Half Yearly Report

RNS Number : 6146S

Billington Holdings PLC

14 September 2010

 



Press Release                                                                                 14^th September  2010

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 safety solutions specialists, today announces its interim results for the six months ended 30 June  2010.

	2010	2009
Revenue	£21.3 million	£29.7 million
Profit before tax from continuing operations	£1.1 million	£2.6 million
Overall profit for the year	£0.8 million	£1.7 million
Cash and cash equivalents	£6.9 million	£8.6 million
Earnings per share from continuing operations	6.7 pence	16.2 pence
Total dividend payment	2.75 pence	3.25  pence

Highlights

·    Results in line with expectations

·    Dividend payment of 2.75 pence, reflecting the Group's commitment to maintain appropriate levels of dividend payment

·    Strategic development achieved through:

o   Launch of 'hoard-it' Safety Solutions, a sustainable site hoarding system, an area which has
    been less impacted by the downturn in the construction industry

o   Revival of specialist tubular steel division 'Tubecon', following increased enquiries for
    tubular steel structures

·   Production activity restored in recent months as a result of contract wins especially in the retail sector

·   Pension deficit reduced from £5.2 million to £0.2 million in May 2010 as a result of the disposal of non-core operations

Commenting on the results, Peter Hems, Executive Chairman of Billington Holdings, said: " I believe that our reputation for delivering contracts on time and on budget has been key to winning  recent contracts, albeit at lower margins than 2009.  We have further enhanced our product range with the launch of hoard-it, a unique hoarding system, and the revival of 'Tubecon', our specialised tubular steel division, both of which are less exposed to the economic cycles of the construction industry. We remain cautious going forward but possess the balance sheet, industry relationships and successful businesses to provide a degree of security in the current challenging market conditions and look to the future with confidence."

For further information please contact:

Billington Holdings plc                                                                        Tel:       [phone]

Peter Hems
Executive Chairman

Steve Fareham
Chief Executive

Blythe Weigh Communications                                                      Tel:      [phone] 
                                                                                                                      Mobile: [phone]

Tim Blythe, Ana Ribeiro, Matthew Neal

Brewin Dolphin Limited                                                                     Tel:     [phone]

Andrew Emmott

Chief Executive Statement  

Introduction

Against a background of challenging economic conditions for the UK construction industry, I am pleased to report results for Billington Holdings Plc for the six months ended 30 June 2010 broadly in line with expectations. 

Results

Group revenue fell by 28% and operating profit is showing a reduction of 57% over the same period last year.  Profit before taxation on continuing operations amounted to £1.1 million, which compares with £2.6 million for the same period last year.  Profit after taxation and after taking account of discontinued activities was £0.8 million compared with £1.7 million for the corresponding period last year. 

Businesses

Structural Steel

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

In 2010 a major replacement programme of CNC equipment has been undertaken at our Bristol plant which should lead to ongoing improving production efficiencies.

The profits shown in this period are supported by the positive results from contracts which were won in 2009 at higher margins than are currently being generated.

The company has been successful in winning a reasonable number of new contracts in the retail sector, and this along with other contracts helped restore production activity levels in recent months. However, the ongoing uncertain market conditions continue to impact on margins.

Safety Solutions

Based in Tuxford, North Nottinghamshire, easi-edge's main business is the design, logistics management and hire of patented safety barriers to the UK steel and concrete frame construction industry. With a small but ever growing market share, business at easi-edge has been less impacted by the downturn in the construction industry. Utilisation of our hire equipment is running at an average in excess of 90% year to date, necessitating a significant capital expenditure programme of new barrier production. It has achieved this utilisation by expanding its customer base and by further enhancements to its product range, including a solution for the timber frame industry.

Rapid expansion of its unique and sustainable site hoarding system, 'hoard-it', has necessitated a move to additional premises in Barnsley. 'hoard-it' has been particularly successful on supplying hoardings to major projects in inner city construction sites where the need to excavate in order to erect alternative systems is prohibitive.

Discontinued operations

The discontinued operations relate to the activities of Dosco Overseas Engineering and its subsidiary Hollybank Engineering which were disposed of on 4 May 2010.  The loss for the period of £0.3 million relates to the actual trading results of the two companies together with attributable pension contributions for the four month period prior to disposal.  The profit on disposal reflects the above trading result together with movements between provisions included in the previous accounts and the final balances together with a subsequently agreed adjustment to the price of £0.15 million to reflect the lower level of net assets than had been anticipated in the sale agreement.

