Half Yearly Report

RNS Number : 0868O

Billington Holdings PLC

13 September 2011

 



Press Release                                                                                13 September 2011

Billington Holdings Plc

Billington Holdings Plc

("Billington" or "the Group")

 Interim Results

Billington Holdings Plc (AIM:BILN), one of the UK's leading structural steel and construction safety solutions specialists, today announces its interim results for the six months ended 30 June 2011.

	2011	2010
Revenue	£22.8 million	£21.3 million
(Loss)/profit before tax from continuing operations	(£0.6 million)	£1.1 million
Overall (loss)/profit for the half year	(£0.4 million)	£0.8 million
Cash and cash equivalents	£2.7 million	£6.9 million
(Loss)/earnings per share from continuing operations	(3.5 pence)	6.7 pence
Total dividend payment	0 pence	2.75 pence

Highlights

·     Results in line with expectations

·     Seven per cent increase on revenue growth, albeit at depressed margins, is an indicator of the Group's growing market share

·     Joint Venture with Bourne Steel to form BS2 enables the Group to bid for larger projects 

·     Acquisition of Marshall Steel Stairs, a complementary business with an excellent reputation

·     Sustained growth in 'easi-edge' and 'hoard-it' due to high utilisation of products and continued growth in market share.

Commenting on the results, Steve Fareham, Chief Executive of Billington Holdings, said:

"Throughout the first six months of 2011 the markets have remained challenging, but I am happy to say that we have managed to grow revenues, albeit at tight margins.  We have made a number of decisions, which we believe will position us well for the long term growth of the business, including the formation of BS2 and the acquisition of Peter Marshall Steel Stairs Limited.  The formation of BS2 was well received by the industry and will enable us to bid for bigger projects, whilst the acquisition of Peter Marshall was timely and complemented our own business.

"We are under no illusions, even though we expect margin pressures to ease in 2012; we realise that the construction market recovery will be a slow one.  We remain cautious going forward, whilst positioning ourselves for growth.  We have a strong balance sheet, the industry knowledge and relationships, to provide us with a degree of confidence in the current market conditions and look to 2012 with cautious optimism."

- Ends -

For further information please contact:

Billington Holdings plc                                                                                                Tel:       [phone]

Peter Hems
Executive Chairman

Steve Fareham
Chief Executive

Blythe Weigh Communications                                                                              Tel:      [phone]

Tim Blythe, Ana Ribeiro, Matthew Neal

Mobile: [phone]

WH Ireland                                                                                                                      Tel:     [phone] 
Katy Mitchell, Jessica Metcalf

Mobile: [phone] 394 6623

Chief Executive's Statement

Introduction

I am pleased to report results for Billington Holdings plc for the six months ended 30 June 2011 which are in line with market expectations. Trading conditions in the UK construction sector remain extremely challenging.

Results

Group revenue increased by seven per cent on the equivalent period in 2010, but operating profit has fallen from £1.1 million in 2010 to a loss of £0.6 million before taxation on continuing operations in 2011. Loss after taxation for the period was £0.4 million compared with a profit of £0.8 million in 2010, after taking account of discontinued operations.

Businesses

Structural Steel

Based in Barnsley and Bristol, Billington Structures Limited's ("Billington Structures") main business is the design, fabrication and erection of structural steelwork for a wide variety of sectors, including supermarkets, education, commercial buildings, waste and military establishments.

The protracted and difficult economic conditions in the UK remain, and, the directors believe that when combined with a capacity imbalance of steelwork contractors, this has resulted in margins remaining poor.

Billington Structures has been successful in winning a number of major contracts over the period, which has allowed both of its manufacturing facilities to operate at near maximum capacity. Continuing to maintain workload has been crucial and a number of new initiatives have been implemented in an effort to diversify into less competitive markets. A series of management changes have also been introduced, including the appointment of a sales director.

Tubecon, Billington Structure's specialist tubular and complex steelwork division, continues to make progress and has completed a number of contracts in the period, with further opportunities presenting themselves going forward. The division has been particularly successful in developing opportunities with customers and markets that are new to us.

Billington Structures has formally launched its joint venture, BS2 (2011) Limited ("BS2"), with Bourne Construction in order to offer the UK construction sector an alternative major steelwork contractor. The introduction of a third player into the large project environment seems to have been well received in the market and it is hoped it will yield opportunities in the very near future.

Acquisition

On 22 March 2010 Billington acquired the trade and assets of Peter Marshall (Fire Escapes) Limited (In administration).  These were placed into a wholly owned subsidiary, Peter Marshall Steel Stairs Limited. The acquisition represented a strategic move to acquire a complementary business with an excellent reputation in its market, and, with an influx of new orders, the facility remains busy.   

