DAVY VIEW

Hill & Smith (HILS) has delivered another strong set of results, ahead of our and consensus expectations at revenue, profits and EPS. Strong cash generation is funding M&A (another US acquisition, FM Stainless, was announced today) and there was a 23% increase in the FY dividend. Growth was driven by the US operations, as expected, with further mid-single-digit organic revenue growth guided for CY24. ROIC increased 280bps to an impressive 22.0%. We see scope for modest upgrades to consensus FY24 EBITA. We reiterate our ‘Outperform’ rating.