REG - Billington Holdings - Results for the year ended 31 December 2022
18/04/2023 07:00
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RNS Number : 4917W Billington Holdings PLC 18 April 2023
18 April 2023
Billington Holdings Plc
("Billington" or the "Company" or the "Group")
Results for the year ended 31 December 2022
Billington Holdings Plc (AIM: BILN), one of the UK's leading structural steel
and construction safety solutions specialists, is pleased to announce its
audited results for the year ended 31 December 2022.
Highlights
31 December 2022 31 December 2021 - underlying* 31 December 2021 - statutory Change - underlying
Revenue £86.6m £82.7m £82.7m 4.7%
EBITDA** £8.0m £3.3m £2.2m 142.4%
Profit before tax £5.8m £1.3m £0.2m 346.2%
Profit for the year £4.7m £1.0m £0.1m 370.0%
Cash and cash equivalents £11.6m £10.4m £10.4m 11.5%
Earnings per share 39.1p 8.1p 0.6p 382.7%
Dividend per share 15.5p 3.0p 3.0p 416.7%
* before an impairment charge of £1.1 million relating to a client with whom
the Company was completing a contract which entered administration shortly
after the 2021 year end.
** Earnings before interest, tax, depreciation and amortisation.
• Revenue increased by 4.7 per cent to £86.6 million (2021: £82.7 million)
• The Group achieved a significant increase in profits, with profit before tax
of £5.8 million (2021 - underlying: £1.3 million), reflective of larger
contracts in robust market sectors being completed in the year combined with
improved factory efficiencies
• Continuing strong cash balance of £11.6 million (31 December 2021: £10.4
million) at the year end
• Increased dividend declared of 15.5 pence per share (2021: 3.0 pence per
share) - covered 2.52 times by earnings. The proposed dividend represents the
largest ever dividend declared by the Company
• The market remains challenging, but significant contracts at improved margins
secured for 2023, with a good pipeline of further opportunities
• Retirement of John Gordon as a non-executive director with effect from
forthcoming AGM, following 18 years of service with the Company; replacement
recruitment process commenced
Mark Smith, Chief Executive Officer of Billington, commented:
"2022 has been a challenging yet rewarding year for the Group. The onset of
the Ukraine conflict presented significant challenges in terms of material
availability and raw material price escalation, and I am pleased at how these
issues were successfully navigated by our team.
Continued delivery across the Group of our capital investment programme has
shown significant efficiency gains. The resolution of some outstanding legacy
contracts, combined with the delivery of high quality, large contracts in
robust market sectors have all assisted in 2022 being a successful year for
Billington.
While being mindful of the uncertain economic outlook for the UK, we look
forward to the remainder of 2023 with a strong orderbook and a pipeline of
significant high quality prospects. We are confident in maintaining the
momentum from 2022 and delivering another strong performance for our
stakeholders, in line with current market expectations."
For further information please contact:
Billington Holdings Plc Tel: 0122 634 0666
Mark Smith, Chief Executive
Trevor Taylor, Chief Financial Officer
finnCap Limited - Nomad and Broker Tel: 020 7220 0500
Ed Frisby / Charlie Beeson - Corporate Finance
Andrew Burdis / Barney Hayward - ECM
IFC Advisory Limited Tel: 0203 934 6630
billington@investor-focus.co.uk
Tim Metcalfe
Graham Herring
Zach Cohen
About Billington Holdings Plc
Billington Holdings Plc (AIM: BILN), one of the UK's leading structural steel
and construction safety solutions specialists, is a UK based Group of
companies focused on structural steel and engineering activities throughout
the UK and European markets. Group companies pride themselves on the provision
of high technical and professional standards of service to niche markets with
emphasis on building strong, trusted and long-standing partnerships with all
of our clients. https://billington-holdings.plc.uk/
(https://billington-holdings.plc.uk/)
Investor Presentation
Billington's CEO, Mark Smith, and CFO, Trevor Taylor, will provide a live
presentation relating to the annual results via the Investor Meet Company
platform today, 18 April 2023 at 15.00 BST.
The presentation is open to all existing and potential shareholders. Questions
can be submitted via your Investor Meet Company dashboard at any time during
the live presentation.
Investors can sign up to Investor Meet Company for free and add to meet
Billington via:
https://www.investormeetcompany.com/billington-holdings-plc/register-investor
(https://protect-eu.mimecast.com/s/ym6WCxogUg927h8FoUy?domain=investormeetcompany.com)
Investors who already follow Billington on the Investor Meet Company platform
will automatically be invited.
