying operating profit and
continue to benefit from strong demand for our infrastructure products and
solutions, serving a range of attractive structural growth markets that are
being driven by ongoing investment to upgrade and onshore vital infrastructure
and support technology change. As expected, our UK businesses experienced a
more challenging market backdrop with weaker demand, particularly in the
second half of the year, delivering a result which was below the comparative
year.
Group revenue for the full year was up 3% on an organic constant currency
('OCC') basis, with growth accelerating to 4% during the second half of the
year. We achieved strong year-on-year OCC revenue growth in our higher margin
US Engineered Solutions (+6%) and Galvanizing Services (+10%) businesses, with
growth in both accelerating during the second half of the year. Underlying
operating profit was up 8% on a constant currency basis, with OCC growth of
6%. Underlying operating margin for the year increased by 60bps to 17.4%,
reflecting an improved portfolio mix, with further margin expansion in our US
Engineered Solutions and Galvanizing Services businesses.
US Engineered Solutions delivered another impressive performance, with OCC
revenue growth of 6% and an increase in operating margin to 18.0% (2024:
17.8%). Performance reflected high demand for our products and services across
our platform businesses, which serve a range of attractive structural growth
markets including electricity transmission & distribution, data centres,
water and wastewater, and infrastructure construction. Momentum increased as
the year progressed, with OCC revenue growth of 8% in the second half.
Galvanizing Services delivered another record performance, reflecting strong
momentum in our higher-margin US business which delivered 13% OCC revenue
growth with volume also up 13%. Volume growth in the US accelerated during the
second half, following a slower start to the year due to adverse weather
conditions. Our UK galvanizing business also delivered good progress, with 5%
OCC revenue growth, driven by a 9% year-on-year volume increase.
UK & India Engineered Solutions experienced a more challenging market
backdrop. Revenue reduced by 6% on an OCC basis, with underlying operating
profit reducing by 11% in constant currency, reflecting lower activity levels
across many of the Group's UK markets while maintaining market share. Whilst
we made good progress in increasing our share of revenue from data centre end
markets via our perimeter security and access flooring businesses, the overall
demand backdrop in the UK remains weak, with limited visibility around the
scale and timing of recovery in the Group's key infrastructure and
construction markets. As a result, we are assessing a range of measures to
strengthen our UK operations overall, making our businesses more resilient
in the current environment, and better able to capitalise upon opportunities
as markets recover.
The Group continues to allocate capital in a disciplined way. During the year
we invested a total of around £10m in several capacity expansion projects to
support the growing demand in US Engineered Solutions. Given the strength and
forward visibility of demand, and with capacity utilisation at higher levels,
we will invest £35m to expand network capacity in our US transmission &
distribution and galvanizing operations over the next two years, increasing
capacity within their existing network of facilities. Benefits are expected
from the 2027 year, with returns from 2028 at least in line with the Group's
financial framework.
In March 2026, we reached agreement to acquire Freeberg for a headline
consideration of $36m (c.£27m) for 80% of the equity, subject to US
regulatory approvals which are expected during the second quarter. Further
consideration is payable for the remaining 20% of equity dependent on future
profitability, up to a maximum of $50m (c.£37m). Freeberg, a leading US
designer and manufacturer of custom enclosures and other engineered solutions,
is closely aligned with our operating company framework and will increase the
Group's exposure to some of our higher growth priority end markets. We also
completed the bolt-on acquisition of Hentech, an Irish manufacturer of
engineered steel solutions primarily for European data centre markets, for a
consideration of €7.3m (c.£6.4m). We expect the acquisitions to be earnings
enhancing in 2026. We have strengthened our resources focused on deal sourcing
and continue to actively progress a pipeline of further attractive M&A
opportunities, aligned to our priority end market framework.
In addition to our growing dividend, we also announced a £100m share buyback
in August 2025, providing additional returns to shareholders within our
capital allocation framework and reflecting the Group's strong balance sheet.
The Group remains highly cash generative and continues to deliver strong
returns: cash conversion for the year was 91% (2024: 99%), above our targeted
level of 80%, with return on invested capital (ROIC) increasing by 190 bps to
26.7% (2024: 24.8%). The Group's balance sheet continues to strengthen, and
year end covenant leverage of 0.1 times provides significant flexibility to
support both organic and inorganic investment for growth, alongside
shareholder returns from a growing dividend and the ongoing share buyback
programme.
Strategic Update
Strategic framework
The Group is exposed to attractive infrastructure and built environment end
markets with structural growth drivers, and has agile and responsive operating
companies well positioned to succeed, underpinning the Board's confidence in
the Group's prospects and ongoing value creation for our shareholders. The
Group has made significant progress in recent years and, to further underpin
our growth ambitions, last year we set out our refreshed purpose, end market
focus and operating company framework, all of which are now firmly embedded
across the business. I am pleased by the impact this is having on the rigour
and consistency of decision-making processes within our local, regional and
central teams.
In addition, during 2025 we established a set of Group-wide values, being the
guiding principles that define the culture of our organisation:
· Act with Care - How we do things is just as important as what we do
· Be Bold in what we create - We bring fresh ideas, curiosity and
entrepreneurial energy to everything we make
· Customer First - Always - We listen closely and act decisively to
find solutions that add value and help our customers to grow
· Deliver as a Team - We strongly believe working as a team will
always bring us the best solutions
· Empower through Trust - Based on common goals and a track record
of consistent outstanding results
In our decentralised operating model, the ability to attract, retain and
develop the most talented people is central to our success. These Group values
will provide a framework for our talent development and succession planning
programmes, which will be a critical area of focus for us in the years ahead.
Hill & Smith operating company framework
A Hill & Smith operating company has a strong focus on customer service
and a deep understanding of customer needs. This allows our businesses to
create innovative value-add solutions for customers and to drive
differentiation versus their competitors. By doing so, our teams can create
and maintain a source of competitive advantage, enabling us to grow our market
positions over time. Our businesses are also experts in their specific
manufacturing or industrial processes which are typically low to medium in
capital intensity.
Alongside this, our decentralised operating model promotes a highly driven and
entrepreneurial culture where we foster very capable and agile local
management teams who drive growth in both core and adjacent markets. Our
objective is to develop high quality platform businesses with good potential
for bolt-on M&A. Our local management teams play a key role in identifying
potential M&A opportunities, building close relationships with owners and
leading on acquisition integration. We have a small central team responsible
for Group capital allocation and performance management. This team also
ensures that the right controls and KPIs are in place, and works with local
management in setting the ambition for each operating company.
An enhanced focus on priority end markets
We are focused on end markets which serve vital infrastructure and the built
environment, which have long-term growth drivers, and which benefit from
secular tailwinds given the growing need for upgrade and renewal to maintain a
properly functioning economy. Our particular focus is on businesses which are
leaders in niche markets with high barriers to entry and where our offering is
typically a small fraction of the total system cost for customers.
As set out in March 2025, we categorise our end markets into four groups:
· High growth emerging markets: including data centres, renewables and
gigafactories
· Resilient growth anchors: including electrical transmission &
distribution and water infrastructure
· Stable growth markets: including transport products, transport
infrastructure and public construction
· Cyclically sensitive markets: including industrial, residential and
commercial construction
This disciplined focus on end market dynamics enables us to set the ambition
for our operating companies to drive further long-term growth. It also
informs our capital allocation, resource planning and portfolio management
decision making.
Over time, we expect to increase our exposure to higher growth markets, and
during 2025 we grew the proportion of our revenues from high growth emerging
markets and resilient growth anchors to 34% (2024: 23%).
Active portfolio management
The strategic framework we set out 12 months ago has been crucial in informing
the decision-making processes for both organic and inorganic growth
investments.
Our M&A strategy is underpinned by a strong balance sheet, capable of
supporting organic growth while also allowing us to deploy capital to fund
value enhancing acquisitions. We are pleased to have agreed the acquisitions
of Freeberg and Hentech, providing excellent exposure to a number of our
higher growth priority end markets including data centres and power
generation, and I continue to see significant opportunities to use M&A to
help us accelerate growth. During the year we strengthened our resources
focused on deal sourcing and remain confident in our pipeline of further
attractive opportunities aligned to our operating company and priority end
market framework.
We continue to take a disciplined approach to portfolio management. As part of
this, in the first quarter of 2025, we divested two non-core, loss-making
businesses (comprising £12m total revenue in 2024).
Performance against our medium-term financial framework
Our disciplined financial framework is one of the foundations of the Group's
long-term success. I believe that the ability to deliver organic growth
through the cycle, alongside value enhancing acquisitions, will continue to
result in superior earnings growth. A clear focus on cash generation and
returns enables the cash generated to be re-invested in high growth, high
return opportunities, in line with our disciplined capital allocation
framework, while maintaining a strong balance sheet.
Our medium-term financial targets, which were refreshed last year, are as
follows:
· Organic revenue growth: 5% -7%
· Total revenue growth including acquisitions: 10%+
· Operating profit margin: 18%+
· Return on invested capital (ROIC): 22%+
· Cash conversion: 80%+
· Covenant leverage: 1-2 times
In 2025, the Group performed well against this framework. The organic
revenue growth of 3% was solid, and ahead of the prior year; in particular,
growth was within or ahead of our target range in our higher margin US
businesses, with Engineered Solutions +6% and Galvanizing +13%, partly offset
by weaker market demand in the UK (-3%). Pleasingly, Group OCC revenue growth
accelerated during the second half of the year to 4%, from 2% during the first
half. Going forward, we remain focused on driving the organic revenue growth
of the business, and, for 2026, have introduced a new measure within Group and
local management bonus targets.
