Hill & Smith PLC (LSE:HILS) has raised its full-year 2026 profit expectations after strong U.S. infrastructure demand drove first-half revenue and earnings higher, supported by increasing exposure to power transmission, data centres and other structural growth markets.
U.S. growth drives first-half performance
Hill & Smith reported first-half revenue of $606.7 million, representing organic constant currency growth of 5%.
Underlying operating profit increased 8%, while the underlying operating margin remained stable at 17.0%.
The strongest performance came from the U.S., where organic revenue increased 14%. Demand for infrastructure products and solutions helped offset weaker trading within the UK Engineered Solutions business.
Power transmission and data centres are becoming increasingly important end markets for the group, providing additional exposure to infrastructure investment beyond its established transport and construction activities.
Hill & Smith raises FY26 profit guidance
Following the first-half performance, the board increased its expectations for underlying operating profit for the full year.
The upgrade reflects continued strength across Hill & Smith’s U.S. operations and the group’s increasing exposure to infrastructure markets where management sees attractive long-term growth opportunities.
Capital returns also increased. Hill & Smith raised its interim dividend by 7% and continued to make progress with its £100 million share buyback programme.
Return on invested capital improved to 26.7%, while leverage remained low at 0.4 times, giving the company financial flexibility to fund organic investment, acquisitions and shareholder returns.
Portfolio strategy targets higher-growth infrastructure markets
Hill & Smith has continued to reshape its portfolio around businesses serving infrastructure markets with stronger growth characteristics.
Recent activity includes investment in its U.S. operations and the integration of Freeberg and Hentech. The group has simultaneously streamlined parts of its UK portfolio and implemented cost reductions where performance has been weaker.
Management is also maintaining an active M&A pipeline as it looks for opportunities that complement the group’s existing infrastructure businesses.
The combination of acquisitions, portfolio optimisation and organic investment could further increase Hill & Smith’s exposure to areas such as energy transmission and distribution, data centres and other critical infrastructure.
Strong balance sheet supports expansion
Hill & Smith’s low leverage is an important component of its growth strategy.
At 0.4 times, leverage provides capacity to pursue acquisitions and organic investments without placing significant immediate pressure on the balance sheet. The improvement in return on invested capital to 26.7% also indicates stronger returns from capital already deployed across the business.
Financial momentum is supported by recent revenue growth and margin expansion, although cash-flow volatility remains an area to monitor following the sharp decline in free-cash-flow growth during 2025.
Technical indicators are also supportive, with Hill & Smith shares trading above key moving averages and momentum indicators remaining positive.
Valuation provides a more mixed picture. The shares trade at a relatively high price-to-earnings multiple, while the dividend yield is modest, increasing the importance of continued earnings delivery to support the current valuation.
More about Hill & Smith PLC
Hill & Smith PLC is a UK-listed infrastructure products and services group employing approximately 5,000 people across the UK, U.S. and India.
Its operations are organised across U.S. Engineered Solutions, UK and India Engineered Solutions and Galvanizing Services, serving markets including energy transmission, data centres, transport infrastructure and construction.
The U.S. business supplies composite and steel products for power transmission and distribution, data centres, transportation and waterfront protection, alongside infrastructure products serving water, LNG, road safety and off-grid applications.
Its UK and India businesses serve transport, construction, security and energy markets, while the Galvanizing Services operations provide protective coatings designed to extend the usable life of steel infrastructure.
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