Earnings per Share

Earnings per share from continuing operations were 6.7 pence compared with 16.2 pence for the corresponding period in 2009.  The corresponding figure for the whole of 2009 was 32.9 pence per share. 

 

Dividend

I am pleased to announce that the Directors intend to pay a dividend of  2.75   pence per share on 1 November 2010 to shareholders on the register on 1 October 2010.  This level of dividend follows the commitment given by the Group Board that it is its intention to maintain an appropriate level of dividend for 2010 broadly in line with that for 2009 notwithstanding the anticipated lower level of trading result.

Liquidity and Capital Resources

The Group had a cash balance of £6.9 million at 30 June 2010, compared with £8.5 million at 31 December 2009.  The cash outflow from operating activities during the period amounted to £0.3 million.  The cash outflow from investing activities amounted to £0.4 million; the majority of the capital expenditure was on new products for easi-edge.  The cash outflow from financing activities was £0.9 million which included the final dividend for 2009 paid during the period.  In the current climate of uncertainty for the construction industry generally the Board considers that having a strong balance sheet underpinned by substantial cash represents a very important asset. 

The reduction of the Group's pension deficit of £5.2m through the disposal of non-core operations in May 2010 provides the continuing Group with increased certainty of its future liabilities and cash flows.

Prospects

Prospects for the sectors in which the Group operate remain challenging for the foreseeable future.  The number and value of contracts being awarded remains well below that of recent years and as a result new work is only won on very competitive terms.  We expect that this will continue to have an adverse effect on our margins and working capital in 2010 and 2011.  The overall result for 2010 is likely to be in line with expectations, with the results for the second six months benefitting from a positive contribution from the final completion of contracts won in 2009.

We intend to continue to develop and support the 'easi-edge' and 'hoard-it' brands with a view to increasing the contribution to the Group. Furthermore, within Billington Structures I am pleased to announce the revival of our specialised tubular steel division 'Tubecon'. An increase in the number of enquiries for tubular steel structures has led to our decision to market, expand and source alternative types of specialist structural steelwork in the UK and hopefully the export market; this is being led by the recent recruitment of a chartered structural engineer as its general manager. We are also seeking other ways to add value and opportunity, including the formation of strategic alliances.

Billington possesses the balance sheet, industry relationships and successful businesses to provide a degree of security in the current challenging market conditions as well as a platform for long term growth. 

Board and Employees

I would take this opportunity to thank all our employees for their continued support.

Finally, I would like to thank Mike Speakman, a non-executive director of the Board, who retired in June. Mike has been a long term supporter of Billington and the Board wishes him a long and healthy retirement.

Steve Fareham

Chief Executive

14 September 2010

Condensed consolidated interim income statement
Six months ended 30th June 2010
			Unaudited		Unaudited		Audited
			Six months		Six months		Twelve months
			to 30th June		to 30th June		to 31st December
			2010		2009		2009
			£000		£000		£000
Continuing operations
Revenue			21,306		29,747		57,177
Increase/(decrease) in work in progress			504		(710)		(1,018)
			21,810		29,037		56,159
Raw material and consumables			12,957		17,804		33,075
Other external charges			1,488		1,239		1,554
Staff costs			5,421		6,212		13,429
Depreciation			544		596		1,124
Other operating charges			286		612		1,728
			20,696		26,463		50,910
Group operating profit			1,114		2,574		5,249
Finance cost			(75)		0		(1)
Finance income			31		56		100
Other finance income/(cost)			15		(10)		(9)
Profit before taxation			1,085		2,620		5,339
Tax			(304)		(740)		(1,524)
Profit for the period from continuing operations			781		1,880		3,815
Discontinued operations
Loss for the period from discontinued operations			(313)		(204)		(684)
Profit on disposal of discontinued operations			290		0		0
Loss on measurement to fair value less costs to sell of discontinued operations			0		0		(1,567)
Profit for the period attributable to equity holders of the parent company			758		1,676		1,564
Earnings per share (basic and diluted) from continuing operations			6.7 p		16.2 p		32.9 p
Loss per share (basic and diluted) from discontinued operations			(2.7 p)		(1.8 p)		(5.9 p)
Earnings per share (basic and diluted) from continuing and discontinued operations			6.5 p		14.5 p		13.5 p
Dividends per share			2.75 p		3.25 p		10.00 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 11,586,908 for the period to 30 June 2009 and 11,586,908 for the year ended 31 December 2009.

