Interim Results

RNS Number : 3879D

Billington Holdings PLC

15 September 2008

 



Press Release

15 September 2008

Billington Holdings Plc

('Billington' or 'the Group')

Interim Results

Billington Holdings Plc, one of the UK's leading structural steel and engineering specialists, today announces its results for the six months ended 30 June 2008.  

Summary

●	Profit before tax on continuing operations up 31% to £2,319,000 (H1 2007: £1,763,000)
●	Structural Steel activities returned operating profits of £2,606,000 compared with £2,205,000 in the same period last year, which is broadly in line with expectations
●	Specialist Engineering shows an operating loss of £339,000 for this period as against a loss of £661,000 for the same period last year
●	The profit from discontinued activities amounts to £27,000 following the disposal of non-core operations
●	Earnings per share from continuing activities were 13.9 pence per share (H1 2007: 10.6 pence)
●	Proposed dividend of 3.75 pence per share (H1 2007: 3.5 pence)

Commenting on the results, Peter Hems, Executive Chairman of Billington Holdings Plc, said: 'We are delighted that the Group's restructuring has returned such favourable results in the past six months. The core businesses which we have chosen to focus on have profited from our emphasis on the public sector and in health and safety equipment. We are confident that the alteration in the business is already beginning to show a long term growth pattern.  

'The state of the UK economy and the construction sector in particular is a cause for some concern for us and for our competitors. However, Billington is in an excellent position to deliver shareholder value with a strong balance sheet and being one of the leading structural steel specialists in the UK. Our order book stands at £55 million which will see us through 2008 and well into 2009.'  

- Ends - 

For further information please contact:

Billington Holdings Plc
Peter Hems, Executive Chairman  Steve Fareham, Managing Director  [e-mail]	Tel: + 44 (0) 116 2575170  (Chairman's office)   [phone] (Billington) www.billington-holdings.plc.uk

Brewin Dolphin Investment Banking
Andrew Emmott	Tel: [phone]

Media enquiries:

Abchurch
Sarah Hollins / Chris Lane   [e-mail]	Tel: [phone]  www.abchurch-group.com

 Chairman's Statement

Introduction

I am pleased to report this first set of results for Billington Holdings Plc since the disposal of non-core operations on 11 April 2008.  The profit on ordinary activities before taxation from continuing operations shows an increase of 31% over the same period last year, which is impacted by a combination of improved results from the structural steel business and reduced losses on specialist engineering.  

Results

Profit on ordinary activities from continuing operations before taxation amounted to £2,319,000, which compares with £1,763,000 for the same period last year. Profits after taxation from continuing operations were £1,617,000 compared with £1,234,000 for last year.  

Structural Steel

The Group's structural steel activities returned operating profits of £2,606,000 which compared with £2,205,000 in the same period last year, which is broadly in line with our expectations. The structural steel activities comprise Billington Structures, Hollybank Engineering and easi-edge, the safety solutions business. Billington Structures, the award winning structural steel business, traded in line with expectations for the first half and has recently won additional work in the education sector.  

Billington Structures has a strong forward order book and the outlook for the current year is expected to be broadly in line with expectations. Hollybank is experiencing an increase in demand for its specialist steelwork for underground tunnels and it is anticipated that this will continue through into 2009. easi-edge, the innovative safety solutions business, has performed in line with expectations for the first half and current order levels indicate that the outcome for the full year will be in line with expectations. The Group continues to develop innovative safety solution products to meet customer demand and, as these are accepted by the market, they will increase the contribution that this business makes to group profit.  

Specialist Engineering

The Group's specialist engineering activity relates to the Dosco business which designs and manufactures underground tunnelling equipment for the worldwide mineral extraction industry.  Encouragingly, this division is showing an operating loss of £339,000 for this period as against a loss of £661,000 for the same period last year.  As we saw last year, the majority of orders are scheduled for delivery in the second half.  The order levels for the remainder of 2008 and 2009 are also very encouraging for this business.  

Discontinued Activities and Loss on Disposal

The profit from discontinued activities amounts to £27,000, which represents the profit after tax from non-core operations for the period up to the date of their disposal. This figure has been particularly impacted by a provision of some £1.3m against the carrying value of work in progress in relation to the property development activities, following the general downturn in the UK housing market. The loss on disposal for the period reflects the profit referred to above together with an accounting adjustment amounting to £181,000 to reflect the split of the Amco Group Pension Scheme. In addition, a reserve adjustment amounting to £437,000 has been made in the June 2008 accounts reflecting the split of the Amco ESOP.  

