Good morning, everyone. I'm Alan Giddins, Executive Chair of Hill & Smith. Welcome to our interim results presentation. In terms of the structure of the presentation, I will run through the highlights before passing over to Hannah Nichols, our Group CFO. I will then pick back up to cover off strategy and what we're going to be doing to drive the business to achieve its full potential. This is a good set of results with revenue and operating profit on a constant currency basis up 9% and 10% respectively, and up 12% and 16% on a reported basis. Noting that France Galva has been taken out of both the H1 and comparative numbers. This performance reflects the quality of our local management teams, the robustness of our end markets, and the strength of our market positioning.
It is this combination of factors that has allowed us to substantially recover through pricing the rise in input costs, which we have experienced since the first half of 2021. On the 25th of July, we announced a proposed sale of our France Galva business for proceeds of GBP 61.5 million. Our expectation is that the transaction will complete during September through early October, depending on works council approval. We have also made progress with the disposal of our Swedish rental business and our Traffic Cones business in the U.S. The disposal of France Galva further strengthens our balance sheet. We are well-placed to accelerate our M&A strategy. Before any proceeds from France Galva, as at the 30th of June, we had net leverage of 1.1 x EBITDA. Pro forma leverage, assuming completion of the France Galva disposal, would be 0.7 x.
While respectful of the broader macro headwinds, the positive dynamics of the markets we are focused on gives me confidence in the short and medium-term outlook for the business. As a result, we recently reconfirmed our expectations for 2022 with the potential for outperformance as a result of FX. As a result of this, we have also increased our dividend by 8% to 13%. A very positive set of numbers, and I'll now pass over to Hannah to talk through the details.
Good morning, everyone. Before I kick off, it's worth noting that the proposed disposal of France Galva announced last week means that France Galva is now classified as a discontinued operation, and the performance is excluded from the current and the prior year results I'll be walking you through shortly. For further details, please refer to the appendix in this presentation and the notes to the interim accounts. The group achieved a good first half trading performance against robust 2021 comparators. Revenue from continuing operations was GBP 349.9 million, 9% ahead of 2021 on a constant currency basis. At GBP 43.6 million, underlying operating profit constant currency growth was 10%. Operating margins also improved to 12.5%, a 50 basis point improvement compared to the same period last year.
Underlying profit before tax was 17% higher at GBP 40.2 million, and with an effective tax rate of 23%, earnings per share for continuing operations increased by 13% to GBP 0.387 . Earnings per share for the total group, which includes the results of France Galva, were GBP 0.432 , an increase of 12% versus H1 2022. The first half performance reflects the pricing actions taken by our local teams to offset cost input inflation and the good levels of pricing power across the portfolio given our strong market positions. Our teams are also continuing to navigate supply chain challenges, and while availability of raw material has improved during the period, labor availability remains a challenge in certain businesses. We are taking action to address this, including enhancing employee compensation and investing in training and apprenticeship schemes.
The good performance in the first half also highlights the benefits of our choice of resilient long-term end markets and the international mix of businesses within the group. As you can see from the charts on the top, Galvanizing contributed to around a quarter of group revenue in the first half, with revenue fairly evenly split across the remaining two divisions. The split of operating profit on the top right really highlights the standout performance in the Galvanizing division, which contributed to almost half of group operating profits in the period, even with the exclusion of France Galva. In addition, the share of profits in the Engineered Solutions division, previously known as Utilities, was greater than Roads & Security. This reflects the continuing strong performance across both the U.K. and the U.S. Engineered Solutions portfolio.
As expected, the profits in the Roads & Security division were lower than last year due to timing of U.S. barrier sales and lower utilization of the U.K. temporary barrier fleet compared to last year. The charts at the bottom reflect our geographic mix with the U.S. and the U.K. remaining our key focus areas for both organic growth and targeted acquisition opportunities. If we now turn to the results of our Galvanizing division. The Galvanizing division was the standout performer in the first half. OCC revenue growth was 17%, and underlying operating profit increased by an impressive 20%. I'm also pleased to report that the division continued to maintain superior margins, with underlying operating margins increasing by 90 basis points to 25.3%. The U.S. business delivered a strong performance with 16% OCC revenue growth and record operating profit.