The information contained within this announcement is deemed to constitute
inside information as stipulated under the retained EU law version of the
Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK
law by virtue of the European Union (Withdrawal) Act 2018. The information is
disclosed in accordance with the Company's obligations under Article 17 of the
UK MAR. Upon the publication of this announcement, this inside information is
now considered to be in the public domain.
Chairman's Statement
2022 was a year of significant progress and achievement for Billington, with
an excellent trading performance, despite continuing industry wide challenges
of material price increases along with restrictions in the availability of
certain products and some labour shortages arising throughout the period.
In 2022 revenue increased by 4.7 per cent to £86.6 million (2021: £82.7
million) with profit before tax increasing to £5.8 million (2021 -
underlying: £1.3 million), reflective of efficiency improvements implemented
across the Group, combined with the successful delivery of a number of large,
complex projects. The Basic Earnings Per Share ("EPS") for the year amounted
to 39.1 pence compared with 0.6 pence in 2021. Our balance sheet remained
strong with Net Assets of £34.3 million at 31 December 2022 (2021: £29.4
million), with a continuing strong gross cash balance of £11.6 million at 31
December 2022 (31 December 2021: £10.4 million), despite the continued
maintenance of significant levels of inventory and contract work in progress
at the year end.
Billington Structures enjoyed an improved performance in 2022, with the
results achieved being significantly ahead of our expectations at the start of
the year. The business operated at close to full capacity for much of the
year and whilst it continued to be impacted by continuing material price
inflation and volatility, coupled with material availability constraints as a
result of the conflict in Ukraine, the performance and outlook improved during
the course of the year. A number of larger than average contracts were
secured in the second half of the year at more attractive margins,
particularly in the data centre, energy from waste and industrials sectors.
These larger contract wins, coupled with the benefits being realised from the
Group's capital investment strategy and focus on efficiency improvements
enabled a significantly improved performance to be realised. The structural
steel businesses also benefited from the additional skilled labour recruited
from overseas that has provided further capacity for 2023 and beyond. The
prospects for the business in 2023 are encouraging, with a variety of higher
margin projects secured and a further healthy pipeline of opportunities
available.
Peter Marshall Steel Stairs continued the strong performance seen over the
past two years into 2022, again recording record revenues for the year and
operating at near full capacity. Whilst the business was impacted by steel
price increases, it retained robust margins, focusing on contracts where an
appropriate margin could be achieved. It currently enjoys a strong order
book both for projects being undertaken by Billington Structures and third
parties, with significant prospects to secure further business.
The Easi-Edge perimeter edge protection and fall prevention business continued
to see lower than pre-pandemic levels of utilisation as the commercial office
market remained subdued, although it remained a significant contributor to
Group profits. Easi-Edge continues to benefit from the significant
investment the Group made in the business prior to the pandemic and it is well
placed to take advantage of its market leading position as markets continue to
recover.
Hoard-it enjoyed an exceptional 2022, operating at full capacity for much of
the year, as it continued to take advantage of growing demand from tier one
and tier two contractors and adding to its product offerings. The positive
momentum has continued into the current year with a good pipeline of new
business for 2023 and plans to expand the business into areas of the UK
currently underserved.
In March 2022 the Group announced the formation of a new subsidiary,
Specialist Protective Coatings Ltd, focused on surface preparation and the
application of protective coatings for products across a variety of sectors
including rail, highways, defence, petrochemical, energy, structural steel and
infrastructure. The business was formed following the Company's acquisition
out of administration of the trading assets of Orrmac Coatings Limited, a
specialist painting company based in Sheffield, UK, in January 2022. The
acquisition presented an excellent opportunity to strengthen the Group's
internal offering in this area, as well as providing a specialist service to
the wider market. The business has made good progress since its formation
with significant capital expenditure to ensure that an exceptional quality
service is delivered for both internal Billington work and external
customers.
Billington has emerged from the Covid related market disruption as a stronger
and more efficient business, which continues to be supported by a healthy
balance sheet and a committed workforce. However, we are not immune to the
impacts of wider macroeconomic and global events. During 2022 the conflict
in Ukraine presented new challenges. Significant volumes of steel products
originate in Russia and Ukraine and with supplies restricted from these
regions, shortages, and as a consequence price increases, were experienced for
some of the Group's raw materials. However, alternative sources for these
products were quickly found and supply constraints had a lessening impact as
the year progressed.
