FTSE 250 movers: Hill & Smith, Balfour surge on results

(Sharecast News) - FTSE 250 (MCX) 21,858.71 0.07% Construction and infrastructure products group Hill & Smith surged as it announced a £100m share buyback programme after reporting strong cash generation and a double-digit increase in underlying profits in the first half.

The company, which operates a range of brands across the engineering solutions markets in the US, UK and India, along with galvanising services in the US and UK, said underlying operating profit totalled £73.5m over the six months to 30 June, up 11% at constant currencies.

Revenues were up 4% at £413.6m, driven by good performances in the US Engineered Solutions and Galvanizing Services divisions.

Underlying cash conversion improved to 85%, from 83% in the first half of 2024, while the return on invested capital rose to 25.7% from 22.5%.

Meanwhile, covenant leverage improved to 0.1 times, down from 0.3 times at the end of last year, which Hill and Smith said provides it with "significant capital allocation flexibility for both growth and returns".

Regarding the portfolio, the company said it has an "active" M&A pipeline with multiple discussions ongoing, particularly involving its larger US platform businesses.

"We have delivered another record performance in the first half, driven by a strong performance in our larger US platform businesses and better profitability in the UK," said chief executive Rutger Helbing.

Looking ahead, the company said full-year underlying operating profits should be in line with market expectations, ranging from £147.3m to £153.0m, with its second-half outlook underpinned by continued growth in US end markets.

"Having assessed the capital requirements for the group, given the strength of the balance sheet and cash generation we have the capacity to return capital to shareholders, without compromising our ability to deliver on our growth priorities. We are therefore today announcing a £100m share buyback," Helbing said.

Infrastructure group Balfour Beatty lost ground even as it backed its full-year expectations, reporting an increase in first-half profit as strength in the UK construction business offset US weakness.

In the half year ended 27 June, pre-tax profit rose to £132m from £112m in the same period a year ago, on revenue of £5.2bn, up from £4.7bn.

Balfour said the UK construction arm delivered profitable underlying growth to achieve its 3% margin target one year ahead of expectations. The division achieved a 3.6% PFO (profit from operations) margin.

The US construction business posted a first-half loss, however, with a strong Buildings performance offset by cost overruns at one Civils project.

Balfour said the order book grew 6% to £19.5bn, with growth in each segment, and "continues to give clear visibility in the short and medium term".

Chief executive Leo Quinn said: "Our continuing strong cash generation is underpinned by a growing order book with improved margins and lower risk contract forms. This provides the board with increasing confidence in significant future cash generation that supports our ongoing dividends and share buybacks. This is demonstrated by the momentum in our key growth areas in the first half.

"Support Services has delivered a 35% profit uplift driven by the power transmission business, UK Construction has achieved its long-standing 3% margin target earlier than expected and, in US Construction, Buildings reported strong revenue growth from its strategy of focused expansion.

"Furthermore, recent UK Government announcements confirm a deep pipeline of major infrastructure projects which closely align with the group's unique expert capabilities and will further enhance the quality of the future order book."

FTSE 250 - Risers

Hill and Smith (HILS) 2,165.00p 10.01% Spire Healthcare Group (SPI) 227.50p 6.31% Oxford Nanopore Technologies (ONT) 221.60p 4.73% Jupiter Fund Management (JUP) 131.60p 2.97% 4Imprint Group (FOUR) 3,370.00p 2.28% Fidelity China Special Situations (FCSS) 292.50p 2.09% Sirius Real Estate Ltd. (SRE) 102.40p 2.09% Zigup (ZIG) 344.00p 2.08% Morgan Advanced Materials (MGAM) 205.00p 1.74% B&M European Value Retail S.A. (DI) (BME) 226.90p 1.70%

FTSE 250 - Fallers

Watches of Switzerland Group (WOSG) 331.60p -3.15% Derwent London (DLN) 1,747.00p -3.00% Diversified Energy Company (DEC) 1,110.00p -2.63% Pagegroup (PAGE) 260.40p -2.54% Playtech (PTEC) 422.00p -2.54% Greggs (GRG) 1,584.00p -2.34% Balfour Beatty (BBY) 556.00p -2.20% Marshalls (MSLH) 197.60p -2.18% Close Brothers Group (CBG) 535.00p -2.01% Wizz Air Holdings (WIZZ) 1,332.00p -1.99%