DAVY VIEW

Hill & Smith has beaten our expectations and upgraded its FY guidance following very strong trading in the first four months of FY24. This has been driven by US infrastructure and Galvanising activity. Engineered Solutions margins also surprised to the upside. We now expect the Board to increase its 15% group EBITA margin target within the next 12 months. With guidance that FY24 adjusted EBITA is now expected to be slightly above the top end of the consensus range (£134.7m), we see scope for a 6-7% consensus upgrade. The shares needed upgrades given the full valuation; this has been delivered and we reiterate our ‘Outperform’ rating. Interim results are due on August 8th.