The Group has secured a number of significant contracts for 2023 and is well
placed to take advantage of the significant number of further opportunities at
attractive margin levels that are currently being presented.
Pension Scheme
The defined benefit pension scheme (closed to future accrual in 2011)
continues in surplus despite the continuing volatile equity and bond markets
towards the latter part of 2022. In light of the continuing surplus,
measures have been taken to reduce the risk profile of the assets held by the
scheme. At 31 December 2022 a surplus of £2,174,000 (2021: £2,673,000)
along with a corresponding deferred tax liability of £544,000, has resulted
in a net recognised surplus of £1,630,000 (2021: £2,005,000).
The last actuarial valuation which also showed the scheme in surplus was
undertaken as at 31 March 2020 and the next scheme funding actuarial valuation
is due as at 31 March 2023, at which time the need for any Group contributions
will be reviewed.
Dividend
In the first half of 2022 Billington declared a final dividend in relation to
the year ended 31 December 2021 of 3.00 pence per share amounting to £0.4
million, which was 2.7 times covered by 2021 earnings. The Board feels it is
appropriate for Billington to continue to be dividend paying at a level that
reflects underlying earnings, whilst continuing to maintain a robust balance
sheet. The Board is therefore recommending an increased final dividend of
15.5 pence per share for 2022, which is covered 2.52 times by earnings. The
dividend declared is at the highest level in the Company's history.
The final dividend will be paid on 4 July 2023, subject to shareholder
approval at the Company's AGM on 6 June 2023. The associated ex-dividend date
will be 8 June 2023 with a record date of 9 June 2023. No interim dividend
for 2022 was declared (2021: nil), a policy consistent with prior years.
Liquidity and capital reserves
In 2022 the Group experienced a net cash inflow of £1.2 million (2021: £4.7
million net cash outflow) increasing the Group's gross cash and cash
equivalents as at 31 December 2022 to £11.6 million from £10.4 million as at
31 December 2021. The cash balance at 31 December 2022 reflected good cash
collection and certain modest customer pre-payments, offset by an increase in
inventories and contract work in progress by £4.7 million to £16.9 million
(31 December 2021 £12.2 million). The increase in inventories and contract
work in progress at the year end was reflective of several ongoing larger
contracts due for completion post period end.
During the year the Group temporarily utilised a proportion of its cash
resources to maximise the margin available on contracts via the stockpiling of
steel when appropriate to take advantage of attractive supply and pricing
opportunities. At the year end the amount of steel stockpiled by the Group
had returned closer to levels held historically for a similar level of
business.
Going forward the Group's cash continues to provide strong cover for its
working capital requirements and a robust position from which to take the
Group forward. Capital expenditure in 2022 increased as the Group continues
to invest in process improvements, together with the establishment of the
Specialist Protective Coatings business.
Board
John Gordon, a Non-executive Director, has notified the Company that he does
not wish to stand for re-election at the forthcoming Annual General Meeting,
having served as a Non-executive Director of Billington since 2007. John
will therefore leave the Board at the conclusion of the Annual General Meeting
to be held on 6 June 2023. I, on behalf of the Board, would like to thank
John for his substantial contribution to Billington and we wish him well in
his future endeavours.
The Board has commenced a process to find a suitable replacement non-executive
Director. Until an appointment is made Stephen Wardell will assume the
Chairmanship of the Company's Remuneration Committee.
Our People
The key to Billington's continued success is the hard work and dedication of
its workforce, and I would like to place on record my thanks to the whole
Billington team for their contribution in 2022.
However, the Group, in common with the wider industry, faces challenges in
recruiting sufficient skilled labour. Whilst the Group continues to train
and develop skilled labour locally, working in partnership with a number of
education providers, it has become necessary to recruit skilled labour from
overseas. In 2022 we welcomed 26 new staff members from overseas, who have
already provided a valuable contribution to the Group's capabilities and are
allowing us to service the demand we are seeing.
The Group remains committed to supporting its employees, particularly in a
time when rapid increases in the cost of living are being experienced and
continues to actively promote its apprenticeship and graduate schemes.