The strong revenue and profit growth is due to an increase in production volumes, a continued focus on customer service, and successful pricing actions. The U.K. business also had a very strong first half, with 70% organic revenue growth and record operating profit. This reflects swift pricing actions and the continuation of our strategy to focus on higher margin work, with volumes lower than the same period last year due to the absence of certain lower margin construction projects. As illustrated by the chart on the slide, the division benefits from a wide sectoral spread of customers operating in resilient end markets, and both businesses enter the second half with a positive outlook despite the macroeconomic headwinds. The medium to long-term growth prospects for galvanizing are supported by a number of fundamental growth drivers, including sustainable infrastructure and decarbonization.
As a reminder, galvanizing is a proven corrosion protection system which optimizes the service life of steel structures. This results in maintenance savings for our customers and significantly reduces the life cycle carbon footprint of a steel structure compared to paint alternatives. Now moving on to our Engineered Solutions division, which was previously known as the Utilities division. The division continued to perform strongly in the first half of the year, with 21% revenue growth and 14% profit growth on an OCC basis. As previously guided, operating margins were lower than the same period last year at 10.3%, mainly due to a less favorable product mix in U.S. composites. The U.S.-based businesses delivered 19% OCC revenue growth and good profit growth against strong prior year comparators, with strong levels of demand across our composite solutions, engineered supports, and electricity distribution substation business.
Revenue in our U.K. businesses grew 30% on an organic basis, with operating margins also improving during the period, reflecting successful pricing actions and buoyant levels of demand across both our building products and industrial flooring businesses. The second half outlook for the division is encouraging, and across the portfolio we see opportunities to grow our market share in attractive niche growth markets. A breakdown of revenue by end market is shown on the slide. We have a number of operating companies within the portfolio who provide products and solutions to support sustainable construction or address the challenges of extreme weather conditions, including composite waterfront protection products, vibration isolation supports, and fire and storm-resistant utility poles. As a result, we consider climate change, sustainable materials, and decarbonization to be fundamental growth drivers for the division, alongside the pressing need to upgrade aging electricity infrastructure in the U.S.
If we now turn to Roads & Security. As expected, revenue and profit were below the same period last year, with revenue 6% lower and operating profit 12% lower on a constant currency basis. Operating margins were also slightly lower at 6.3%. The reduction in profit is mainly due to the timing of U.S. roads projects and lower utilization of the U.K. temporary barrier fleet, partly offset by strong performance in the wider U.K. roads portfolio. We expect to see an improved performance in the second half as activity levels increase. In U.K. roads, revenue was 8% higher than last year on an organic basis. As previously outlined, in January 2022, the U.K. government issued its response to the Transport Committee review on the safety of smart motorways.
Recommendations included pausing the rollout of further all-lane running schemes until sufficient safety data is available. As expected, this resulted in lower utilization of our temporary safety barrier fleet in the first half compared to 2021. Utilization is expected to increase significantly in the second half as central reservation upgrade projects commence after redesign work, and we expect this higher level of utilization to carry into 2023. In the period, we saw a good demand across the wider U.K. roads portfolio, with the revenue growth offsetting the shortfall in the rental barrier fleet. In addition, Prolectric, our off-grid solar lighting and power generator business, delivered a strong performance with a good order book supported by increasing demand for low carbon and energy cost saving solutions.
In the U.S., revenue was 9% lower than the same period last year on an OCC basis, which was largely driven by the timing of barrier sales. Margins were also impacted by transition costs associated with the setup of our new fabrication and assembly facility in Texas. Demand for our range of roadside safety products remains strong, and we expect progress on margins in the second half. The U.K. security businesses delivered 7% organic revenue growth, with an encouraging recovery in the market for hostile vehicle mitigation solutions. We expect a strong performance in the U.K. security barrier rental in the second half as our security solutions will be used to support high-profile events, including the Commonwealth Games in Birmingham.