On 2 September 2011 Billington Holdings Plc exchanged contracts on the premises currently occupied by Peter Marshall with a view to completing the property acquisition in the near future. Acquiring the property demonstrates our ongoing commitment to the business.

Safety Solutions

Based in Tuxford, North Nottinghamshire, easi-edge Limited's ("easi-edge") main business is the design, logistics management and hire of patented safety barriers to the UK steel and timber frame construction industry. With an ever growing market share, the business has been less impacted by the downturn in the construction industry.  Utilisation of our hire equipment is running at an average rate of 90% year to date and has again necessitated a further programme of capital expenditure of new barriers, due to contracted commitments for the second half of the year.

Our 'hoard-it' site hoardings division, based in Wombwell, has seen a period of rapid expansion. The inherent benefits of the product are being increasingly recognised by many of the UK's largest contractors.

Earnings per Share

Loss per share from continuing operations was 3.5 pence in the period compared with earnings per share of 6.7 pence for the corresponding period in 2010. The corresponding figure for the whole of 2010 was 8.3 pence per share.

Dividend

The Directors have reluctantly decided, because of the current sustained difficult economic environment and a desire to maintain cash resources within the Group, not to pay an interim dividend at the current time (2010 - interim dividend of 2.75 pence per share).

Liquidity and Capital Resources

In the current climate of uncertainty for the construction industry generally, the Board considers that having a strong balance sheet with adequate cash resources enables the Group to be well placed to take advantage of the economic recovery.

The Group had a cash balance of £2.7 million at 30 June 2011, compared with £4.9 million at 31 December 2010 and £6.9 million at 30 June 2010. The net cash flow from operating activities during the period amounted to an outflow of £1.4 million, which was primarily attributable to an increase in the level of inventories and work in progress, net of a smaller related increase in trade and other payables, since 31 December 2010. The net cash flow from investing activities amounted to an outflow of £0.7 million; the majority of the capital expenditure related to additional products for easi-edge, but £98,000 was spent on acquiring assets for Peter Marshall.

Prospects

Prospects for the sectors in which we operate remain challenging.  We expect current margins on contracts to be slender throughout the remainder of 2011, however, there are signs of an improved market in 2012, and we would expect margins to show some recovery in 2012. 

The directors believe the number of business failures in the steelwork contracting sector remains relatively small, although with further increasing steel prices, recently announced, coupled with a harsh stance being taken by credit insurers, the directors believe there will inevitably be further casualties. Billington maintains a strong cash position and selectively and strategically evaluates any opportunities that arise.

The directors intend to capitalise on the continued progress of our hoard-it and Tubecon divisions by developing these products in order to increase the contribution they are making at Group level.

BS2, our joint venture, is gathering momentum following its official launch with keen interest being displayed from a number of leading developers. The Board remains positive that this unique and complementary initiative will continue to develop through the second half of 2011 and into 2012.

The directors believe Billington possesses the balance sheet, industry relationships and successful initiatives to enable it to progress through the difficult continuing economic environment and place the Group in the best position to take advantage of the inevitable but slow economic recovery.

Board and Employees

Finally, I would like to thank my colleagues on the board and all of our loyal employees for their loyalty and continued support through these unprecedented economic times.

Condensed consolidated interim income statement
Six months ended 30th June 2011
		Unaudited		Unaudited		Audited
		Six months		Six months		Twelve months
		to 30th June		to 30th June		to 31st December
		2011		2010		2010
		£000		£000		£000
Continuing operations
Revenue		22,768		21,306		42,295
Increase in work in progress		4,728		504		640
		27,496		21,810		42,935
Raw material and consumables		18,699		12,957		25,212
Other external charges		1,767		1,488		2,638
Staff costs		6,535		5,421		11,712
Depreciation		645		544		1,151
Other operating charges		411		286		879
		28,057		20,696		41,592
Operating (loss)/profit		(561)		1,114		1,343
Finance cost		0		(75)		(77)
Finance income		6		31		64
Other finance income		0		15		39
(Loss)/profit before taxation		(555)		1,085		1,369
Tax		145		(304)		(412)
(Loss)/profit for the period from continuing operations		(410)		781		957
Discontinued operations
Loss for the period from discontinued operations		0		(313)		(313)
Profit on disposal of discontinued operations		0		290		178
Loss for the period attributable to equity holders of the parent company		(410)		758		822
(Loss)/earnings per share (basic and diluted) from continuing operations		(3.5 p)		6.7 p		8.3 p
Loss per share (basic and diluted) from discontinued operations		0.0 p		(2.7 p)		(2.7 p)
(Loss)/earnings per share (basic and diluted) from continuing and discontinued operations		(3.5 p)		6.5 p		7.1 p
Dividends per share		0.00 p		2.75 p		2.75 p
Earnings per ordinary share have been calculated on the basis of the result for the period after tax, divided by the weighted average number of ordinary shares in issue in the period, excluding those held in the ESOP Trust, of 11,587,408. The comparatives are calculated by reference to the weighted average number of ordinary shares in issue which were 11,587,408 for the period to 30 June 2010 and 11,586,616 for the year ended 31 December 2010.