Economic Outlook
During the year iron ore and metallurgic coking coal prices continued to be
volatile, rising at the start of the year, before subsiding through the middle
and then returning to an upward trend at the end of the year, which has
continued into 2023. This, coupled with continuing high energy prices and
the impact of the conflict in Ukraine, has led to continued volatility and
inflationary pressures on steel prices, a situation that has remained post
period end. Whilst the Group operates many fixed price supply contracts and
has arrangements in place to mitigate some of the increases, we have suffered
continued escalation in the price of consumables and ancillary products, cost
increases which often cannot be passed on. We expect inflationary pressures
and the restrictions in the supply of certain steel products to continue for
some time, although we anticipate these pressures will ease as we move through
2023.
Post the Covid-19 related impact on the market, many of the sectors in which
Billington operates continue to see reduced levels of activity, particularly
large commercial office developments. However, other sectors such as large
distribution warehouses and industrial developments combined with energy from
waste and data centre facilities are considerably more active and have
returned to, or exceeded, pre-pandemic levels.
The UK structural steelwork market grew by 11.7 per cent in 2022, following a
16.9 per cent increase in 2021. Current forecasts are for the market to
contract slightly in 2023, with an overall decline of 3.0 per cent, before the
market stabilises with 0.5 per cent growth in 2024. However, these forecasts
are likely to be subject to revision as the impact of wider macroeconomic
factors are assessed.
With all our projects we are conscious that many of the main construction
contractors continue to operate under significant pressure. The Group
insures its exposures with the maximum available cover, in a challenging
credit insurance market, and continues to focus on projects with the more
robust larger contractors that can deliver an appropriate margin. We have
processes in place to assess the risks associated with individual projects on
a case-by-case basis to reduce and mitigate the associated risks where
possible.
Current trading and outlook
Billington is a robust business with a strong market position. Whilst there
inevitably remain further challenges ahead and macroeconomic headwinds are
likely to remain for some time, particularly with regard to material
availability, price volatility and continuing inflationary pressures, we are
seeing a consistent stream of opportunities at improved margins and have a
very healthy order book.
The Group's capital investment programme and efficiency improvements
implemented are enabling us to achieve improved margins on opportunities we
are seeing and I believe Billington is well placed to deliver improved results
in 2023.
In closing, I would like to thank Billington's Board, employees, shareholders
and all stakeholders for their continued support.
Ian Lawson
Non-Executive Chairman
17 April 2023
Chief Executive Statement
Operational Review
2022 saw a further recovery in the market following the Covid-19 pandemic,
although there continued to be an impact from the turbulent and inflationary
macroeconomic environment, exacerbated by the conflict in Ukraine. Against
this background, the Group's revenue increased by 4.7 per cent to £86.6
million for the year (2021: £82.7 million).
During the period as margin pressure remained across the industry, the Group
successfully secured a number of significant contracts at improved margin
levels and has a very healthy pipeline of current and potential business.
The Group achieved a significant increase in profits, ahead of our
expectations at the start of the year, despite these continuing challenging
market conditions, with profit before tax of £5.8 million (2021 - underlying:
£1.3 million), in particular showing the benefit of significant efficiency
improvements implemented across the Group in recent times.
Whilst we are mindful of the continuing volatile macroeconomic environment,
coupled with supply constraints on materials and labour, we anticipate a
further improvement in performance during 2023. Beyond the current year the
market is more unpredictable, however Billington has emerged from the pandemic
as a stronger and more efficient business, which continues to be supported by
a healthy balance sheet and a committed workforce. I believe we can remain
resilient to any challenges presented and the Group is well placed to take
advantage of the significant number of opportunities at more attractive margin
levels that are currently being seen.
Group Companies
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 10,000
tonnes. With two facilities in Barnsley and a further facility in Bristol
and a heritage dating back over 75 years, the business is well recognised and
respected in the industry with the capacity to process over 50,000 tonnes of
steel per annum.
The Shafton facility operates in two distinct business areas. The first
undertakes activities for Billington Structures. The second, Shafton Steel
Services, offers a complete range of steel profiling services to many diverse
external engineering and construction companies, providing further
opportunities for growth as well as allowing for the supply of value added,
complementary products and services enhancing the comprehensive offering of
the Group.
During the year the Group's structural steel businesses continued to operate
at near full capacity, although a number of projects continued to be subject
to delays and timetable movements. Many of the projects undertaken in the
first half of the year, as in 2021, continued to be in areas, such as large
distribution warehouses, which have a larger steel content per man hour than
more complex projects such as commercial offices, and as such attracted a
lower, albeit positive margin. The business was also impacted by continuing
material price inflation and volatility, coupled with material availability
constraints as a result of the conflict in Ukraine.