The medium-term outlook for the division remains encouraging, supported by a number of long-term fundamental growth drivers, including the continued need to upgrade road infrastructure to support increasing road usage, Vision Zero and other road safety initiatives, and an increased focus on worker safety in both the U.K. and the U.S. If we now move on to cash generation and financing. While the group continues to be cash generative as expected, underlying cash conversion in the first half was lower than the first half of 2021. This was driven by a GBP 41.5 million working capital outflow. The outflow partly reflects normal seasonal trends with working capital to support good growth this year. However, unlike last year, we have seen a significant increase in inventory valuations due to raw material cost inflation, with inventory outflows representing GBP 20 million of the overall movement.
We continue to focus on maximizing working capital efficiency and assuming typical trading patterns, we expect much improved cash conversion in the second half. Capital expenditure was GBP 17 million, representing a multiple of depreciation and amortization of 1.5 x. In the period, we allocated around GBP 13 million of capital to support growth, including GBP 4.8 million of spend on our U.S. roads temporary barrier fleet. We continue to maintain significant liquidity headroom and leverage capacity to support future growth opportunities. Net debt at the end of the period was GBP 165.5 million, with a ratio of covenant net debt to EBITDA standing at 1.1 x. The group continues to operate well within its financing facilities, and we have started positive discussions with lenders in respect to refinancing our revolving credit facility.
We expect the refinancing process to be complete by the end of this year. We use return on invested capital to measure our overall capital efficiency with a target of achieving returns in excess of 17%, comfortably above the group's cost of capital through the cycle. Return on invested capital for continuing operations was 17.5% in the first half, reflecting our disciplined approach to capital investment and the steps we're taking to improve the overall quality of the portfolio. The growth of our business is naturally aligned to our ESG agenda. Our products and services make infrastructure more sustainable and increase transport safety. With this in mind, we established our ESG strategy last year, and our seven key focus areas are shown on the slide.
ESG is a subject I'm personally passionate about, and I've been a member of the ESG steering group from the outset. I'm also delighted that Alan Giddins will be joining the ESG steering group from September. I'd now like to update you on some of the progress we've made in the first half. Lucinda Farrington-Parker has joined as our head of sustainability and has been instrumental in setting up the group's sustainability forum, which has representation from all of our operating companies. We've been really impressed with the level of engagement from our businesses, and this was demonstrated in our first group-wide ESG week held in June. As a reminder, we have committed to reach net zero for our Scope 1 and 2 emissions by 2040 alongside a commitment to validate SBTi targets by August 2023.
Our focus in the first half of this year has been on establishing the group's Scope 3 baseline, and we expect to complete this by the end of this year. This is a really key step to enable us to determine and to validate SBTi targets in 2023. Alongside this, we've been working with local teams on energy saving initiatives, and we continue to refine our carbon reduction plan. We're also continuing to progress our understanding of the sustainability of our products and the value to society by rolling out the methodology established last year to a broader range of products. Health and safety remains a key focus area for the group, and we're working on a number of improvement initiatives to support our 2022 LTIR reduction targets. Finally, talent and development and an engaged workforce are absolutely critical to our future success.
In March, we kicked off the managing director's development program with key development focus areas identified as growth mindset, ESG, and innovation. In May, our head of talent joined the team to enable the acceleration of our talent plans, including the introduction of personal development plans for our senior leaders. I'd now like to hand back to Alan to provide more color around our growth opportunities and strategy.
Thanks, Hannah. I and the board are excited about the potential of Hill & Smith. We're exposed to a number of long-term growth drivers. Our focus is on ensuring that we outperform our underlying markets. In Galvanizing, in addition to the core fundamentals around lifetime maintenance and sustainability, we see infrastructure spend remaining a key government policy priority in both the U.K. and U.S. At the end of June, I spent a week in the U.S. with our teams going around a number of our operations. We expect to see the benefits of the U.S. infrastructure bill coming through during 2023. Something which is very consistent with the messaging coming out of other companies in the sector and the large rental groups. We have also seen some early evidence to support this view in terms of quotes going out on major infrastructure projects.