Our operating profit margin expanded by 60bps to 17.4%, reflecting the mix
benefit from growth in our higher margin US businesses. We are confident that
the Group can deliver our target of 18%+ operating profit margin through the
cycle, given the structural growth drivers in the US and potential improvement
in UK margins as a result of a combination of end market recovery and the
benefit of measures being taken to strengthen our UK operations.
Return on invested capital (ROIC) was excellent, strengthening further to
26.7% (2024: 24.8%), driven by the trading performance of our higher return US
businesses and a continued focus on capital efficiency across the Group. We
retain our ROIC target of at least 22%, mindful of maintaining the flexibility
to deploy capital into value enhancing M&A where initial returns may be
below the targeted level.
Our cash conversion target of 80%+ reflects the Group's track record of strong
cash generation, while also allowing for more significant investment in
strategic growth capex, as appropriate, through the cycle. We achieved a
strong outcome of 91% in 2025 with all parts of the business performing in
line with, or above, the Group's target.
Our approach to capital allocation
The Group follows a disciplined approach to capital allocation.
As a first priority, we allocate capital to support organic growth, with a
focus on higher return, structurally growing end markets aligned with our
priority markets. We require our operating companies to manage working capital
efficiently and we invest selectively in capital projects, talent and
innovation to support future organic growth. Having completed the expansion of
our engineered supports facility in Louisiana in 2025, we plan to invest
further organic growth capital of around £35m in our US transmission &
distribution and galvanizing operations over the next two years, increasing
capacity within their existing network of facilities. This focused
investment in our higher growth, higher return US platform businesses will
enable us to capitalise on the long-term structural growth dynamics in their
end markets. Overall, excluding our new acquisitions we expect capital
expenditure of £50m in 2026, with around half of this relating to these major
growth investments.
Secondly, we allocate capital to inorganic investment, with a focus on
businesses which have a clear alignment with our purpose, end market
priorities and strategic framework with good long-term growth and
profitability potential. Based on our highly cash generative model, we
continue to target reinvestment of around £50m - £70m each year on value
enhancing acquisitions aligned with our strategic framework. We follow a
structured approach to acquisitions based on an agreed set of criteria, and
expect acquisitions to achieve returns above our Group cost of capital within
a three-year timeframe. Following the Freeberg and Hentech acquisitions, there
remains an active pipeline of M&A opportunities.
Thirdly, we aim to deliver a growing dividend, understanding the importance of
providing consistent and growing returns to our shareholders. In 2025 we have
grown the full year dividend by 8%.
Lastly, we will return surplus capital to shareholders where leverage is
expected to fall below 0.5 times for a sustained period of time. In August
2025, having assessed the capital requirements of the business to fund organic
growth, execute on acquisitions and provide a growing dividend, the Board
concluded that, given the strength of the Group's balance sheet and cash
generation, we had the capacity to make an additional return of capital to
shareholders and remain comfortably within our target leverage range of 1-2x.
As a result, the Company announced a share buyback of £100m over a period of
around 18 months. As at 31 December 2025, £20m had been returned to
shareholders under this programme.
Adoption of US dollar for Group reporting
The Group has historically reported its results in sterling since this was the
primary currency in which the cash flows of the Group were denominated. Over
time, as the asset footprint in the US has grown, the proportion of the
Group's revenues and operating profits originating in US dollars has
increased, with 63% and 79% of revenue and underlying operating profit
respectively being generated by our US businesses in 2025.
As such, the Board believes that a change in presentational currency to the US
dollar will provide investors and other stakeholders with greater transparency
of the Group's performance and reduced foreign exchange volatility over time.
The Group intends to report its financial results in US dollars starting with
the six months ending 30 June 2026, and intends to publish comparative
information on this basis ahead of those results.
Commencing with the interim dividend for the year ending 31 December 2026, due
to be paid in January 2027, dividends will be declared in US dollars.
Shareholders will continue to receive dividends in sterling unless they have
elected through the Company's registrar to receive dividends in US dollars.
Sustainability
Sustainability underpins the Group's growth strategy, and we remain committed
to making progress against our sustainability focus areas and goals. The
health and safety of our people remains our top priority, and we delivered a
9% reduction in our Lost Time Incident Rate (LTIR) to 0.30 in 2025 (2024:
0.33). We are committed to achieving best-in-class standards for health and
safety for all colleagues, and will be launching a new cultural change
programme entitled "I Own Safety" across the Group during 2026.
Talented people are critical to the Group's success, and we have taken
important steps to strengthen our talent pool during the year. We carried out
our annual Group-wide engagement survey in September 2025, with 88% of our
employees participating, up from 83% last year. Overall, our engagement score
improved to 58% (2024: 56%), although this remains below the relevant global
benchmark. Having taken time to listen to, and understand, the feedback from
our employees, we are committed to taking a range of actions to increase
engagement further as we move forwards.
We continued to make good progress in reducing carbon during 2025, achieving a
19% reduction in greenhouse gas emissions compared to the prior year. A number
of important initiatives have been rolled out across the Group, most notably
the use of HVO (Hydrotreated Vegetable Oil) in place of diesel at several of
our sites and a range of waste heat recovery measures, particularly at our
galvanizing facilities. In addition, our transition to renewable energy
contracts has continued, with 91% of our electricity in 2025 sourced through
green tariffs.
Board Updates
I was delighted to welcome two new Board members during 2025 whilst also
confirming the appointment of our next Chair. Along with my own appointment as
CEO in 2024, this represents a significant evolution of our Board over the
last 18 months.
Chris McLeish joined the Board in October 2025 as Chief Financial Officer,
having performed the same role at Ibstock PLC since 2019. Chris brings a broad
skill set and has the experience to help deliver the next stage of the Hill
& Smith growth strategy.
Gillian Tomlinson joined as a Non-executive Director in March 2025. Gillian is
Chief Data & Digital Officer at FTSE100 engineering company Weir Group
PLC, where she is responsible for digital strategy and implementation. Gillian
brings a highly complementary skillset to the Board and will provide important
insight and expertise. Leigh-Ann Russell stepped down from the Board in March
2025 and on behalf of the Board I would like to thank Leigh-Ann for her
contribution during her time with the Group.
We announced on 19 November 2025 the appointment of Nick Anderson as a
Non-executive Director with effect from 11 March 2026. Nick was the Group
Chief Executive of FTSE100 industrial engineering company Spirax Group plc
between 2014 and 2024, during which time the business experienced a period of
substantial growth; he has had leadership experience spanning Latin America,
Asia, and Europe. Nick is currently a non-executive director of BAE Systems
PLC and Weir Group PLC.
As previously announced, having served as a member of the Board since 2017 and
Chair since 2019, Alan Giddins will retire from the Board on the date of the
next AGM in May 2026, at which time Nick will assume the roles of Chair of the
Board and Nomination Committee. I am very much looking forward to working with
Nick, and I would like to thank Alan for the invaluable contribution he has
made to Hill & Smith, first as a Non-executive Director and then as Chair.
Dividend
Given the strong trading performance and confidence in the Group's prospects,
the Board is recommending a final dividend of 35.0p per share, making a total
dividend for the year of 53.0p per share (2024: 49.0p), an increase of 8%.
The final dividend, if approved, will be paid on 3 July 2026 to shareholders
on the register on 29 May 2026.
Outlook
The Group is well positioned to deliver further value creation for
shareholders, with exposure to a range of infrastructure and built environment
end markets with attractive and sustained growth drivers.
We expect the strong trading momentum in the US to continue in 2026. We remain
cautious about the degree of recovery in UK market conditions and anticipate
lower levels of project activity during 2026. In light of this, we are
assessing a range of measures to strengthen our UK operations overall, making
our businesses more resilient in the current environment, and better able to
capitalise upon opportunities as markets recover. We continue to see
attractive growth opportunities in our Indian business. We anticipate a
slightly increased second half weighting in Group performance in 2026 compared
with 2025.
We note the emerging situation in the Middle East. Whilst the Group has no
operating footprint in the region, we continue to monitor any potential
impacts from broader risks to trade and cost inflation.
Overall, we are confident of making further good progress in FY26 and beyond.
Operational Review
US Engineered Solutions (48% of Group revenue; 49% of Group underlying
operating profit)
£m Reported Constant currency % OCC
% %
2025 2024
Revenue 416.6 390.3 +7 +10 +6
Underlying operating profit ((1)) 75.0 69.4 +8 +12 +8
Underlying operating margin % ((1)) 18.0% 17.8%
Statutory operating profit 49.0 49.5
((1) ) Underlying measures are set out in note 3 to the Financial
Statements and exclude certain non-underlying items, which are detailed in
note 4 to the Financial Statements.
Our US Engineered Solutions businesses provide a range of composite and steel
solutions for infrastructure construction including energy transmission &
distribution, data centres, waterfront protection, transportation, and other
industrial facilities. The division also supplies engineered supports for the
water, power and liquid natural gas markets, seismic protection solutions for
commercial construction, road work zone safety products and off-grid solar
lighting and power solutions.
The division delivered a strong performance in 2025, with 10% revenue and 12%
profit growth on a constant currency basis, reflecting continued demand growth
across our larger platform businesses and a positive contribution from prior
year acquisitions. Underlying operating margins increased by 20bps to 18.0%
(2024: 17.8%) reflecting ongoing investment in our platform businesses and
reduced margins in National Signal, our US off-grid solar business.