During the first half of the year the margins achieved were also impacted by a
number of legacy contracts following the Covid-19 pandemic. However, a
number of larger than average contracts were secured and delivered in the
second half of the year at improved margins, particularly in the data centre,
energy from waste and industrials sectors. These larger contract wins,
coupled with the benefits being realised from the Group's capital investment
strategy and focus on efficiency improvements enabled a significantly improved
performance to be realised in the second half. The structural steel
businesses also benefited from the additional skilled labour recruited from
overseas.
The larger projects undertaken by Billington Structures during 2022 included:
• Shepperton Film Studios - London
• Sandwell Aquatics Centre - Birmingham
• Magna Park Industrial Units - Lutterworth
• Wakefield Trinity RUFC Stadium - Wakefield
• Segro Industrial Unit - Coventry
It is pleasing to note that some of the Company's complex and challenging
projects were again recognised in some of the industry's prestigious awards.
Newhurst Energy from Waste development was the winner of the 2022 Tekla,
industrials category award.
Billington Structures has a strong order book for 2023 and is seeing
additional significant future project opportunities at stable margins. This
includes more complex projects, such as large industrial warehousing, stadia,
film studios and renewable energy infrastructure. Whilst the detailed timing
of certain specific projects remains subject to change, and a number of
potentially significant contracts have yet to be secured, the future prospects
for Billington Structures are encouraging.
Specialist Protective Coatings
In March 2022 the Group announced the formation of a new subsidiary,
Specialist Protective Coatings Ltd ("SPC" or "Specialist Protective
Coatings"), focused on surface preparation and the application of protective
coatings for products across a variety of sectors including rail, highways,
defence, petrochemical, energy, structural steel and infrastructure. The
business was formed following the Company's acquisition out of administration
of the trading assets of Orrmac Coatings Ltd ("Orrmac Coatings"), a specialist
painting company based in Sheffield, UK, in January 2022.
The Group had been seeking to expand its painting capabilities for some time
and the acquisition presented an excellent opportunity to strengthen the
Group's internal offering in this area, as well as providing a specialist
service to the wider market. Since Billington acquired the trading assets of
Orrmac Coatings, based in a 55,000 square foot facility in Sheffield, it has
undergone a substantial refurbishment and an investment programme to ensure
the facility is able to effectively service the most demanding of projects,
including shotblasting and lifting capabilities for steel assemblies that are
amongst the largest in the UK.
The business has made good progress since its formation, servicing both
internal Billington work and external customers. In particular, the benefits
of the newly installed equipment, which was operational from November 2022, is
enabling the business to focus on maximising margin from its opportunities.
A second shift is also being implemented at SPC to maximise the ability to
service the demand being experienced. This demand is expected to increase in
2023 as a number of historic competitors have exited the market.
In addition, the Group established a dedicated on-site painting service to
enable SPC to be a one-stop-shop for the painting requirements of the
structural steel sector. This service has seen significant demand and
further expansion in the number of on-site painting teams is expected in 2023.
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,
data, commercial offices, education, healthcare, rail and many more.
Peter Marshall Steel Stairs continued its strong performance during the year,
again recording record revenue and maintaining robust margins, undertaking
substantial work as part of contracts with Billington Structures and for third
parties. The business operated at near full capacity during the year and
whilst there was an impact from increased steel prices, strong margins were
maintained.
Contracts were secured from a variety of sectors, with particularly strong
demand from projects in the leisure, data centre and industrial warehousing
sectors.
Notable projects undertaken in 2022 included:
• Cherry Park Residential Development - Stratford
• Siemens Wind Turbine Blade Facility - Hull
• KLON2 Data Centre - Harlow
• HH4 Data Centre Ph2 - Hemel Hempstead
Peter Marshall Steel Stairs enjoys a secure market position, as one of the
largest companies in its sector, in what is a fragmented market. The outlook
for the business continues to be very positive, with a strong order book for
the remainder of 2023, comprising both projects being undertaken by Billington
Structures and third parties. Additional skilled labour has been secured
from overseas to ensure the business has the capability and capacity to fulfil
this demand.
Easi-Edge
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.