Within Engineering Solutions, we see the same principles of demand for sustainable construction materials, and that plays well into our composite solutions businesses, where we are able to manufacture long life, high strength, lightweight products, which are able to provide genuine solutions for clients. Indeed, the Biden administration executive orders clearly flag that sustainability will be an important criterion for awarding federal monies for infrastructure. This sits alongside a fundamental need for long-term investment into U.S. electricity infrastructure, supported by $65 billion of incremental funding from the U.S. infrastructure bill. In U.K. roads, we continue to see the benefits of Road Investment Strategy spend. As Hannah mentioned, we expect to see RIS2 scheme activity increase in H2, which will drive higher barrier utilization in the second half and into 2023.
In addition, with traffic levels forecast to rise in the medium to longer term, RIS3 is expected to increase investment into the strategic road network beyond 2025, with National Highways expecting spend levels for RIS3 to be set at around GBP 35 billion compared to GBP 27 billion for RIS2, a 27% increase. Encouragingly, National Highways are starting to provide visibility of specific RIS3 schemes in their latest planning updates. In the U.S., the infrastructure bill includes a five-year reauthorization of the Federal Highway Program and invests $348 billion in highway and bridge schemes through to 2026. We are well-placed to take advantage of this spend. You will have seen this slide before. Our strategy is unchanged. What I want to focus now on is the how.
How are we gonna drive growth and what are we gonna do differently to cause a step change in our pace of delivery? We're gonna facilitate this through three key actions. First, while I believe the role of the group president is an important component in the effectiveness of our decentralized model, we're gonna bring the group presidents closer to the operating companies so that we can allow for quicker and better informed decision-making. I also want to ensure we are maximizing the benefit of knowledge sharing across the group. Secondly, we're gonna be making sure we fully energize the entrepreneurial culture within the business, which is our greatest asset. Finally, through driving the M&A agenda with less desktop analysis and more boot leather, we want to be first in the door and making sure we develop relationships with owner managers well ahead of any sale process.
This will be a key focus for me over the next six months and for our future CEO. We announced the proposed disposal of France Galva on the 25th of July to a consortium bid from a trade buyer together with the managing director of our French businesses. This gives us a clean exit from the business with minimum warranties. We would hope to have a circular out to shareholders in mid to late August such that we can complete a transaction during September/early October. In terms of the rationale for the proposed disposal, this is driven by our desire to make sure we focus our firepower into our best markets.
In our view, this did not include France, where we saw a much more competitive marketplace with competition coming not just from French galvanizers, but also from Spanish and German galvanizers close to the French border who compete very aggressively on price and with a much more flexible labor base. We also saw limited strategic value in our French lighting column business, which is a business making 7% margins at best with no obvious differentiation. While dilutive to EPS on day one, the proposed disposal is enhancing to our operating margins and growth rates. It also gives us more firepower to proactively accelerate our M&A strategy. Over the last two weeks, I've had the opportunity to have face-to-face and virtual meetings with all of our managing directors and multiple meetings with our group presidents.
I've also benefited from being in Solihull and interacting real time with our head office team. This has reconfirmed to me both the quality of the businesses we have, but also the strength and depth of our management teams. In terms of my focus, it will be on the following four key areas. First, undertaking a detailed appraisal of our U.S. roads business. This is a business leaning into one of our best growth markets. I want to facilitate a step change in the performance of this business. Secondly, working closely with our M&A team, group presidents, and managing directors to accelerate our M&A agenda. I'm gonna be out in the U.S. in two weeks time together with Joel Whitehouse, our head of corporate development, and we will be meeting the owners of some of our key priority targets.
Thirdly, ensuring we continue to drive our health and safety and sustainability agendas. This is an area where Paul drove significant change in our business, and I have no intention of allowing us to lose momentum. Finally, being visible and highly accessible across the organization. In terms of the outlook for the group, while we cannot dismiss either the challenges of inflation or the recessionary pressures that are building up in both the U.K. and U.S. economies, what we have in Hill & Smith is a range of businesses focused on specific niche products which we can expect to benefit from the current focus of government infrastructure spend in both the U.S. and U.K. It is this which makes me feel very positive about both our short and medium-term outlook. Thank you for your time.