Our composites business continued to see strong demand for its products and
services across a range of infrastructure end markets including electrical
grid infrastructure, industrial facilities, waterfront protection, and data
centre construction. The business delivered a strong performance, with
revenue, operating profit and operating margin all ahead of the prior year.
Demand for composite utility poles was particularly strong during the latter
part of the year, benefiting from the timing of customers' transmission &
distribution investment programmes.
Our electrical transmission & distribution business, which supplies
substation products and components for grid infrastructure connectivity,
continued to benefit from a very positive demand backdrop, and delivered
growth in both revenue and operating profit in the year. Capital Steel and
Whitlow, which we acquired in January and September 2024 respectively, have
both been successfully integrated into the business and are trading well. We
continue to see the transmission & distribution market as very attractive,
with growth driven by the need to upgrade aging infrastructure, supported by
both federal and state investment, and increasing demands on the electric grid
resulting from infrastructure developments.
Our engineered supports business delivered further growth against a record
prior year comparator, driven by robust demand from industrial and
infrastructure projects including energy, clean water, data centres, and
semiconductor plant construction. This more than offset some softness in
commercial construction markets, with the business delivering strong operating
profit margin growth. FM Stainless, which we acquired in March 2024, continues
to perform ahead of our expectations at the time of the acquisition. The
expansion of our main site in Waggaman, Louisiana, is now complete, with the
factory providing efficient incremental manufacturing capacity. The order book
for 2026 remains healthy, with the business expected to benefit from its
exposure to a diverse range of end markets.
Given the ongoing soft demand backdrop in National Signal, our US off-grid
solar business, and the potential operational synergies with the message board
division of Hill & Smith Inc., our US road products business, in the
second half of 2025 we took the decision to integrate the two, to create a
broader unified product platform with a single manufacturing base in La
Mirada, California. The combined business is operating as National Signal but
is managed by our new Hill & Smith Inc. management team. The resulting
closure of our message board manufacturing facility in Garland, Texas, and
integration into La Mirada has gone well, and whilst we expect 2026 to be a
transition year, we anticipate the combined business will deliver an improved
margin performance over time from its wider customer base and integrated
manufacturing platform. The Group recognised non-underlying restructuring
costs of £4.8m relating to the closure of the manufacturing facility in
Garland, and goodwill and other intangible asset impairments totalling £13.6m
relating to National Signal, reflecting a more cautious view of the likely
pace of recovery.
Hill & Smith Inc.'s core road barrier and attenuator business performed
well with revenue and profit ahead of the prior year. Whilst revenue in the
first half was below the comparative period, actions taken by the new
management team resulted in a stronger second half, especially in crash
attenuators. Given this improving picture, the outlook for the business is
encouraging, with demand supported by state and federal investment to upgrade
road infrastructure and the phased implementation of developments in safety
standards.
Overall, prospects for future growth in our US Engineered Solutions businesses
remain strong. Looking ahead, we expect market growth to be supported by
investment to modernise the ageing electric grid and multi-year state and
federal funding to upgrade infrastructure, alongside private investment from
US manufacturers and producers to onshore vital components and deliver
additional data centre capacity.
Galvanizing Services (24% of Group revenue; 37% of Group underlying operating
profit)
£m Reported Constant currency % OCC
% %
2025 2024
Revenue 212.8 197.8 +8 +10 +10
Underlying operating profit ((1)) 55.4 50.3 +10 +13 +13
Underlying operating margin % ((1)) 26.0% 25.4%
Statutory operating profit 54.3 49.2
((1) ) Underlying measures are set out in note 3 to the Financial
Statements and exclude certain non-underlying items, which are detailed in
note 4 to the Financial Statements.
The Galvanizing Services division offers hot-dip galvanizing and powder
coating services with multi-plant facilities in the US and the UK. Hot-dip
galvanizing is a proven steel corrosion protection solution which
significantly extends the service life of steel structures and products.
The division benefits from a wide sectoral spread of customers who operate in
a range of infrastructure and built environment end markets including
industrial and commercial construction, transport products and infrastructure,
and transmission & distribution.
The division delivered a strong performance in the year, with 10% revenue
growth and 13% underlying operating profit growth on an OCC basis. The
operating margin increased by 60bps to 26.0%, with an increase in both the US
and UK regions. Both the US and UK businesses are benefiting from leadership
changes, with recently appointed MDs overseeing improvements in both
operational efficiency and commercial execution.
US
Our US galvanizing business delivered a record performance, with strong growth
in both revenue and operating profit driven by a 13% increase in volumes, with
robust demand from a balanced mix of end markets.
Following a slower start caused by adverse weather conditions, growth
increased across the year and particularly in the final quarter, reflecting
higher infrastructure-related investments in several end markets, including
construction, electrical transmission & distribution and technology. The
business saw good margin expansion in the year, and continues to deliver
superior operating margins, with customers valuing the excellent service,
product quality and additional services provided by our dedicated local teams.
As we look forward, the outlook for US galvanizing remains positive. The
business is well placed to benefit from federal, state and private investment
to support industrial expansion, infrastructure investment and technology
change, as well as the ongoing shift towards onshoring of manufacturing.
UK
In the UK revenue was 5% ahead of the prior year, with a 9% increase in
volumes and marginally lower average pricing reflecting end-market mix. Volume
growth was ahead of the wider UK market and reflects the benefits of recent
developments in the business including an enhanced customer focus and
improvements in productivity.
Underlying operating margin increased modestly compared to the prior year,
reflecting the impact of higher volumes and a continuing focus on operational
efficiency. Whilst we expect the broader macroeconomic backdrop in the UK to
remain challenging in 2026, given the actions taken to improve the quality of
the business, the outlook for the year ahead remains positive.
UK & India Engineered Solutions (28% of Group revenue; 14% of Group
underlying operating profit)
£m Reported Constant currency % OCC
% %
2025 2024
Revenue 239.4 267.0 -10 -10 -6
Underlying operating profit ((1)) 20.9 23.8 -12 -11 -17
Underlying operating margin % ((1)) 8.7% 8.9%
Statutory operating profit 16.8 16.7
((1) ) Underlying measures are set out in note 3 to the Financial
Statements and exclude certain non-underlying items, which are detailed in
note 4 to the Financial Statements.
Our UK Engineered Solutions businesses supply products and services to a range
of end markets including transport infrastructure, residential construction,
data centres, and other industrial and commercial construction. The division
also supplies hostile vehicle mitigation (HVM) and off-grid solar lighting
solutions. Our business in India manufactures engineered supports primarily
for energy markets.
Revenue for the year was 10% lower on a constant currency basis and 6% lower
on an OCC basis, reflecting softer demand across UK road and rail, residential
construction and general infrastructure markets. The UK business experienced
progressive decline in market demand as the year progressed. Underlying
operating profit was 11% lower on a constant currency basis and 17% lower on
an OCC basis, reflecting a 20bps reduction in operating margins. The UK
business benefited from project activity in transport infrastructure markets
which is not expected to repeat in 2026. Considering the challenging market
backdrop, we are assessing a range of measures to strengthen our UK
operations overall, making our businesses more resilient in the current
environment, and better able to capitalise upon opportunities as markets
recover.
As expected, both revenue and underlying operating profit in our UK roads
operations were below the prior year. Visibility and delivery of major road
schemes remain limited, driven by delays to the release of the UK Government's
Road Investment Strategy 3 (RIS3) which is expected during the 2026 year. This
led to a lower outturn in our temporary rental and permanent barrier
businesses. The project outlook for 2026 remains uncertain and we have taken
steps to adjust the cost base accordingly, whilst remaining well placed to
benefit when activity improves. Performance across the wider UK roads market
was also impacted by local authority budgetary challenges leading to subdued
activity. While the immediate prospects remain more muted, RIS3 is expected to
provide clarity over the scale and timing of future infrastructure spending
although this is expected to have limited impact on activity levels in 2026.
The industrial flooring business benefitted from good demand from data centre
fabrication projects and the acquisition of Hentech will support further
growth in this market. Demand from broader industrial and commercial markets
was more subdued, with customers displaying higher levels of caution given the
broader uncertain economic backdrop.
Our building products business experienced a continuation of lower demand
levels, although a strong focus on productivity and cost management acted to
mitigate the impact on profitability. We remain cautious around the scale and
timing of recovery in UK residential construction markets.
Revenue and profitability across our perimeter security businesses were ahead
of the prior year, with improving mix driving meaningful growth in operating
margins. Performance reflects good growth in our high security fencing
business, particularly in data centre construction, where the order book and
opportunity pipeline are strong and present significant short to medium term
prospects.
Our UK off-grid solar energy business delivered revenue and profit growth
following a difficult period of trading in 2024, with improved activity in
transport, commercial construction, water infrastructure, technology and
defence end markets. The business continues to focus on product innovation,
and has seen a growing order book, which is encouraging for further progress
in the year ahead.
Our Indian engineered supports business delivered operating profit in line
with the prior year, with performance, as expected, improving throughout the
year. Revenue was marginally lower than the prior year, reflecting the timing
of major projects. However, wider market activity levels remain healthy, and
the business has a robust pipeline of future business, underpinned by
international LNG projects.
Financial Review
Results
The Group has delivered a good set of 2025 results. Revenue was £868.8m
(2024: £855.1m), up 2% on a reported basis. Revenue was up 3% on an OCC basis
with strong organic growth in our higher margin US Engineered Solutions and
Galvanizing Services businesses partially offset by declines in the UK,
reflecting a more challenging market backdrop.
