Hill & Smith (HILS) H2 2025 earnings summary

Executive summary

• Strong U.S. performance drove overall growth, with U.S. businesses contributing 63% of revenue and 79% of operating profit in 2025.

• Organic constant currency revenue grew 3% year-over-year, accelerating to 4% in H2, and underlying operating profit increased 6% organically.

• Two strategic acquisitions (Freeberg in the U.S. and Hentech in Ireland) were announced, enhancing exposure to high-growth end markets.

• Operating margin expanded by 60bps to 17.4%, and underlying EPS grew 8% to GBP 1.322.

• U.K. markets remained challenging, but strong cash generation and disciplined capital allocation supported growth.

Financial highlights

• Revenue reached GBP 869 million, up 3% organically year-over-year; H2 growth was 4%.

• Underlying operating profit rose 6% on an OCC basis to GBP 151.3 million; operating margin increased to 17.4%.

• Return on invested capital improved by 190bps to 26.7%.

• Underlying EPS grew 8% to GBP 1.322; total dividend up 8% to GBP 0.53.

• Cash conversion was 91%, well above the 80% target.

Outlook and guidance

• Strong trading momentum in the U.S. expected to continue into 2026, underpinned by infrastructure investment and capacity expansion.

• U.K. outlook remains cautious with lower project activity anticipated; operations under review for resilience.

• 2026 guidance: capital expenditure c.GBP 50 million (half for U.S. expansion), cash conversion c.80%, effective tax rate c.25.5%.

• Group will report in U.S. dollars from H1 2026 to reflect increased U.S. earnings and reduce FX volatility.

• Confident in further progress for 2026 and beyond, with focus on high-growth niche markets and active M&A.