Billington Holdings Plc (LON: BILN), one of the UK’s leading structural steel and construction safety solutions specialists, has today announced its unaudited interim results for the six months ended 30 June 2019.
|Unaudited six months to 30 June 2019||Unaudited six months to 30 June 2018||Percentage Movement|
|Profit before tax||£2.68m||£1.94m||38.1%|
|Cash and cash equivalents||£10.01m||£7.56m||32.4%|
|Earnings per share (EPS) from continuing operations||17.80p||12.80p||39.1%|
· Record revenue, with an increase of 19.7 per cent to £47.15 million (H1 2018: £39.39 million)
· Profit before tax increased 38.1 per cent to £2.68 million (H1 2018: £1.94 million)
· EPS increased 39.1 per cent to 17.80 pence
· Further positive cash growth
· Continued investment in the safety solutions businesses
· All Group companies have performed well over the period, with momentum from 2018 continuing into the current year
· Continued, successful delivery of large European project with prospect for future works
· Billington Structures was awarded two contracts with a combined value of £30 million in June 2019 ensuring production volumes are likely to remain at similar levels
Mark Smith, Chief Executive of Billington Holdings, commented:
“I am very pleased with the Group performance in the first half of the year, continuing the strong momentum from 2018. We started the year with a record order book and consequently the first half has been a very busy period for the Group across all our businesses. We have continued to build our order book with further significant contracts secured.
“Whilst the overall market continues to be uncertain, the outlook for Billington remains positive, particularly given the Group’s ability to target a diverse range of projects insulating us, in part, from any temporary slowdowns in the market. I look forward to the remainder of the year and beyond with cautious optimism.”
Chief Executive Statement
All the Group companies have experienced a strong start to the year and it has been a good first half for the Company. A number of large projects have been undertaken, resulting in revenues increasing by 19.7 per cent to £47.15 million for the period.
For the remainder of 2019 the Group has a very strong order book and we anticipate further progress in the second half, whilst mindful of the continuing uncertainty in our markets as a result of the UK’s impending exit from the European Union.
Billington Structures and Shafton Steel Services
Billington Structures is one of the UK’s leading structural steelwork contractors with a highly experienced workforce capable of delivering projects from simple building frames to complex structures in excess of 11,000 tonnes. With facilities in Barnsley and Bristol and a heritage dating back over 70 years, the business is well recognised and respected in the industry with the capacity of processing over 35,000 tonnes of steel per annum.
The Shafton facility was acquired in 2015 and has been fully integrated into Group operations. Alongside the successful integration, two separate business areas have been developed on the site. The first undertakes activities for Billington Structures and has continued to enjoy a strong performance driven by high production volumes. The second, Shafton Steel Services, offers a complete range of steel profiling services to a large number of diverse external engineering and construction companies, providing further opportunities to increase the capacity of the current business units as well as allowing for the development of new, value added, complementary products and services to enhance the comprehensive offering of the Group.
During the first half of the year the business has traded very strongly, particularly through the execution of the £41 million of contracts announced in November 2018. This momentum is continuing into the second half as these and other contracts move towards completion, with a further £30 million of large contracts secured in June 2019. Billington Structures has a substantially full order book for the remainder of the year and the focus will be on both the successful completion of existing contracts and the securing of new business for 2020 and beyond.
Peter Marshall Steel Stairs
Based in Leeds, Peter Marshall Steel Stairs is a specialist designer, fabricator and installer of bespoke steel staircases, balustrade systems and secondary steelwork. It has the capability to deliver stair structures for the largest construction projects and operates in sectors spanning retail, commercial offices, education, healthcare, rail and many more.
In the first half of 2019 the business delivered another good performance, fulfilling a smaller number of larger contracts for principal contractors, Billington and other steelwork companies.
easi-edge is a leading site safety solutions provider of perimeter edge protection and fall prevention systems for hire within the construction industry. Health and safety is at the core of the business which operates in a legislation driven market.
In the first half the business delivered another strong performance, carrying on from the progress made in 2017 and 2018. This is expected to continue in the second half as easi-edge continues to benefit from a strong order book.
Further investments have been made in the business, adding to the stock available for hire, reflecting the market demand for easi-edge’s solutions, one of the higher margin segments for the Group.
hoard-it produces a unique range of re-usable temporary hoarding solutions which are environmentally sustainable and available on both a hire and sale basis tailored to the requirements of its customers.
Under the new leadership introduced last year the business continues to thrive and the momentum gained in 2018 has continued in the first half. Significant progress continues to be made to establish the product as the number one choice for main contractors and developers in the construction industry. There has been a particular focus on growing the business in the residential construction market, where hoard-it’s range of printed boards and panels are proving attractive to developers looking for a professional and promotional site image.
Revenue and Profit Before Tax
Group revenue increased by 19.7 per cent over the period to £47.15 million (H1 2018: £39.39 million). This increase has been as a result of growth across all of the Group’s businesses, in particular aided by the £41 million of new contract awards in November 2018.
Billington’s profit before tax for the period was £2.68 million (H1 2018: £1.94 million), an increase of 38.1 per cent.
Earnings per Share
Earnings per share for continued operations for the first half of the year increased by 39.1 per cent to 17.80 pence (H1 2018: 12.80 pence).
Liquidity and Capital Resources
The Group’s gross cash and cash equivalents as at 30 June 2019 was £10.01 million, an increase of 7.5 per cent on the balance as at 31 December 2018. The Company expects that its operations will remain cash generative in the second half further reinforcing its solid cash position.
The Group continued to invest across all its sites and business areas and capital expenditure modestly increased in the first half compared to the same period in 2018. The Group has in place long-term capital equipment replacement programmes and aims to be at the forefront of technological advances where they can add value.
A number of key items of machinery have been identified for replacement over the medium term and therefore a modest level of increase in the current level of capital expenditure is expected. Continuous investment in the Group’s capital assets will ensure that the products the Company produces are produced efficiently and of a quality our clients demand.
In the first half of 2019 Billington Holdings Plc declared a final dividend of 13.0 pence per share amounting to £1,565,000 (2018: 11.5 pence, £1,385,000) to its equity shareholders. No interim dividend for 2019 has been declared (2018: nil).
Market and Economic Outlook
The markets in which Billington operates remain unsettled, with a mixed environment for the main construction contractors. I am pleased to report that the Group has limited exposure to the more troubled larger contractors and we continue to assess the risks associated with individual projects on a case by case basis. To date we have been able to secure credit insurance on acceptable terms for all our significant projects.
Should the UK leave the European Union on 31 October 2019, the Group has plans in place to mitigate, as far as possible, the effects of any short-term disruption to supply and the fulfilment of European orders.
We continue to monitor the situation at British Steel with interest. It is currently envisaged that a successful sale will be completed imminently and this will assist in returning stability to the UK steel supply market. However, the Group continues to keep its steel supply options under review. The Group’s requirements for a wide range of steel products are sourced from a variety of worldwide producers and local stockholders to mitigate the associated risk.
Prospects and Outlook
The Group has had a very busy and successful first half of the year. Whilst the overall market continues to be uncertain, the outlook for Billington remains positive, particularly given the Group’s ability to target both the largest and medium contracts, insulating us, in part, from any temporary disruption in the market.
The Group has gained further large contracts during the first half that will be executed in the second half and into 2020. Our order book remains at strong levels and we continue to see a number of significant prospects and coupled with a healthy balance sheet we are well positioned for the future and remain cautiously optimistic.
In closing I would like to thank Billington’s Board, employees, shareholders and stakeholders for their continued support, and I look forward to a busy and bright second half of the year.
20 September 2019