Underlying operating profit was £151.3m (2024: £143.5m), an increase of 5%
on a reported basis. OCC growth was 6% and constant currency growth was 8%.
Operating margins improved to 17.4% (2024: 16.8%) reflecting the benefits of
operating leverage and volume growth in our higher margin US businesses.
Underlying profit before taxation was £142.5m (2024: £132.6m). Statutory
operating profit was £120.1m (2024: £115.4m) and statutory profit before tax
was £111.3m (2024: £104.5m). Underlying earnings per share increased to
132.2p (2024: 122.6p) and statutory earnings per share was 102.7p (2024:
95.0p).
The principal reconciling items between underlying and statutory operating
profit are: restructuring costs of £4.8m arising from the closure of our
message board manufacturing facility in Garland, Texas; the £13.6m write down
of goodwill and intangible assets relating to our US off-grid solar business,
National Signal; and the amortisation of other acquisition intangibles of
£10.8m. Note 4 to the financial statements provides further details on the
Group's non-underlying items.
Cash generation
The Group continues to be highly cash generative, delivering 91% underlying
cash conversion in 2025. We expect the Group to continue to deliver good cash
conversion in 2026, in line with our financial framework. The calculation of
our underlying cash conversion ratio can be found in note 3 to the financial
statements.
Operating cash flow before movement in working capital was £179.6m (2024:
£175.2m). The working capital outflow in the year was £3.1m (2024: £0.6m
inflow) with a continued focus on working capital efficiency. Working capital
as a percentage of annualised sales was 15.5% (2024: 15.2%) and closing debtor
days were 59 days (2024: 62 days).
Capital expenditure of £34.2m (2024: £28.6m) represents a multiple of
depreciation and amortisation of 1.6 times (2024: 1.3 times). During the year
we made capital investments of around £10m to support organic growth,
including completion of the expansion and upgrade of our engineered supports
facility in Louisiana, and initial spend on expansion within our existing US
galvanizing facility network. Excluding the Freeberg and Hentech
acquisitions, we anticipate capital expenditure of around £50m in the 2026
year including major organic growth capital of £25m to expand capacity in our
higher growth and returning US platform businesses.
Net financing costs were £8.8m (2024: £10.9m), including £0.6m (2024:
£0.5m) amortisation of costs relating to refinancing activities.
The Group generated £106.9m of free cash flow in the year (2024: £108.6m),
providing funds to support our capital allocation policy.
Net debt and financing
Net debt at the end of the year amounted to £50.8m (31 December 2024:
£96.9m). Outflows in the year included £39.4m for the 2024 interim and final
dividends and £20.2m returned to shareholders via the buyback programme
initiated in August. Net debt at the year-end includes lease liabilities under
IFRS 16 of £39.9m (31 December 2024: £49.0m), the reduction being primarily
due to exiting the Group's manufacturing site in Garland, Texas. Net debt
excluding lease liabilities was £10.9m (2024: £47.9m).
The Group's principal financing facilities comprise a £300m revolving credit
facility, which was increased and extended during the year and now expires in
November 2029 with an option for a further one-year extension, and $70m senior
unsecured notes with maturities in June 2026 and June 2029, together with a
further £6.2m of on-demand local overdraft arrangements. Throughout the year
the Group has operated well within these facilities and at 31 December 2025,
had £346.5m of headroom (£340.3m committed, £6.2m on demand). Approximately
63% of the Group's drawn debt at 31 December 2025 is subject to fixed interest
rates, providing a hedge against interest rate risk.
The principal borrowing facilities are subject to covenants that are measured
biannually in June and December, being net debt to EBITDA of a maximum of 3.0
times and interest cover of a minimum of 4.0 times. The ratio of covenant net
debt to EBITDA at 31 December 2025 was 0.1 times (31 December 2024: 0.3 times)
and interest cover was 28.4 times (31 December 2024: 20.4 times).
Return on invested capital
The Group continued to deliver strong returns in 2025, achieving a return on
invested capital of 26.7% (2024: 24.8%), the increase reflecting the faster
growth in our larger, higher margin US businesses which are typically lower in
capital intensity, and continued discipline around capital expenditure and
working capital.
Tax
The underlying effective tax rate for the year was 25.5% (2024: 25.6%). The
statutory tax charge for the year was £28.8m (2024: £28.1m) and includes a
£7.5m credit (2024: £5.9m credit) in respect of non-underlying items,
principally relating to impairment charges and the amortisation of acquisition
intangibles. Cash tax paid in the year was £27.3m (2024: £26.5m).
Exchange rates
The Group is exposed to movements in exchange rates when translating the
results of its overseas operations into sterling. Retranslating 2024 revenue
and underlying operating profit using average exchange rates for 2025 would
have reduced revenue by £16.8m and underlying operating profit by £4.0m,
mainly due to sterling's appreciation against the US dollar. A one cent
movement in the average US dollar rate currently results in an adjustment of
approximately £4.0m to the Group's annual revenue and £1.0m to annual
underlying operating profit.
Given the increasing proportion of the Group's revenues and operating profits
denominated in US dollars, with effect from the 2026 year we intend to report
our results in US dollars. Our transition to US dollar reporting will
eliminate much of this exchange rate volatility.
Non-underlying items
The total non-underlying items charged to operating profit in the Consolidated
Income Statement amounted to £31.2m (2024: £28.1m) and included the
following:
· Impairment charges of £13.6m in respect of goodwill, acquisition and
other intangible assets of National Signal, the Group's US off-grid solar
business
· Costs of £4.8m relating to the closure of the Group's message board
manufacturing facility in Garland, Texas, and subsequent relocation of
operations to our facility in La Mirada, California
· Amortisation of acquisition intangible assets of £10.8m
· Expenses related to acquisitions and disposals of £3.1m
The non-cash element of these charges was £27.4m. Further details are set out
in note 4 to the Financial Statements.
Pensions
The Group operates defined benefit pension plans in the UK and the USA. The
IAS 19 surplus of these plans at 31 December 2025 was £4.6m, an improvement
of £5.4m from 31 December 2024 (£0.8m deficit). The surplus on the UK
scheme, the largest employee benefit obligation in the Group, was £5.2m (31
December 2024: £0.2m deficit), the improvement mainly due to the Group's
deficit recovery payments in the year, which we expect to end in Q1 2026.
The Group continues to be actively engaged in dialogue with the UK schemes'
Trustees with regards to management, funding and investment strategies.
Going concern
After making enquiries, the Directors have reasonable expectations that the
Company and its subsidiaries have adequate resources to continue in
operational existence for the foreseeable future and for the period to 30 June
2027. Accordingly, they continue to adopt the going concern principle.
When making this assessment, the Group considers whether it will be able to
maintain adequate liquidity headroom above the level of its borrowing
facilities and to operate within the financial covenants on those facilities.
The Group has carefully modelled its cash flow outlook for the period to June
2027, considering the ongoing uncertainties in global economic conditions. In
this "base case" scenario, the forecasts indicate significant liquidity
headroom will be maintained above the Group's borrowing facilities and
financial covenants will be met throughout the period, including the covenant
tests at 30 June 2026, 31 December 2026 and 30 June 2027.
The Group has also carried out "reverse stress tests" to assess the
performance levels at which either liquidity headroom would fall below zero or
covenants would be breached in the period to 30 June 2027. The Directors do
not consider the resulting performance levels to be plausible given the
Group's strong trading performance in the period and the resilience of the end
markets in which we operate.
Rutger
Helbing
Chris McLeish
Chief Executive Officer
Chief Financial Officer
Consolidated Income Statement
2025 2024
Notes Underlying Non- Total Underlying Non- Total
£m
underlying*
£m
£m
underlying*
£m
£m
£m
Revenue 2 868.8 - 868.8 855.1 - 855.1
Cost of sales (515.3) - (515.3) (513.3) - (513.3)
Gross profit 353.5 - 353.5 341.8 - 341.8
Distribution costs (26.4) - (26.4) (26.8) - (26.8)
Administrative expenses (176.1) (31.2) (207.3) (172.0) (28.1) (200.1)
Other operating income 0.3 - 0.3 0.5 - 0.5
Operating profit 2,3 151.3 (31.2) 120.1 143.5 (28.1) 115.4
Financial income 5 0.8 - 0.8 0.5 - 0.5
Financial expenses 5 (9.6) - (9.6) (11.4) - (11.4)
Profit before taxation 142.5 (31.2) 111.3 132.6 (28.1) 104.5
Taxation 6 (36.3) 7.5 (28.8) (34.0) 5.9 (28.1)
Profit for the year attributable to the owners of the parent 106.2 (23.7) 82.5 98.6 (22.2) 76.4
Basic earnings per share 7 102.7p 95.0p
Diluted earnings per share 7 101.6p 93.9p
* The Group's definition of non-underlying items is included in note 1 and
further details on non-underlying items are included in note 4.