Pension Schemes and Total Recognised Gains

There were actuarial gains recognised in the pension schemes, which net of the taxation impact amounted to £509,000. Having regard to the profit for the period of £1,436,000 this resulted in total recognised income for the first half of £1,945,000.  

Earnings per Share

Earnings per share from continuing activities were 13.9 pence compared with 10.6 pence for the corresponding period in 2007. The corresponding figure for the whole of 2007 was 28.6 pence per share.  

Dividend

I am delighted to announce that the Directors intend to pay a dividend of 3.75 pence per share on 27 October 2008 to shareholders on the register on 26 September 2008.  

Liquidity and Capital Resources

The Group had a cash balance of £11,697,000 at 30 June 2008, after the £7,000,000 proceeds from the sale of non core operations (net of costs) received during the period, compared with £6,038,000 at 31 December 2007.  The cash outflow from operating activities for the period amounted to £1,414,000 which is mainly attributable to the timing of payments to suppliers around the year end. Cash flow movement for the comparable periods shows an operating cash inflow of £2,817,000 but reflects the pre-disposal group and is therefore not strictly comparable. In the current climate of uncertainty for the construction industry generally the Board considers that the current position of having a strong balance sheet underpinned by substantial cash represents a very important asset.  

Prospects

Current trading remains strong and the order book gives us confidence for the rest of 2008 and well into 2009. Enquiry levels and activity levels in the construction sector as a whole are concerning and we are more cautious on the outlook for 2009. However, as one of the leading players in its markets, Billington possess a balance sheet which provides a degree of security in the current difficult market conditions and also a platform for growth.  

Peter K Hems

Executive Chairman

15 September 2008

Condensed consolidated interim income statement  Six months ended 30th June 2008		Unaudited	Unaudited	Audited
		Six months	Six months	Twelve months
		to 30th June	to 30th June	to 31st December
		2008	2007	2007
		£'000	£'000	£'000
Continuing operations
Revenue		35,718	27,095	69,831
(Decrease)/increase in work in progress		(204)	948	317
Total revenue		35,514	28,043	70,148
Raw material and consumables		23,214	17,791	46,649
Other external charges		1,190	862	1,125
Staff costs		7,100	6,034	13,415
Depreciation		686	736	1,495
Other operating charges		1,065	1,270	2,621
		33,255	26,692	65,305
Total operating profit		2,259	1,351	4,843
Finance cost		(143)	(39)	(39)
Finance income		203	398	6
Other finance income		0	53	0
Profit on ordinary activities before taxation		2,319	1,763	4,810
Taxation on profit on ordinary activities		(702)	(529)	(1,496)
Profit for the period from continuing operations		1,617	1,234	3,314
Discontinued operations
Profit for the period from discontinued operations		27	360	1,130
Loss on disposal of discontinued operations		(208)	0	0
Loss on measurement to fair value less costs to sell of discontinued operations		0	0	(8,624)
Profit/(loss) for the period attributable to equity holders of the parent company		1,436	1,594	(4,180)
Earnings per share (basic and diluted) from continuing operations		13.9 p	10.6 p	28.6 p
Earnings per share (basic and diluted) from discontinued operations		0.2 p	3.1 p	9.7 p
Earnings/(loss) per share (basic and diluted) attributable to equity holders of the parent company		12.4 p	13.7 p	(36.0 p)
Dividends per share		3.75p	3.5 p	11.0 p