Condensed consolidated interim balance sheet
As at 30th June 2011
	Unaudited		Unaudited		Audited
	Six months		Six months		Twelve months
	to 30th June		to 30th June		to 31st December
	2011		2010		2010
	£000		£000		£000
Assets
Non current assets
Property, plant and equipment	8,801		8,087		8,712
Pension assets	371		0		371
Deferred tax assets	465		707		320
Total non current assets	9,637		8,794		9,403
Current assets
Inventories and work in progress	11,415		6,319		6,533
Trade and other receivables	4,226		5,450		3,246
Current tax receivable	24		0		151
Cash and cash equivalents	2,707		6,939		4,854
Total current assets	18,372		18,708		14,784
Total assets	28,009		27,502		24,187
Liabilities
Current liabilities
Trade and other payables	13,802		12,535		9,570
Current tax payable	0		158		0
Total current liabilities	13,802		12,693		9,570
Non current liabilities
Pension liabilities	0		150		0
Total non current liabilities	0		150		0
Total liabilities	13,802		12,843		9,570
Net assets	14,207		14,659		14,617
Equity
Called up share capital	1,293		1,293		1,293
Share premium	1,864		1,864		1,864
Capital redemption reserve	132		132		132
Other reserve	(902)		(901)		(902)
Accumulated profits	11,820		12,271		12,230
Total equity	14,207		14,659		14,617

Condensed consolidated interim statement of comprehensive income
Six months ended 30th June 2011
		Unaudited		Unaudited		Audited
		Six months		Six months		Twelve months
		to 30th June		to 30th June		to 31st December
		2011		2010		2010
		£000		£000		£000
(Loss)/profit for the period		(410)		758		822
Other comprehensive income
	Actuarial gain recognised in the pension scheme	0		0		172
	Movement on deferred tax relating to pension liability	0		0		(149)
	Current tax relating to pension liability	0		0		100
Other comprehensive income, net of tax		0		0		123
Total comprehensive income for the period attributable to equity holders of the parent company		(410)		758		945
Note
	Actuarial gain recognised in the pension scheme
	Actual return less expected return on pension scheme assets	0		0		388
	Experience gains and losses arising on the scheme liabilities	0		0		7
	Changes in assumptions underlying the present value of the scheme liabilities	0		0		(223)
		0		0		172

Condensed consolidated interim statement of changes in equity
(Unaudited)		Share	Share	Capital	Other	Profit	Total
		Capital	Premium	Redemption	Reserve	& Loss	Equity
			Account	Reserve	(ESOP)	Account
		£000	£000	£000	£000	£000	£000
	Balance at 1st January 2010	1,293	1,864	132	(901)	12,386	14,774
	Dividends	0	0	0	0	(873)	(873)
	Transactions with owners	0	0	0	0	(873)	(873)
	Profit for the six months to 30th June 2010	0	0	0	0	758	758
	Total comprehensive income for the period	0	0	0	0	758	758
	Balance at 30th June 2010	1,293	1,864	132	(901)	12,271	14,659
	Balance at 1st July 2010	1,293	1,864	132	(901)	12,271	14,659
	Dividends	0	0	0	0	(228)	(228)
	ESOP movement in period	0	0	0	(1)	0	(1)
	Transactions with owners	0	0	0	(1)	(228)	(229)
	Profit for the six months to 31st December 2010	0	0	0	0	64	64
	Other comprehensive income
	Actuarial loss recognised in the pension schemes	0	0	0	0	172	172
	Income tax relating to components of other comprehensive income	0	0	0	0	(49)	(49)
	Total comprehensive income for the period	0	0	0	0	187	187
	Balance at 31st December 2010	1,293	1,864	132	(902)	12,230	14,617
	Balance at 1st January 2011	1,293	1,864	132	(902)	12,230	14,617
	Transactions with owners	0	0	0	0	0	0
	Loss for the six months to 30th June 2011	0	0	0	0	(410)	(410)
	Total comprehensive income for the period	0	0	0	0	(410)	(410)
	Balance at 30th June 2011	1,293	1,864	132	(902)	11,820	14,207