Consolidated Statement of Comprehensive Income
Notes 2025 2024
£m £m
Profit for the year 82.5 76.4
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of overseas operations (30.4) 5.6
Exchange differences on foreign currency borrowings designated as net 4.1 (0.6)
investment hedges
Items that will not be reclassified subsequently to profit or loss
Actuarial gain/(loss) on defined benefit pension schemes 1.7 (0.2)
Taxation on items that will not be reclassified to profit or loss 6 (0.5) -
Other comprehensive (loss)/income for the year (25.1) 4.8
Total comprehensive income for the year attributable to owners of the parent 57.4 81.2
Consolidated Statement of Financial Position
Notes 2025 2024
£m
£m
Non-current assets
Intangible assets 202.5 236.0
Property, plant & equipment 185.4 185.1
Right-of-use assets 36.8 43.2
Retirement benefit surplus 5.2 -
Deferred tax assets 6 0.1 0.1
430.0 464.4
Current assets
Assets held for sale - 12.7
Inventories 97.2 100.1
Trade and other receivables 161.9 162.5
Current tax assets 2.4 1.3
Cash and cash equivalents 9 70.4 55.0
331.9 331.6
Total assets 761.9 796.0
Current liabilities
Liabilities held for sale - (6.9)
Trade and other liabilities (129.6) (133.5)
Current tax liabilities (2.8) (0.7)
Provisions (11.6) (7.1)
Lease liabilities (8.6) (9.1)
Loans and borrowings 9 (26.4) (0.8)
(179.0) (158.1)
Net current assets 152.9 173.5
Non-current liabilities
Other liabilities (7.0) (11.2)
Provisions (2.3) (2.3)
Deferred tax liabilities (11.8) (12.3)
Retirement benefit obligations (0.6) (0.8)
Lease liabilities (31.3) (36.9)
Loans and borrowings 9 (54.9) (98.7)
(107.9) (162.2)
Total liabilities (286.9) (320.3)
Net assets 475.0 475.7
Equity
Share capital 19.9 20.1
Share premium 49.0 47.0
Other reserves 5.1 4.9
Translation reserve 1.6 27.9
Retained earnings 399.4 375.8
Total equity 475.0 475.7
Consolidated Statement of Changes in Equity
Notes Share Share Other Translation Reserve Retained Earnings Total
Capital Premium Reserves £m £m Equity
£m £m £m £m
At 1 January 2024 20.0 44.6 4.9 22.9 332.1 424.5
Comprehensive income -
Profit for the year - - - - 76.4 76.4
Other comprehensive income for the year - - - 5.0 (0.2) 4.8
Transactions with owners recognised directly in equity
Dividends 8 - - - - (34.5) (34.5)
Credit to equity of share-based payments - - - - 3.4 3.4
Own shares held by employee benefit trust - - - - 1.6 1.6
Satisfaction of long-term incentive and deferred bonus awards - - - - (2.8) (2.8)
Tax taken directly to the Consolidated Statement of Changes in Equity 6 - - - - (0.2) (0.2)
Shares issued 0.1 2.4 - - - 2.5
At 31 December 2024 20.1 47.0 4.9 27.9 375.8 475.7
Comprehensive income
Profit for the year - - - - 82.5 82.5
Other comprehensive loss for the year - - - (26.3) 1.2 (25.1)
Transactions with owners recognised directly in equity
Dividends 8 - - - - (39.4) (39.4)
Credit to equity of share-based payments - - - - 2.9 2.9
Own shares held by employee benefit trust - - - - 0.3 0.3
Satisfaction of long-term incentive and deferred bonus awards - - - - (4.8) (4.8)
Tax taken directly to the Consolidated Statement of Changes in Equity 6 - - - - 1.1 1.1
Shares issued - 2.0 - - - 2.0
Repurchase of shares (0.2) - 0.2 - (20.2) (20.2)
At 31 December 2025 19.9 49.0 5.1 1.6 399.4 475.0
Consolidated Statement of Cash Flows
Notes 2025 2024
£m
£m
Profit before tax 111.3 104.5
Add back net financing costs 5 8.8 10.9
Operating profit 2,3 120.1 115.4
Adjusted for non-cash items:
Share-based payments 2.9 3.4
Loss on disposal of subsidiaries 0.4 -
Gain on disposal of non-current assets (0.4) (0.4)
Loss on disposal of assets held for sale - 0.2
Depreciation of owned assets 20.5 20.8
Amortisation of intangible assets 12.1 11.1
Right-of-use asset depreciation 10.1 10.4
Gain on lease termination - (0.6)
Gain on lease modification (0.6) -
Release of accrued contingent consideration - (1.7)
Research & development expenditure credit (0.2) (0.5)
Impairment of non-current assets 14.7 14.0
Loss on remeasurement of assets held for sale - 3.1
Operating cash flow before movement in working capital 9 179.6 175.2
(Increase)/decrease in inventories (2.3) 9.3
Increase in receivables (2.4) (11.8)
Increase in payables 1.6 3.1
Increase in insurance reimbursement asset (3.6) (3.8)
Increase/(decrease) in provisions and employee benefits 0.2 (3.4)
Net movement in working capital (6.5) (6.6)
Cash generated by operations 9 173.1 168.6
Purchase of assets for rental to customers (1.3) (2.3)
Income taxes paid (27.3) (26.5)
Interest paid (6.6) (8.8)
Interest paid on lease liabilities (2.0) (2.0)
Net cash from operating activities 135.9 129.0
Interest received 0.8 0.5
Proceeds on disposal of non-current assets 1.1 1.1
Proceeds on disposal of assets held for sale - 2.3
Purchase of property, plant and equipment (29.2) (21.3)
Purchase of intangible assets (3.7) (5.0)
Acquisitions of subsidiaries - (44.5)
Deferred consideration in respect of prior year acquisitions (3.1) (2.1)
Disposals of subsidiaries 7.4 -
Net cash used in investing activities (26.7) (69.0)
Issue of new shares 0.8 2.5
Repurchase of shares (20.2) -
Purchase of shares for employee benefit trust (4.5) (1.2)
Dividends paid 8 (39.4) (34.5)
Costs associated with refinancing during the year (1.3) -
Repayment of lease liabilities (9.5) (9.0)
Cash paid on early termination of lease contract - (0.1)
New loans and borrowings 9 42.0 62.5
Repayments of loans and borrowings 9 (55.4) (63.7)
Net cash used in financing activities (87.5) (43.5)
Net increase in cash and cash equivalents net of bank overdraft 21.7 16.5
Cash and cash equivalents net of bank overdraft at the beginning of the year 51.3 34.4
Effect of exchange rate fluctuations (3.3) 0.4
Cash and cash equivalents net of bank overdraft at the end of the year 9 69.7 51.3
1. Group Accounting Policies
Hill & Smith PLC is a company incorporated in the UK.
Basis of preparation
The consolidated financial statements comprise the financial statements of the
Company, Hill & Smith PLC, and its subsidiaries as at 31 December 2025.
Subsidiaries are entities controlled by the Group. The Group controls an
entity when it is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns
through its power over the entity. The acquisition date is the date on which
control is transferred to the acquirer. The financial statements of
subsidiaries are included in the Group Financial Statements from the date that
control commences until the date that control ceases.
In preparing the consolidated financial statements, management has considered
the impact of climate change. This included an assessment of assets with
indefinite and long lives and how they could be impacted by measures taken to
address global warming. Physical climate change presents a relatively low risk
to the Group's future business operations and transition risks are also
expected to have a relatively low impact when considered together with the
mitigating actions that the Group intends to take. As such, no issues were
identified that would impact the carrying values of such assets or have any
other impact on the financial statements.
Measurement convention
The Group Financial Statements are prepared on the historical cost basis
except where the measurement of balances at fair value is required as
explained below. The Group Financial Statements are presented in Sterling and
all values are stated in million (£m) rounded to one decimal place, except
where otherwise indicated.
Going concern and liquidity risk
In determining the appropriate basis of preparation of its financial
statements, the Directors are required to assess whether the Group can
continue in operational existence for the foreseeable future, at least 12
months from the date of approval of these financial statements. The Group's
going concern assessment period is the 18-month period from the balance sheet
date to 30 June 2027 (referred to throughout as 'the going concern period'.
When making this assessment, the Group considers whether it will be able to
maintain adequate liquidity headroom above the level of its borrowing
facilities and to operate within the financial covenants on those facilities.
At 31 December 2025, the Group had £353.5m of committed borrowing facilities,
and a further £6.2m of on-demand facilities. The Group refinanced its
revolving credit facility in November 2025, entering into an 'Amend and
Extend' addendum to the original agreement signed in November 2022. The
amendments include increasing the total facility to £300m and extending the
term for another two years to November 2029. The Group also holds $70m of
Senior Unsecured Notes, one tranche ($35m) of which is due to expire in June
2026 and the second tranche ($35m) is due to expire in June 2029; and other
local committed borrowing facilities of £1.7m. The amount drawn down under
these committed facilities at 31 December 2025 was £82.9m, which together
with cash and cash equivalents of £69.7m gave total headroom of £346.5m
(£340.3m committed, £6.2m on demand). The Group has not made any changes to
its principal borrowing facilities between 31 December 2025 and the date of
approval of these financial statements.
The principal borrowing facilities are subject to covenants that are measured
biannually in June and December, being net debt to EBITDA of a maximum of 3.0x
and interest cover of a minimum of 4.0x, based on measures as defined in the
facilities agreements which are adjusted from the equivalent IFRS amounts. The
ratio of net debt to EBITDA at 31 December 2025 was 0.1 times and interest
cover was 28.4 times.