Condensed consolidated interim balance sheet
As at 30th June 2010
	Unaudited		Unaudited		Audited
	Six months		Six months		Twelve months
	to 30th June		to 30th June		to 31st    December
	2010		2009		2009
	£000		£000		£000
Assets
Non current assets
Property, plant and equipment	8,087		9,835		8,082
Deferred tax assets	707		2,129		707
Total non current assets	8,794		11,964		8,789
Current assets
Inventories and work in progress	6,319		12,563		5,668
Trade and other receivables	5,450		8,380		2,963
Cash and cash equivalents	6,939		8,637		8,488
Total current assets	18,708		29,580		17,119
Assets included in disposal group classified as held for sale	0		0		9,132
Total assets	27,502		41,544		35,040
Liabilities
Current liabilities
Trade and other payables	12,535		17,535		11,346
Current tax payable	158		824		1,199
Total current liabilities	12,693		18,359		12,545
Liabilities included in disposal group classified as held for sale	0		0		7,562
Non current liabilities
Pension liabilities	150		6,970		159
Total non current liabilities	150		6,970		159
Total liabilities	12,843		25,329		20,266
Net assets	14,659		16,215		14,774
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	(901)		(901)		(901)
Accumulated profits	12,271		13,827		12,386
Total equity	14,659		16,215		14,774

Condensed consolidated interim statement of comprehensive income
Six months ended 30th June 2010
		Unaudited		Unaudited		Audited
		Six months		Six months		Twelve months
		to 30th June		to 30th June		to 31st December
		2010		2009		2009
		£000		£000		£000
Profit for the period		758		1,676		1,564
Other comprehensive income
	Actuarial gain recognised in the pension schemes - continuing	0		0		59
	Actuarial loss recognised in the pension schemes - discontinued	0		0		(1,529)
	Movement on deferred tax relating to pension liability - continuing	0		0		(107)
	Movement on deferred tax relating to pension liability - discontinued	0		0		195
	Current tax relating to pension liability - continuing	0		0		91
	Current tax relating to pension liability - discontinued	0		0		234
Other comprehensive income, net of tax		0		0		(1,057)
Total comprehensive income for the period attributable to equity holders of the parent company		758		1,676		507
Note
	Actuarial gain/(loss) recognised in the pension schemes
	Actual return less expected return on pension scheme assets	0		0		3,546
	Experience gains and losses arising on the scheme liabilities	0		0		49
	Changes in assumptions underlying the present value of the scheme liabilities	0		0		(5,065)
		0		0		(1,470)

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 2009	1,293	1,864	132	(899)	13,153	15,543
	Dividends	0	0	0	0	(1,002)	(1,002)
	ESOP Movement in Period	0	0	0	(2)	0	(2)
	Transactions with owners	1,293	1,864	132	(901)	12,151	14,539
	Profit for the six months to 30th June 2009	0	0	0	0	1,676	1,676
	Other comprehensive income
	Actuarial gain recognised in the pension schemes	0	0	0	0	0	0
	Income tax relating to components of other comprehensive income	0	0	0	0	0	0
	Total comprehensive income for the period	0	0	0	0	1,676	1,676
	Balance at 30th June 2009	1,293	1,864	132	(901)	13,827	16,215
	Balance at 1st July 2009	1,293	1,864	132	(901)	13,827	16,215
	Dividends	0	0	0	0	(272)	(272)
	ESOP Movement in Period	0	0	0	0	0	0
	Transactions with owners	1,293	1,864	132	(901)	13,555	15,943
	Profit for the six months to 31st December 2009	0	0	0	0	(112)	(112)
	Other comprehensive income
	Actuarial loss recognised in the pension schemes	0	0	0	0	(1,470)	(1,470)
	Income tax relating to components of other comprehensive income	0	0	0	0	413	413
	Total comprehensive income for the period	0	0	0	0	(1,169)	(1,169)
	Balance at 31st December 2009	1,293	1,864	132	(901)	12,386	14,774
	Balance at 1st January 2010	1,293	1,864	132	(901)	12,386	14,774
	Dividends	0	0	0	0	(873)	(873)
	ESOP Movement in Period	0	0	0	0	0	0
	Transactions with owners	1,293	1,864	132	(901)	11,513	13,901
	Profit for the six months to 30th June 2010	0	0	0	0	758	758
	Other comprehensive income
	Actuarial gain recognised in the pension schemes	0	0	0	0	0	0
	Income tax relating to components of other comprehensive income	0	0	0	0	0	0
	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