Condensed consolidated interim cash flow statement
Six months ended 30th June 2011
		Unaudited		Unaudited		Audited
		Six months		Six months		Twelve months
		to 30th June		to 30th June		to 31st December
		2011		2010		2010
		£000		£000		£000
Cash flows from operating activities
(Loss)/profit after tax		(410)		758		822
Taxation received/(paid)		127		(826)		(943)
Interest received		6		31		64
Depreciation on property, plant and equipment		645		561		1,182
Difference between pension charge and cash contributions		0		3		(319)
Loss/(profit) on sale of property, plant and equipment		1		0		(7)
Taxation expense recognised in income statement		(145)		240		347
Finance (income)/cost		(6)		28		(26)
Increase in trade and other receivables		(980)		(2,835)		(631)
Increase in inventories and work in progress		(4,882)		(85)		(300)
Increase/(decrease) in trade and other payables		4,232		2,187		(689)
Profit on disposal of discontinued operations		0		(290)		(178)
Net cash flow from operating activities		(1,412)		(228)		(678)
Cash flows from investing activities
Interest paid		0		(74)		(77)
Purchase of property, plant and equipment		(738)		(545)		(1,817)
Proceeds from sale of property, plant and equipment		3		0		36
Net cash inflow from disposal of discontinued operations		0		171		4
Net cash flow from investing activities		(735)		(448)		(1,854)
Cash flows from financing activities
Equity dividends paid		0		(873)		(1,101)
Employee Share Ownership Plan share purchases		0		(3)		(3)
Employee Share Ownership Plan share sales		0		3		2
Net cash flow from financing activities		0		(873)		(1,102)
Net decrease in cash and cash equivalents		(2,147)		(1,549)		(3,634)
Cash and cash equivalents at beginning of period		4,854		8,488		8,488
Cash and cash equivalents at end of period		2,707		6,939		4,854

Segmental Reporting
As at 30th June 2011
	The continuing operations of Billington Holdings plc operate only in Structural Steel. The Structural Steel segment includes the activities of Billington Structures Limited, Peter Marshall Steel Stairs Limited and easi-edge Limited. The operations of Dosco Overseas Engineering Limited (previously Engineering) and Hollybank Engineering Limited (previously Structural Steel) are considered discontinued. The Group activities, comprising services and assets provided to Group companies and a small element of external property rentals and management charges, are considered incidental to the activities of Billington Structures Limited and have therefore not been shown as a separate operating segment but have been subsumed with Structural Steel. The comparative figures for 2009 have been adjusted accordingly. All assets of the continuing Group reside in the UK.
Basis of preparation
	These consolidated interim financial statements are for the six months ended 30 June 2011.  They have been prepared with regard to the requirements of IFRS. The financial information set out in these consolidated interim financial statements does not constitute statutory accounts as defined in S434 of the Companies Act 2006.  They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 December 2010 which contained an unqualified audit report and have been filed with the Registrar of Companies.  They did not contain statements under S498 of the Companies Act 2006.
	These consolidated interim financial statements have been prepared under the historical cost convention. The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these consolidated interim financial statements.
Dividends
	In the first half of 2011 Billington Holdings Plc declared a final dividend in respect of 2010 of nil pence amounting to £nil (2010 6.75 pence - £873,000) to its equity shareholders (including £nil paid to the ESOP). An interim dividend for 2011 of nil pence was declared amounting to £nil (2010 2.75 pence - £356,000).
	These results were approved by the Board of Directors on 12 September 2011.

Acquisition
On 22 March 2011, Peter Marshall Steel Stairs Limited, a wholly owned subsidiary of Billington Holdings Plc acquired the trade and assets of Peter Marshall (Fire Escapes) Limited (In Administration), a company based in the UK. The total cost of the acquisition, all of which was paid in cash, includes the components stated below.
Consideration
							£000
Payment to administrators							98
Total consideration transferred							98
The amounts recognised for each class of the acquiree's assets at the acquisition date are as follows:
							Recognised at acquisition date
							£000
Property, plant and equipment							90
Inventories and WIP							8
Total cost of acquisition							98
The acquisition of the trade and assets of Peter Marshall resulted in a reduction to equity holders of the parent company's profit after tax of £40,000 in the 15 weeks from 22 March 2011 to the reporting date.
The transaction to purchase the trading assets from the administrators was at arms length and from an unconnected third party. The value paid for the assets was believed to be equal to their respective market value and not materially different from the value in use to the company.
The intangible assets acquired consisted of the company's order book, customer list, branding and website development.  These elements in combination are not believed to attract a significant continued value to the new company, and as such no value has been attributed to these intangible assets.
Staff liabilities at inception of £55,000 were paid to employees and these have been expensed within the income statement in the period.
The Directors do not believe any goodwill or bargain purchase has arisen as part of the transaction to acquire the trading assets of Peter Marshall (Fire Escapes) Limited (In administration).

 

END

 

 

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