The Group has carefully modelled its cash flow outlook for the period to 30
June 2027, taking account of the current global economic conditions. In this
'base case' scenario, the forecasts indicate significant liquidity headroom
will be maintained above the Group's borrowing facilities and financial
covenants will be met throughout the period, including the covenant tests at
30 June 2026, 31 December 2026 and 30 June 2027.
The Group has carried out stress tests against the base case to determine the
performance levels that would result in a breach of covenants or a reduction
of headroom against its borrowing facilities to nil. For a breach of covenants
to occur during the relevant period, the Group would need to experience a
sustained revenue reduction of 29% compared with current expectations
throughout the 18-month period ending 30 June 2027. A reduction in headroom
against borrowing facilities to nil would occur if the Group experienced a
sustained revenue reduction of 28% compared with current expectations for the
18-month period ending 30 June 2027, noting that the stress test assumes
repayment of $35m of Senior Unsecured Notes on expiry of the agreement in June
2026. The Directors do not consider any of these scenarios to be plausible
given the generally positive outlook across the infrastructure markets in
which the Group operates. The Directors also noted the Group's ability to
continue its operations throughout the COVID-19 pandemic, noting that revenues
fell by only 22% in the second quarter of 2020, the worst-affected period.
Furthermore, the Group has several mitigating actions under its control
including minimising capital expenditure to critical requirements, reducing
levels of discretionary spend, rationalising its overhead base and curtailing
future dividend payments which, although not forecast to be required, could be
implemented in order to be able to meet the covenant tests and to continue to
operate within borrowing facility limits.
After making these assessments, the Directors have reasonable expectation that
the Company and its subsidiaries have adequate resources to continue in
operational existence during the going concern period. Accordingly, they
continue to adopt the going concern basis in preparing the Annual Report and
Financial Statements.
New IFRS standards and interpretations adopted during 2025
The following amendments and interpretations apply for the first time in 2025,
and therefore were adopted by the Group:
• Amendments to IAS 21 - Lack of exchangeability
The amendment noted above has not had a material impact on the financial
statements.
The principal exchange rates used were as follows:
2025 2024
Average
Average Closing Closing
Sterling to US Dollar (£1 = USD) 1.32 1.35 1.28 1.25
Sterling to Indian Rupee (£1 = INR) 114.93 120.85 106.95 107.22
Non-underlying items
Non-underlying items are presented separately in the Consolidated Income
Statement where, in the Directors' judgement, the quantum, nature or
volatility of such items gives further information to obtain a fuller
understanding of the underlying performance of the business. The following are
included by the Group in its assessment of non-underlying items:
• Gains or losses arising on disposal, closure, restructuring or
reorganisation of businesses that do not meet the definition of discontinued
operations
• Amortisation of intangible fixed assets arising on acquisitions, which
can vary depending on the nature, size and frequency of acquisitions in each
financial period
• Expenses associated with acquisitions and disposals, comprising
professional fees incurred, any consideration which, under IFRS 3 (Revised) is
required to be treated as a post-acquisition employment expense, and changes
in contingent consideration payable on acquisitions
• Impairment charges in respect of tangible or intangible fixed assets, or
right-of-use assets
• Changes in the fair value of derivative financial instruments
• Significant past service items or curtailments and settlements relating
to defined benefit pension obligations resulting from material changes in the
terms of the schemes.
The non-underlying tax charge or credit comprises the tax effect of the above
non-underlying items.
Details in respect of the non-underlying items recognised in the current and
prior year are set out in note 4 to the Financial Statements.
2. Segmental information
Business segment analysis
The Group previously reported three operating segments: Engineered Solutions,
Galvanizing Services and Roads & Security. During the year ended 31
December 2025, the Group has reassessed its reportable segments under IFRS 8
Operating Segments and has determined that these are now US Engineered
Solutions, UK & India Engineered Solutions, and Galvanizing Services. The
Board concluded these changes better reflect the way the Group is now managed,
enabling closer focus on geographic end markets and growth opportunities. The
Group's internal management structure and financial reporting systems
differentiate between these segments, and, in reporting, management have taken
the view that they comprise a reporting segment on the basis of the following
characteristics:
• The US Engineered Solutions segment comprises all US operating companies
excluding Galvanizing Services;
• The UK & India Engineered Solutions segment comprises all UK
operating companies and India, excluding Galvanizing Services; and
• The Galvanizing Services segment contains a group of companies supplying
galvanizing and related materials coating services.
Corporate costs are allocated to reportable segments in proportion to the
revenue of each of those segments.
The revised segmental structure was effective from 1 January 2025. As required
by IFRS 8, comparative segment information for the US Engineered Solutions and
the UK & India Engineered Solutions segments for the year ended 31
December 2024 has been restated, as indicated by "restated" throughout these
Consolidated Financial Statements. The restatement does not result in any
change to the results of the Galvanizing Services segment or the consolidated
Group.
2025 2024 (restated)
Revenue Reported Underlying Revenue Reported Underlying
£m
Operating
operating
£m
Operating
operating
Profit
profit
Profit
profit
£m
£m*
£m
£m*
US Engineered Solutions 416.6 49.0 75.0 390.3 49.5 69.4
UK & India Engineered Solutions 239.4 16.8 20.9 267.0 16.7 23.8
Galvanizing Services 212.8 54.3 55.4 197.8 49.2 50.3
Group 868.8 120.1 151.3 855.1 115.4 143.5
Net financing costs (8.8) (8.8) (10.9) (10.9)
Profit before taxation 111.3 142.5 104.5 132.6
Taxation (28.8) (36.3) (28.1) (34.0)
Profit after taxation 82.5 106.2 76.4 98.6
* Underlying operating profit is stated before non-underlying items as
defined in note 1 and is the measure of segment profit used by the Chief
Operating Decision Maker, who is the Chief Executive. The reported operating
profit columns are included as additional information.
Transactions between operating segments are on an arm's length basis similar
to transactions with third parties. Galvanizing Services sold £1.0m (2024
(restated): £0.9m) of products and services to US Engineered Solutions and
£6.8m (2024 (restated): £7.4m) of products and services to UK & India
Engineered Solutions. UK & India Engineered Solutions sold £0.2m (2024
(restated): £0.2m) of products and services to US Engineered Solutions. These
internal revenues, along with revenues generated from within their own
segments, have been eliminated on consolidation.
In the following tables, revenue from contracts with customers is
disaggregated by primary geographical market, major product/service lines and
timing of revenue recognition. Revenue by primary geographical market is
defined as the end location of the Group's product or service. The table also
includes a reconciliation of the disaggregated revenue with the Group's
reportable segments.
US Engineered Solutions UK & India Engineered Solutions Galvanizing Services Total
Primary Geographical Markets 2025 2024 (restated) 2025 2024 (restated) 2025 2024 2025 2024
£m £m £m £m £m £m £m £m
UK 0.1 - 188.8 221.2 85.2 80.9 274.1 302.1
Rest of Europe 0.2 0.2 27.0 22.7 - - 27.2 22.9
North America 414.5 388.2 1.7 2.7 127.6 116.9 543.8 507.8
The Middle East 1.5 1.3 7.9 9.9 - - 9.4 11.2
Rest of Asia - 0.1 11.9 6.6 - - 11.9 6.7
Rest of the world 0.3 0.5 2.1 3.9 - - 2.4 4.4
416.6 390.3 239.4 267.0 212.8 197.8 868.8 855.1
Major product/service lines
Manufacture, supply and installation of products 411.7 385.3 225.7 248.4 - - 637.4 633.7
Galvanizing Services - - - - 212.8 197.8 212.8 197.8
Rental of assets to customers 4.9 5.0 13.7 18.6 - - 18.6 23.6
416.6 390.3 239.4 267.0 212.8 197.8 868.8 855.1
Timing of revenue recognition
Products and services transferred at a point in time 200.0 210.4 156.1 177.2 212.8 197.8 568.9 585.4
Products and services transferred over time 216.6 179.9 83.3 89.8 - - 299.9 269.7
416.6 390.3 239.4 267.0 212.8 197.8 868.8 855.1
Total assets by geography
2025 2024
£m
£m
UK 251.1 292.8
Rest of Europe 3.9 4.0
North America 483.6 473.9
Asia 20.5 17.4
Rest of the world 2.8 7.9
Total Group 761.9 796.0
3. Alternative Performance Measures
The Group presents Alternative Performance Measures ("APMs") in addition to
its statutory results. These are presented in accordance with the Guidelines
on APMs issued by the European Securities and Markets Authority. The principal
APMs are:
• Underlying profit before taxation
• Underlying operating profit
• Underlying operating margin
• Organic and constant currency measures of change in revenue and
underlying operating profit
• Underlying cash conversion ratio
• Capital expenditure to depreciation and amortisation ratio
• Covenant net debt to EBITDA ratio
• Underlying earnings per share. A reconciliation of statutory earnings
per share to underlying earnings per share is provided in note 7.
All underlying measures exclude certain non-underlying items, which are
detailed in note 4. References to an underlying profit measure are made on
this basis and, in the opinion of the Directors, aid the understanding of the
underlying business performance as they exclude items whose quantum, nature or
volatility gives further information to obtain a fuller understanding of the
underlying performance of the business. APMs are presented on a consistent
basis over time to assist in comparison of performance.