Condensed consolidated interim cash flow statement
Six months ended 30th June 2010
		Unaudited		Unaudited		Audited
		Six months		Six months		Twelve      months
		to 30th June		to 30th June		to 31st           December
		2010		2009		2009
		£000		£000		£000
Cash flows from operating activities
Group profit after tax		758		1,676		1,564
Adjustments for:
Depreciation on property, plant and equipment		561		621		1,172
Difference between pension charge and cash contributions		(12)		(157)		(1,460)
(Loss)/profit on sale of property, plant and equipment		0		(3)		9
Taxation expense recognised in income statement		240		858		1,405
Taxation paid		(826)		(265)		(1,143)
Finance cost		29		116		201
(Increase)/decrease in trade and other receivables		(2,835)		3,769		3,375
(Increase)/decrease in inventories and work in progress		(85)		1,060		6,048
Increase/(decrease) in trade and other payables		2,187		(1,677)		(5,512)
Profit on disposal of discontinued operations		(290)		0		0
Loss on measurement to fair value of disposal group less costs to sell of discontinued operations		0		0		1,567
Net cash flow from operating activities		(273)		5,998		7,226
Cash flows from investing activities
Net interest (paid)/received		(29)		(116)		99
Purchase of property, plant and equipment		(545)		(391)		(1,719)
Proceeds from sale of property, plant and equipment		0		171		181
Net cash inflow from disposal of discontinued operations		171		0		0
Net cash flow from investing activities		(403)		(336)		(1,439)
Cash flows from financing activities
Equity dividends paid		(873)		(1,002)		(1,274)
Employee Share Ownership Plan share purchases		(3)		(2)		(2)
Employee Share Ownership Plan share sales		3		0		0
Net cash flow from financing activities		(873)		(1,004)		(1,276)
Net (decrease)/increase in cash and cash equivalents		(1,549)		4,658		4,511
Cash and cash equivalents at beginning of period		8,488		3,979		3,979
Cash and cash equivalents at end of period		6,939		8,637		8,490
Cash and cash equivalents of continuing Group		6,939		8,637		8,488
Included within the disposal group		0		0		2
Total cash and cash equivalents		6,939		8,637		8,490

Segmental Reporting
As at 30th June 2010
	The continuing operations of Billington Holdings plc operate only in Structural Steel. The Structural Steel segment includes the activities of Billington Structures 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.
		Unaudited		Unaudited		Audited
		Six months		Six months		Twelve       months
		to 30th          June		to 30th           June		to 31st         December
		2010		2009		2009
		£000		£000		£000
	Analysis of revenue
	Structural Steel	21,810		29,037		56,159
	Consolidated total	21,810		29,037		56,159
	Analysis of Group operating profit before finance income/(cost)
	Structural Steel	1,114		2,574		5,249
	Consolidated total	1,114		2,574		5,249
	Analysis of total Group assets
	Structural Steel	26,795		25,740		23,631
	Consolidated total	26,795		25,740		23,631
	Deferred tax	707		2,129		707
	Discontinued Operations	0		13,675		10,702
	Total Group assets	27,502		41,544		35,040

Basis of preparation
	These consolidated interim financial statements are for the six months ended 30 June 2010.  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 2009 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 2010 Billington Holdings Plc declared a final dividend in respect of 2009 of 6.75 pence amounting to £873,067 (2009 7.75 pence - £1,002,410) to its equity shareholders (including £90,951 paid to the ESOP). An interim dividend for 2009 of 3.25 pence amounting to £420,000 was declared and paid in the second half of 2009. These results were approved by the Board of Directors on 13th September 2010.  Copies of this interim report will be sent to all shareholders and will be available to the public from the Group's registered office and from the company's website: www.billington-holdgings.plc.uk

 

END

 

 

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