Condensed consolidated interim balance sheet at 30th June 2008	Unaudited	Unaudited	Audited
	30th  June	30th  June	31st December
	2008	2007	2007
	£'000	£'000	£'000
Assets
Non current assets
Property, plant and equipment	10,250	17,965	10,920
Investments in joint ventures	0	1,153	0
Deferred tax assets	1,725	2,956	1,748
Total non current assets	11,975	22,074	12,668
Current assets
Inventories and work in progress	9,099	25,207	8,385
Amounts recoverable on contracts	0	8,251	0
Trade and other receivables	6,412	11,187	4,812
Cash and cash equivalents	11,697	3,732	6,038
Total current assets	27,208	48,377	19,235
Assets included in disposal group classified as held for sale	0	0	57,224
Total assets	39,184	70,451	89,127
Liabilities
Current liabilities
Current portion of long term borrowings	0	2,196	0
Trade and other payables	17,261	35,164	19,252
Current tax payable	568	328	691
Total current liabilities	17,829	37,688	19,943
Liabilities included in disposal group classified as held for sale	0	0	48,824
Non current liabilities
Long term borrowings	0	4,335	0
Deferred tax liabilities	0	1,556	0
Pension liabilities	5,523	6,713	5,603
Total non current liabilities	5,523	12,604	5,603
Total liabilities	23,352	50,292	74,370
Net assets	15,832	20,159	14,757
Equity
Issued capital	1,293	1,293	1,293
Share premium	1,864	1,864	1,864
Capital redemption reserve	132	132	132
Other reserve	(873)	(1,268)	(1,310)
Profit and loss account	13,416	18,138	12,778
Shareholders' funds	15,832	20,159	14,757

Condensed consolidated interim statement of recognised income and expense		Unaudited	Unaudited	Audited
Six months ended 30th June 2008		Six months	Six months	Twelve months
		to 30th  June	to 30th  June	to 31st December
		2008	2007	2007
		£'000	£'000	£'000
	Actuarial gain recognised in the pension schemes (see note)	404	5,121	5,043
	Movement on deferred tax relating to pension liability	(23)	(1,669)	(2,114)
	Current tax relating to pension liability	128	131	489
Net income recognised directly in equity		509	3,583	3,418
Profit/(loss) for the period		1,436	1,594	(4,180)
Total recognised income and expense in the period attributable to equity holders		1,945	5,177	(762)
Note
	Actuarial gain/(loss) recognised in the pension schemes
	Actual return less expected return on pension scheme assets	(4,241)	683	(266)
	Experience gains and losses arising on the scheme liabilities	(1)	3	1,321
	Changes in assumptions underlying the present value of the scheme liabilities	4,646	4,435	3,988
		404	5,121	5,043

Condensed consolidated interim cash flow statement		Unaudited	Unaudited	Audited
Six months ended 30th June 2008		Six months	Six months	Twelve months
		to 30th June	to 30th June	to 31st December
		2008	2007	2007
		£'000	£'000	£'000
Cashflows from operating activities
Group profit/(loss) after tax		1,436	1,594	(4,180)
Adjustments for:
Profits from joint ventures		0	0	(5)
Depreciation on property, plant and equipment		686	1,630	3,432
Difference between pension charge and cash contributions		16	(388)	(1,490)
Profit on sale of property, plant and equipment		(28)	(46)	(122)
Taxation expense		702	683	1,263
Taxation paid		(699)	(759)	(1,475)
Finance cost/(income)		67	(413)	(55)
(Increase)/decrease in trade and other receivables		(200)	2,177	(5,505)
Increase in inventories and work in progress		(714)	(3,616)	(2,070)
(Decrease)/increase in trade and other payables		(2,861)	1,955	9,090
Loss on disposal of discontinued operations		181	0	0
Loss on measurement to fair value of disposal group		0	0	8,624
Net cashflow from operating activities		(1,414)	2,817	7,507
Cashflows from investing activities
Distributions from joint ventures		0	0	192
Net cashflow from returns on investments and servicing of finance		60	359	(84)
Purchase of property, plant and equipment		(362)	(990)	(1,249)
Proceeds from sale of property, plant and equipment		375	176	438
Net cash inflow from disposal of discontinued operations		7,000	0	0
Net cashflow from investing activities		7,073	(455)	(703)
Cashflows from financing activities
Equity dividends paid		0	0	(1,102)
Proceeds of bank and other loans		0	2,238	7,153
Repayment of bank and other loans		0	(2,158)	(3,187)
Inception of hire purchase agreements		0	587	0
Capital element of hire purchase payments		0	(848)	(1,786)
Employee Share Ownership Plan share purchases		(8)	(410)	(458)
Employee Share Ownership Plan share sales		8	11	17
Net cashflow from financing activities		0	(580)	637
Net increase in cash and cash equivalents		5,659	1,782	7,441
Cash and cash equivalents at beginning of period		6,038	1,950	1,950
Cash and cash equivalents at end of period		11,697	3,732	9,391
Cash and cash equivalents		11,697	3,732	6,038
Included within the disposal group		0	0	3,353
Total cash and cash equivalents		11,697	3,732	9,391