Reconciliation of underlying to reported profit before tax
2025 2024
£m
£m
Underlying profit before tax 142.5 132.6
Non-underlying items included in operating profit (31.2) (28.1)
Reported profit before tax 111.3 104.5
Reconciliation of underlying to reported operating profit by segment
US Engineered Solutions UK & India Engineered Solutions Galvanizing Services Total
2025 2024 2025 2024 2025 2024 2025 2024
£m
(restated)
£m
(restated)
£m
£m
£m
£m
£m
£m
Underlying operating profit 75.0 69.4 20.9 23.8 55.4 50.3 151.3 143.5
Non-underlying items:
Profit on disposal of subsidiaries - - 1.1 - - - 1.1 -
Business reorganisation costs (3.7) - - - - - (3.7) -
Impairment of assets (14.7) (13.2) - - - - (14.7) (13.2)
Loss on remeasurement of assets held for sale - - - (3.1) - - - (3.1)
Amortisation of acquisition intangibles (7.2) (6.2) (2.5) (2.6) (1.1) (1.1) (10.8) (9.9)
Expenses related to acquisitions and disposals (0.4) (0.5) (2.7) (1.4) - - (3.1) (1.9)
Reported operating profit 49.0 49.5 16.8 16.7 54.3 49.2 120.1 115.4
Calculation of underlying operating margin
US Engineered Solutions UK & India Engineered Solutions Galvanizing Services Total
2025 2024 2025 2024 2025 2024 2025 2024
£m (restated) £m (restated) £m £m £m £m
£m £m
Underlying operating profit 75.0 69.4 20.9 23.8 55.4 50.3 151.3 143.5
Revenue 416.6 390.3 239.4 267.0 212.8 197.8 868.8 855.1
Underlying operating profit margin (%) 18.0% 17.8% 8.7% 8.9% 26.0% 25.4% 17.4% 16.8%
Measures of organic and constant currency change in revenue and underlying
operating profit
Organic constant currency measures exclude the impact of currency translation
movements, acquisitions, disposals and closures of subsidiary businesses. In
respect of acquisitions, the amounts referred to represent the amounts for the
period in the current year that the business was not held in the prior year.
In respect of disposals and closures of subsidiary businesses, the amounts
referred to represent the amounts for the period in the prior year that the
business was not held in the current year. Constant currency amounts are
prepared using exchange rates which prevailed in the current year.
US Engineered Solutions UK & India Engineered Solutions Galvanizing Services Total
Revenue Underlying operating profit Revenue Underlying operating profit Revenue Underlying operating profit Revenue Underlying operating profit
£m £m £m £m £m £m £m £m
2024 (restated) 390.3 69.4 267.0 23.8 197.8 50.3 855.1 143.5
Impact of exchange rate movements from 2024 to 2025 (11.8) (2.4) (1.4) (0.3) (3.6) (1.3) (16.8) (4.0)
2024 translated at 2025 exchange rates (A) 378.5 67.0 265.6 23.5 194.2 49.0 838.3 139.5
Acquisitions and disposals 16.2 2.5 (10.1) 1.5 - - 6.1 4.0
Organic growth/(decline) (B) 21.9 5.5 (16.1) (4.1) 18.6 6.4 24.4 7.8
2025 (C) 416.6 75.0 239.4 20.9 212.8 55.4 868.8 151.3
Organic growth % (B divided by A) 6% 8% -6% -17% 10% 13% 3% 6%
Constant currency change % ((C-A) divided by A) 10% 12% -10% -11% 10% 13% 4% 8%
Calculation of underlying cash conversion ratio
2025 2024
£m £m
Underlying operating profit 151.3 143.5
Calculation of adjusted operating cash flow:
Cash generated by operations 173.1 168.6
Purchase of assets for rental to customers (1.3) (2.3)
Purchase of property, plant and equipment (29.2) (21.3)
Purchase of intangible assets (3.7) (5.0)
Repayment of lease liabilities (9.5) (9.0)
Proceeds on disposal of non-current assets and assets held for sale 1.1 3.4
Defined benefit pension scheme deficit payments 3.8 3.7
Add back: Cash flows relating to non-underlying items 3.3 4.0
Adjusted operating cash flow 137.6 142.1
Underlying cash conversion (%) 91% 99%
Calculation of capital expenditure to depreciation and amortisation ratio
2025 2024
£m £m
Calculation of capital expenditure:
Purchase of assets for rental customers 1.3 2.3
Purchase of property, plant and equipment 29.2 21.3
Purchase of intangible assets 3.7 5.0
34.2 28.6
Calculation of depreciation and amortisation:
Depreciation of property, plant and equipment 20.5 20.8
Amortisation of development costs 1.1 1.1
Amortisation of other intangible assets 0.2 0.1
21.8 22.0
Capital expenditure to depreciation and amortisation ratio 1.6x 1.3x
Calculation of covenant net debt to EBITDA ratio
2025 2024
£m £m
Reported net debt 50.8 96.9
Lease liabilities (39.9) (46.0)
Lease liabilities included in liabilities held for sale - (3.0)
Amounts related to refinancing under IFRS 9 2.3 1.5
Covenant net debt (A) 13.2 49.4
Underlying operating profit 151.3 143.5
Depreciation of owned assets 20.5 20.8
Right-of-use asset depreciation 10.1 10.4
Amortisation of development costs 1.1 1.1
Amortisation of other intangible assets 0.2 0.1
Underlying EBITDA 183.2 175.9
Adjusted for:
Lease payments (11.5) (11.0)
Share-based payments expense 2.9 3.4
Annualised EBITDA of subsidiaries acquired/disposed - 5.5
Covenant EBITDA (B) 174.6 173.8
Covenant net debt to EBITDA (A divided by B) 0.1 0.3
4. Non-underlying items
Included in operating profit
2025 2024
£m
£m
Profit on disposal of subsidiaries (a) 1.1 -
Business reorganisation costs (b) (3.7) -
Impairment of assets (c) (14.7) (13.2)
Loss on remeasurement of assets held for sale (a) - (3.1)
Amortisation of acquisition intangibles (10.8) (9.9)
Expenses related to acquisitions and disposals (3.1) (1.9)
Total non-underlying items (31.2) (28.1)
Notes:
a) Following a strategic review in 2024, the Group took the decision
to seek buyers for Hill & Smith Pty Limited, the Group's Australian roads
business, and Parking Facilities Limited, one of our smaller UK security
businesses. At 31 December 2024, in accordance with IFRS 5, the assets and
liabilities of the businesses were recognised as disposal groups held for
sale. Following the classification, losses on remeasurement of £1.1m relating
to Parking Facilities and £2.0m related to Hill & Smith Pty Limited were
recognised in 2024 to reduce the carrying amount of the assets in the disposal
groups to their fair value less costs to sell.
In January 2025 the sale of Hill & Smith Pty's trade and assets was
completed and in February 2025 the Group sold its shareholding in Parking
Facilities. The profit on disposal for each disposal group was as follows:
Parking Hill & Smith Total
Facilities
Australia Pty
Consideration 2.8 5.7 8.5
Net assets disposed (2.2) (5.2) (7.4)
Profit on disposal 0.6 0.5 1.1
The Group also incurred legal fees and other disposal costs of £1.5m,
comprising cash costs of £1.1m in the year and a further £0.4m expected to
be spent in 2026, which are included within 'expenses related to acquisition
and disposals'.
b) Business reorganisation costs of £3.7m relate to the closure of the
Group's trailer-mounted message board manufacturing facility in Garland,
Texas, during the second half of the year. Message board operations have now
been relocated to National Signal's La Mirada, California, facility. The
costs include £1.9m of inventory write-downs and other net closure expenses
of £1.8m. A further impairment charge of £1.1m was recognised, comprising
£0.5m relating to property right-of-use assets, £0.2m relating to
capitalised development costs and £0.4m relating to tangible fixed assets.
c) In addition to the Garland closure, impairment of assets also
includes a full impairment of goodwill and acquisition intangible assets
relating to National Signal, the Group's US off-grid solar business. In
assessing the carrying value of the National Signal CGU, the Board concluded
that National Signal's future cash flows were not sufficient to support its
carrying value, resulting in an impairment of the acquisition goodwill of
£6.7m, acquisition intangible assets of £6.7m and capitalised development
costs of £0.2m.
Impairment losses in the prior year related to H&S Inc., the Group's US
road products business.
Included in taxation
The tax effect of the above items is a credit to the income statement of
£7.5m (2024: £5.9m).
5. Net financing costs
2025 2024
£m
£m
Interest on bank deposits 0.6 0.5
Other interest receivable 0.2 -
Financial income 0.8 0.5
Interest on loans and borrowings (6.7) (8.8)
Interest on lease liabilities (2.0) (2.0)
Financial expenses related to refinancing activities (0.6) (0.5)
Interest cost on net pension scheme surplus - (0.1)
Unwinding of discount and effect of changes in discount rate on deferred (0.3) -
consideration
Financial expense (9.6) (11.4)
Net financing costs (8.8) (10.9)
6. Taxation
2025 2024
£m
£m
Current tax
UK corporation tax 5.4 4.1
Overseas tax at prevailing local rates 22.8 23.4
Adjustments in respect of prior years 0.6 (2.3)
28.8 25.2
Deferred tax
UK deferred tax 1.4 3.7
Overseas tax at prevailing local rates (0.3) (2.4)
Adjustments in respect of prior years (1.1) 1.6
- 2.9
Tax on profit in the Consolidated Income Statement 28.8 28.1
Deferred Tax
Relating to defined benefit pension schemes 0.5 -
Tax on items taken directly to other comprehensive income 0.5 -
Current tax
Relating to share-based payments (0.5) (0.2)
Deferred tax
Relating to share-based payments (0.6) 0.4
Tax taken directly to the Consolidated Statement of Changes in Equity (1.1) 0.2
The tax charge in the Consolidated Income Statement for the period is higher
(2024: higher) than the standard rate of corporation tax in the UK. The
differences are explained below:
2025 2024
£m
£m
Profit before taxation 111.3 104.5
Profit before taxation multiplied by the effective rate of corporation tax in 27.8 26.1
the UK of 25.0% (2024: 25.0%)
Expenses not deductible/income not chargeable for tax purposes 1.8 3.1
Benefits from international financing arrangements - current and prior years (0.1) (0.1)
Local tax incentives - (0.1)
Overseas profits taxed at higher/(lower) rates (0.2) (0.2)
Adjustments in respect of prior years (0.5) (0.7)
Tax charge 28.8 28.1
In October 2017, the European Commission opened a state aid investigation into
the Group Financing Exemption in the UK Controlled Foreign Company ('CFC')
legislation, announcing in April 2019 that it believed in certain
circumstances the CFC regime constituted State Aid. In 2021 the Group received
a charging notice from HMRC requiring it to pay £1.6m in respect of state aid
that HMRC considered had been unlawfully received in previous years, which was
paid in full in February 2021. Applications to annul the Commission's decision
had been made in prior years by the UK Government, the Group and other
affected taxpayers. The EU General Court delivered its decision on these
applications in June 2022, finding in favour of the Commission. In August
2022, the UK Government and several multinationals, including the Group,
appealed against the General Court's decision. The appeal was heard by the
Court of Justice of the European Union ('CJEU') on 10 January 2024, and the
CJEU's judgement was delivered on 19 September 2024 overturning the
Commission's original decision. Following this, HMRC enacted legislation to
provide for the tax, and interest, to be repaid, of which £1.6m was received
by the Group in March 2025.