Easi-Edge continued to see lower than pre-pandemic levels of utilisation as
the commercial office market, a sector that requires a greater amount of
product when compared to most other types of projects, such as distribution
warehouses, remained subdued. However, the business remained a significant
contributor to Group profits and benefited from historic investment in its
product.
Easi-Edge continues to take advantage of its market leading position, securing
opportunities in those market sectors where new developments are being
undertaken and it is anticipated that activity for the remainder of 2023 will
be similar to that achieved in 2022.
Significant projects undertaken by Easi-Edge in 2022 included:
• Deyes High School - Manchester
• Aintree Fire Training Facility - Liverpool
• Mynydd School - Mold
• Lancashire Cricket Ground Hotel - Manchester
Hoard-it
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. An expanded graphics
solution, Brand-it, was introduced in 2021, which is being utilised on both
Hoard-it's own product and on those produced by others. Brand-it's site
graphics solutions enable site perimeter hoarding to be a prime marketing tool
with added functionality such as anti-graffiti and anti-climbing coatings.
Brand-it is a continuation of the desire to increase the product range of the
company with high quality, higher margin products to its clients.
Hoard-it had an exceptional 2022, outperforming management's expectations and
operating at full capacity for much of the year. It continued to take
advantage of its industry leading position and growing demand from tier one
and tier two contractors, together with further adding to its product
offering. The Brand-it graphics solution has enabled the business to
diversify into residential developments and during the year Hoard-it secured
its largest ever order of over £0.5 million for a large mixed-use development
in Kent.
Other significant projects were undertaken for both new and existing
customers, as the client base expanded in line with the goal of ensuring the
Hoard-it system becomes the number one choice for main contractors and
developers in the built environment. Hoard-it particularly benefited from
the Group's investment in stock levels in advance of anticipated demand,
enabling rapid deployment of its solutions and providing a degree of
mitigation for inflationary pressures on its materials to ensure margins were
protected.
Notable projects in 2022 undertaken by Hoard-it included:
• Mixed Used Residential and Leisure Scheme - 2,500 linear meters - Hythe
• Wigan Galleries project - 700 linear meters - Wigan
• Coundon Secondary School - 650 linear meters - Coventry
The positive momentum has continued into the current year with a good pipeline
of new business for 2023 and plans to expand the business geographically into
areas of the UK currently underserved.
Our People
Billington, alongside the wider steel industry has struggled with the
recruitment of sufficient skilled UK production and technical labour at its
facilities in recent years, resulting in reduced capacity and under recovery
of its overheads. In order to address these issues the Group has both
continued to train and develop skilled labour locally and has recruited
skilled labour from overseas.
Close relationships are being maintained with a number of local education
providers, with continuing support being provided to both Barnsley College and
the University of Sheffield Engineering Department. The Company regularly
attends educational career days, hosts school visits to its sites and seeks to
develop talent from a young age with its range of internal training programmes
across all departments of the business.
Billington remains in partnership with Betterweld, a specialist training
provider, to provide fabrication/welding training at an external facility
before being employed by the Group. This partnership provides access to
increased numbers of direct personnel on a consistent basis at its two
Barnsley based facilities through a structured training and development
programme.
We continue to actively promote the company's apprenticeship and graduate
schemes in other areas, particularly focusing on technical staff.
Additionally, Billington continues as an advocate, promotor and contributor to
the British Constructional Steelwork Association's CRAFT apprentice
programme. The scheme has become an important path for the Group to train,
educate and progress structural steelwork fabricators.
Despite the continuing programmes to develop skilled personnel locally, it has
become necessary for the Group to recruit skilled labour from overseas in
order to meet the shortfall in available skilled personnel and increase the
production capacities of the Company. In 2022 a total of 26 staff members
were recruited from overseas. These highly skilled fabricators, welders and
technical staff, have already proved to be a strong asset for the business,
being deployed in Billington Structures, Shafton Steel Services, Peter
Marshall Steel Stairs and Group services.
Average staff numbers in 2022 increased by 8.3 per cent, with 415 employed at
the year end. We anticipate a further modest increase in staff numbers in
2023.
Health, Safety, Sustainability, Quality and the Environment
A commitment to health, safety, sustainability, quality and the environment is
core to everything that Billington does.
Across the Group, led by our Health and Safety department, we work to ensure
that continued progress can be achieved in enhancing working practices and
improving the safety culture at all the Group's facilities and in our on-site
activities. The Group aims to be proactive in the identification, reporting
and resolution of risks both on site and in our production facilities to
ensure that we are able mitigate the risks and promote safe ways of working.