Notes to the accounts

1. Basis of preparation

The financial information for the six months ended 30th June 2008 and the comparative figures for the six months ended 30th June 2007 are unaudited and have been prepared on the basis of the accounting policies set out in the notes to the full year end statutory accounts as approved by the Board. This financial information does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. The financial statements for the year ended 31st December 2007, prepared under IFRS, received an unqualified audit report, did not contain statements under section 237 (2) of the Companies Act 1985 and have been delivered to the Registrar of Companies.

2. Earnings per share

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 11,603,408. The comparatives are calculated by reference to the weighted average number of ordinary shares in issue which were 11,639,183 for the period to 30 June 2007 and 11,598,808 for the year ended 31 December 2007.

3. Availability 

This statement is being sent to the shareholders of the Company and will be available at the Company's Registered Office at Steel House Barnsley Road, Wombwell Barnsley, South Yorkshire S73 8DS and will also be available on the Company website: www.billington-holdings.plc.uk. 

4. Segmental reporting		Unaudited		Unaudited		Audited
As at 30th June 2008		Six months		Six months		Twelve months
		to 30th June		to 30th June		to 31st December
		2008		2007		2007
		£'000		£'000		£'000
	Analysis of revenue
	Structural Steel	31,897		26,435		58,270
	Specialist Engineering	3,593		1,570		11,781
	Group	25		38		97
	Consolidated total	35,514		28,043		70,148
	Analysis of Group operating profit before finance income/cost
	Structural Steel	2,606		2,205		4,593
	Specialist Engineering	(339)		(661)		131
	Group	(8)		(193)		119
	Consolidated total	2,259		1,351		4,843
	Since the restructure of the Group on 11 April 2008 as detailed in the year end statutory accounts the Group's primary focus is now that of Structural Steel and Specialist Engineering as detailed above. The Group revenue is derived from external rent charges from Group properties.
5. Dividends
	In the first half of 2008 Billington Holdings Plc declared a final dividend in respect of 2007 of 7.5 pence amounting to £970,075 (2007 6.0p - £776,000)) to its equity shareholders (including £99,800 paid to the ESOP) An interim dividend for 2007 of 3.5pence amounting to £453,000 was declared and paid in the second half of 2007..

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 2007	1,293	1,864	132	(869)	14,642	17,062
	Changes in equity for first half of 2007
	Actuarial gain (net) on pension scheme	0	0	0	0	3,583	3,583
	Net income recognised directly in equity	0	0	0	0	3,583	3,583
	Profit for the six months to 30th June 2007	0	0	0	0	1,594	1,594
	Total recognised income and expense in the period	0	0	0	0	5,177	5,177
	Dividends	0	0	0	0	(696)	(696)
	ESOP movement in period	0	0	0	(399)	0	(399)
	Balance at 30th June 2007	1,293	1,864	132	(1,268)	19,123	21,144
	Changes in equity for second half of 2007
	Actuarial loss (net) on pension scheme	0	0	0	0	(165)	(165)
	Net income recognised directly in equity	0	0	0	0	(165)	(165)
	Profit for the six months to 31st December 2007	0	0	0	0	(5,774)	(5,774)
	Total recognised income and expense in the period	0	0	0	0	(5,939)	(5,939)
	Dividends	0	0	0	0	(406)	(406)
	ESOP movement in period	0	0	0	(42)	0	(42)
	Balance at 31st December 2007	1,293	1,864	132	(1,310)	12,778	14,757
	Changes in equity for first half of 2008
	Actuarial gain (net) on pension scheme	0	0	0	0	509	509
	Net income recognised directly in equity	0	0	0	0	509	509
	Profit for the six months to 30th June 2008	0	0	0	0	1,436	1,436
	Total recognised income and expense in the period	0	0	0	0	1,945	1,945
	Dividends	0	0	0	0	(870)	(870)
	Adjustment to ESOP in respect of discontinued activities	0	0	0	437	(437)	0
	ESOP movement in period	0	0	0	0	0	0
	Balance at 30th June 2008	1,293	1,864	132	(873)	13,416	15,832

 

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