7. Earnings per share
The weighted average number of ordinary shares in issue during the year was
80.3m (2024: 80.4m), diluted for the effects of the outstanding dilutive share
options to 81.2m (2024: 81.4m). Diluted earnings per share takes account of
the dilutive effect of all outstanding share options, calculated using the
treasury share method. Underlying earnings per share have been shown because
the Directors consider that this provides valuable additional information
about the underlying performance of the Group.
2025 2024
Pence £m Pence £m
per share
per share
Basic earnings 102.7 82.5 95.0 76.4
Non-underlying items* 29.5 23.7 27.6 22.2
Underlying earnings 132.2 106.2 122.6 98.6
Diluted earnings 101.6 82.5 93.9 76.4
Non-underlying items* 29.2 23.7 27.2 22.2
Underlying diluted earnings 130.8 106.2 121.1 98.6
* Non-underlying items as detailed in note 4.
8. Dividends
Dividends paid during the year
2025 2024
Pence £m Pence £m
per share
per share
Interim dividend paid in relation to year ended 31 December 2023 - - 15.0 12.0
Final dividend paid in relation to year ended 31 December 2023 - - 28.0 22.5
Interim dividend paid in relation to year ended 31 December 2024 16.5 13.3 - -
Final dividend paid in relation to year ended 31 December 2024 32.5 26.1 - -
Total 49.0 39.4 43.0 34.5
Dividends declared in respect of the year
2025 2024
Pence £m Pence £m
per share
per share
Interim dividend declared in relation to year ended 31 December 2024 - - 16.5 13.3
Final dividend declared in relation to year ended 31 December 2024 - - 32.5 26.1
Interim dividend declared in relation to year ended 31 December 2025 18.0 14.5 - -
Final dividend proposed in relation to year ended 31 December 2025 35.0 27.9 - -
Total 53.0 42.4 49.0 39.4
The final dividend for 2025 was proposed after the year end date and was not
recognised as a liability at 31 December 2025, in accordance with IAS 10.
9. Cash and borrowings
2025 2024
£m £m
Cash and cash equivalents in the Consolidated Statement of Financial Position
Cash and cash equivalents net of bank overdrafts* 70.4 55.0
Bank overdraft+ (0.7) (0.3)
Bank overdraft classified as held for sale - (3.4)
Cash and cash equivalents net of bank overdraft and overdraft classified as 69.7 51.3
held for sale
Interest bearing loans and other borrowings
Amounts due within one year (25.7) (0.5)
Amounts due after more than one year (54.9) (98.7)
Lease liabilities due within one year (8.6) (9.1)
Lease liabilities due after more than one year (31.3) (36.9)
Lease liabilities classified as held for sale - (3.0)
Net debt (50.8) (96.9)
Change in net debt
Operating profit 120.1 115.4
Non-cash items 59.5 59.8
Operating cash flow before movement in working capital 179.6 175.2
Net movement in working capital (3.1) 0.6
Increase in insurance reimbursement asset (3.6) (3.8)
Increase/(decrease) in provisions and employee benefits 0.2 (3.4)
Operating cash flow 173.1 168.6
Income taxes paid (27.3) (26.5)
Net financing costs paid (5.8) (8.3)
Capital expenditure (34.2) (28.6)
Proceeds on disposal of non-current assets and assets held for sale 1.1 3.4
Free cash flow 106.9 108.6
Dividends paid (39.4) (34.5)
Acquisitions of subsidiaries (including deferred consideration) (3.1) (47.4)
Disposals of subsidiaries 7.4 -
Amortisation of costs associated with refinancing activities (0.6) (0.5)
Purchase of shares for employee benefit trust (4.5) (1.2)
Issue of new shares 0.8 2.5
Leases disposed of 3.0 -
Lease additions, terminations and remeasurements (4.7) (13.3)
Repurchase of shares (20.2) -
Interest on lease liabilities (2.0) (2.0)
Net debt decrease 43.6 12.2
Effect of exchange rate fluctuations 2.5 (0.7)
Net debt at the beginning of the year (96.9) (108.4)
Net debt at the end of the year (50.8) (96.9)
* Included within cash and cash equivalents net of bank overdrafts are
overdrafts amounting to £29.3m (2024: £19.9m) for which the Group has a
legally enforceable right of offset and the intention to settle on a net
basis.
+ Represents an overdraft for which the Group has no right of offset.
Reconciliation of movements in financial liabilities to cash flows arising
from financing activities
2025 2024
£m £m
Interest bearing loans and other borrowings and lease liabilities
At 1 January 148.2 142.8
New loans and borrowings 42.0 62.5
Repayments of loans and borrowings (55.4) (63.7)
Repayment of lease liabilities (9.5) (9.0)
Costs associated with refinancing during the year (1.3) -
Cash flows used in financing activities (24.2) (10.2)
Other changes
Effect of exchange rate fluctuations (4.3) 0.8
Amortisation of costs associated with refinancing activities 0.6 0.5
Lease changes:
Effect of exchange rate fluctuations (1.4) 0.2
New leases 7.3 16.0
Terminations (0.1) (2.2)
Re-measurement (2.5) (0.5)
Acquisitions of subsidiaries - 0.8
Disposals of subsidiaries (3.1) -
Interest expense 2.0 2.0
Interest paid (2.0) (2.0)
At 31 December 120.5 148.2
10. Subsequent events
In March 2026 the Group reached agreement to acquire 80% of the equity of
Freeberg Industrial Fabrication Corp. for a headline cash consideration of
$36m on a debt free, cash free basis. Additional consideration of up to $50m
is payable for the remaining 20% of equity, linked to the achievement of
future profit targets. The acquisition is subject to US regulatory
approvals, which the Group expects in the second quarter of 2026. Located in
Escondido, California, Freeberg is a leading US designer and manufacturer of
custom enclosures and other engineered solutions that serve data centre, power
generation, and other infrastructure markets.
In March 2026 the Group also completed the acquisition of Hentech Fabrication
Limited for a headline cash consideration of €7.3m. Located in Wexford,
Ireland, Hentech is a designer, manufacturer and installer of engineered steel
solutions, focused on access flooring and other industrial fabrication.
Acquisition accounting for both is currently ongoing.
Notes
1. The financial information previously set out does not constitute the
Company's statutory accounts for the years ended 31 December 2025 or 2024 but
is derived from those accounts. Statutory accounts for 2024 have been
delivered to the registrar of companies, and those for 2025 will be delivered
in due course. The auditors have reported on those accounts; their report was:
i. unqualified;
ii. did not include references to any matters to which the auditors
drew attention by way of emphasis without qualifying their report; and
iii. did not contain a statement under Section 498(2) or (3) of the
Companies Act 2006.
2. The Annual Report will be posted to shareholders on or around 16 April
2026 and will be displayed on the Company's website at www.hsgroup.com
(http://www.hsgroup.com/) . Copies of the Annual Report will also be available
from the registered office at Westhaven House, Arleston Way, Solihull, B90
4LH.
3. Events Calendar:
i. The Annual General Meeting will be held at Cranmore Park
Conference, Event & Exhibition Centre, Cranmore Avenue, Shirley, West
Midlands B90 4LF on 21 May 2026.
ii. The proposed final dividend for 2025 will be paid on 3 July 2026
to shareholders on the register on 29 May 2026 (ex-dividend date 28 May 2026).
iii. The last date for receipt of Dividend Reinvestment Plan elections
is 12 June 2026.
iv. Interim results announcement for the period to 30 June 2026 due 12
August 2026.
v. Payment of the 2026 interim dividend due January 2027.
4. This preliminary announcement of results for the year ended 31 December
2025 was approved by the Directors on 10 March 2026.
Cautionary Statement
This announcement contains forward looking statements which are made in good
faith based on the information available at the time of its approval. It is
believed that the expectations reflected in these statements are reasonable,
but they may be affected by a number of risks and uncertainties that are
inherent in any forward looking statement which could cause actual results to
differ materially from those currently anticipated. Nothing in this document
should be regarded as a profits forecast.
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. END FR SFUFUSEMSEFD
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