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1. Company Snapshot

1.a. Company Description

Hill & Smith Holdings PLC manufactures and supplies infrastructure products in the United Kingdom, rest of Europe, North America, the Middle East, rest of Asia, and internationally.It operates through Roads & Security; Utilities; and Galvanizing Services segments.The Roads & Security segment designs, manufactures, and installs temporary and permanent safety products for the roads market, as well as provides range of security products to protect people, buildings, and infrastructure from attacks, including hostile vehicle mitigation solutions, high security fencing, and automated gate solutions.


This segment also offers permanent road safety barriers, renewable energy lighting and power solutions, temporary work zone protection products, perimeter security, pedestrian protection products, intelligent traffic solutions, street lighting columns, and car park and bridge parapets.The Utilities segment supplies engineered steel and composite solutions for a range of infrastructure markets, including energy generation and distribution, marine, rail, and housing sectors; and supplies engineered pipe supports for the water, power, and liquid natural gas markets, as well as offers seismic protection solutions.This segment also produces steel products for construction industries, such as residential construction and data centers.


The Galvanizing Services segment provides corrosion protection services in the form of hot-dip zinc galvanizing and other coatings for steel products, which includes steel works, lighting columns, bridges, agricultural equipment, and other products for the industrial and infrastructure markets.Hill & Smith Holdings PLC was founded in 1824 and is headquartered in Solihull, the United Kingdom.

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1.b. Last Insights on HILS

Hill & Smith Holdings PLC's recent performance has been driven by several positive factors. The company's board has announced a larger dividend payout of £0.325, indicating a commitment to shareholder returns. Additionally, an analysis suggests that the stock may be undervalued, with a projected fair value of UK£20.88 based on a 2-stage Free Cash Flow to Equity model. This potential undervaluation and increasing dividend payment may contribute to a positive outlook for the company.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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Hill & Smith PLC (LON:HILS) Looks Interesting, And It's About To Pay A Dividend

Nov -23

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Hill & Smith (LON:HILS) Is Due To Pay A Dividend Of £0.18

Nov -19

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Is Hill & Smith PLC's (LON:HILS) Latest Stock Performance Being Led By Its Strong Fundamentals?

Nov -17

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Hill & Smith (LON:HILS) Is Due To Pay A Dividend Of £0.18

Nov -01

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Hill & Smith (LON:HILS) Has Announced A Dividend Of £0.18

Oct -18

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Form 8.3 - IQE Plc

Sep -09

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Taylor Wimpey (LSE:TW.): A Fresh Look at Valuation After a Year of Share Price Pressure

Sep -09

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Assessing Diageo (LSE:DGE) Shares: Is the Current Valuation a Missed Opportunity?

Sep -09

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.40%)

6. Segments

Engineered Solutions

Expected Growth: 3%

Hill & Smith Holdings PLC's Engineered Solutions segment growth is driven by increasing demand for infrastructure projects, rising adoption of sustainable energy solutions, and strategic acquisitions. Additionally, the segment benefits from a strong order book, cost savings initiatives, and a focus on high-margin products, contributing to its 3% growth.

Roads & Security

Expected Growth: 5%

Hill & Smith Holdings PLC's Roads & Security segment growth is driven by increasing government investments in infrastructure development, rising demand for road safety products, and growing adoption of smart traffic management systems. Additionally, the segment benefits from the company's strong reputation, long-term contracts, and strategic acquisitions, contributing to a 5% growth rate.

Galvanizing Services

Expected Growth: 2%

Hill & Smith Holdings PLC's Galvanizing Services segment growth is driven by increasing demand for corrosion protection in infrastructure projects, rising adoption of sustainable construction practices, and strategic expansion into new geographies. Additionally, the company's focus on innovation and customer service has led to market share gains, contributing to the 2% growth rate.

7. Detailed Products

Road Safety Products

Hill & Smith Holdings PLC offers a range of road safety products, including crash barriers, road restraint systems, and safety fences, designed to reduce the risk of accidents and protect road users.

Galvanizing Services

The company provides hot dip galvanizing services to protect steel from corrosion, offering a durable and long-lasting solution for a wide range of industries.

Temporary and Permanent Fencing

Hill & Smith Holdings PLC offers a range of temporary and permanent fencing solutions, including heras fencing, pedestrian barriers, and security fencing, for construction sites, events, and permanent installations.

Highway Engineering Products

The company designs and manufactures a range of highway engineering products, including bridge parapets, crash cushions, and road signs, to improve road safety and infrastructure.

Security Products

Hill & Smith Holdings PLC offers a range of security products, including security fencing, gates, and access control systems, to protect people, property, and assets.

8. Hill & Smith Holdings PLC's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Hill & Smith Holdings PLC is moderate due to the availability of alternative products and services in the infrastructure and security markets.

Bargaining Power Of Customers

The bargaining power of customers for Hill & Smith Holdings PLC is low due to the company's strong brand reputation and the lack of buyer concentration in its markets.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Hill & Smith Holdings PLC is moderate due to the presence of multiple suppliers in the market, but the company's large scale of operations gives it some negotiating power.

Threat Of New Entrants

The threat of new entrants for Hill & Smith Holdings PLC is low due to the high barriers to entry in the infrastructure and security markets, including the need for significant capital investment and regulatory approvals.

Intensity Of Rivalry

The intensity of rivalry for Hill & Smith Holdings PLC is high due to the presence of several established competitors in the infrastructure and security markets, leading to a competitive pricing environment.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 20.15%
Debt Cost 9.96%
Equity Weight 79.85%
Equity Cost 10.24%
WACC 10.18%
Leverage 25.23%

11. Quality Control: Hill & Smith Holdings PLC passed 9 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Rai Way

A-Score: 7.2/10

Value: 3.1

Growth: 5.7

Quality: 8.5

Yield: 8.8

Momentum: 7.5

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
San José

A-Score: 6.4/10

Value: 7.8

Growth: 7.2

Quality: 5.4

Yield: 3.1

Momentum: 8.5

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
PORR

A-Score: 6.0/10

Value: 8.7

Growth: 4.4

Quality: 4.5

Yield: 5.0

Momentum: 10.0

Volatility: 3.3

1-Year Total Return ->

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Stock-Card
Peab

A-Score: 5.7/10

Value: 7.1

Growth: 5.2

Quality: 3.5

Yield: 7.5

Momentum: 4.0

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
Hill & Smith

A-Score: 5.5/10

Value: 3.8

Growth: 6.7

Quality: 7.0

Yield: 3.8

Momentum: 5.5

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
Severfield

A-Score: 4.3/10

Value: 10.0

Growth: 2.8

Quality: 4.6

Yield: 7.5

Momentum: 0.0

Volatility: 0.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

21.65$

Current Price

21.65$

Potential

-0.00%

Expected Cash-Flows