We are also actively involved in a number of initiatives both locally and
nationwide to ensure the safety of our and others staff.
2023 will see the roll out of a behavioural safety programme across all Group
facilities to further enhance the safety culture and eliminate all avoidable
accidents.
Minimising the impact of our operations on the environment remains a strong
focus. The Group has implemented a number of initiatives aimed at reducing
the carbon footprint of our activities. All new energy contracts being
entered into by Group companies are "green" tariffs that include carbon
offsetting and the Group is investigating the installation of wind turbines
and solar power where possible at its facilities. We are also focused on
reducing energy usage where possible, altering or replacing machinery where
appropriate, and utilising hybrid, electric and biofuel vehicles.
The Group implemented a formal ESG committee in 2021 and significant progress
has been made to investigate, benchmark and develop a roadmap for carbon
reduction initiatives associated with the activities of the Company. Steel
Zero, a commitment to become carbon neutral and employ a responsible steel
sourcing strategy was joined in the year as part of the Group's journey to be
a leader in driving carbon reduction initiatives.
The Group's primary requirement for energy comes from electricity, as opposed
to gas, and a large proportion of the Group's four-year fixed energy price
contracts end in 2023. On renewal there will be an increase in Group costs,
but the price of long term electricity supply contracts is reducing and the
impact on Group profitability will be significantly less than that caused by
material price increases.
The Group is also conscious of other environmental impacts from its operations
and is seeking to reduce these as far as possible. Weld fume extraction is
one area of particular focus and covered by extensive legislation.
Approximately £400,000 has been invested in this area to ensure the Group
meets current and expected future legislative requirements, together with
ensuring the safety and wellbeing of its staff and the wider community.
Charity
In 2017 the Billington Charity Foundation was established and Billington
continues to be a significant advocate and supporter of both local and
national charities.
Throughout 2022, Billington donated to charities including Macmillian,
Trussell Trust, Andy's Man Club and Weston Park Cancer Charity, together with
a range of local sports teams and other causes that our employees are involved
with. The Group actively encourages involvement in initiatives intended to
improve the local areas in which our people live.
Customers and Suppliers - Ethical Trading
The Company recognises the need to maintain a supply chain that adheres to and
is aligned with our environmental, social and commercial objectives and
policies.
Billington is committed to carrying out all dealings with clients, suppliers,
sub-contractors and its own staff in a fair, open and honest manner. It is
also committed to complying with all legislative and regulatory requirements
that are relevant to its business activities and monitors these on a regular
basis.
The Company communicates fully and openly with customers regarding costs of
work undertaken and will provide accurate and honest guidance and advice to
customers to ensure their requirements are met.
The Company strives to develop positive relationships with suppliers to ensure
both parties understand each other's problems and requirements. It will not
use current or potential contracts to coerce suppliers into unsustainable
offers.
The Company treats its staff fairly in all aspects of their employment,
valuing their contribution to the achievement of Company objectives and
providing them with opportunities for training and development.
The Company is proud of its long standing and committed partner relationships
with its supply chain and in turn seeks to treat them fairly with timely
payment for works and the implementation of a 'no retention' policy.
Steel Industry
Following the significant increases in steel prices experienced in 2020
(approximately 40%) and 2021 (approximately 60%) as a result of the
fluctuating cost of steelmaking raw materials combined with escalating energy
prices, 2022 was a period of further significant volatility. The onset of
the conflict in Ukraine in early 2022 led to a restriction in the availability
of some raw materials used in the steel making process and of some steel
products, particularly plate, leading to further price escalation. The
Company sought to protect itself against the plate shortage through directly
importing material into the UK and temporarily utilising its cash resources to
maintain certainty of price and availability.
From March to October 2022 a reduction in steel prices was experienced, before
further price rises in the later part of the year. Additional price
increases have been noted in early 2023, although the Group expects a more
stable price outlook in 2023 when compared to the last three years.
Billington keeps its steel supply options under constant review and employs a
variety of measures to allow the Company to reduce its exposure to volatility
in steel prices and any variability in supply over the short term. This
hedging strategy, coupled with the stockpiling undertaken when considered
appropriate, enables most projects principal pricing risk to be covered,
mitigating the immediate impact. Although, over the longer-term, price rises
are passed onto customers as far as possible. The Group also continually
reviews its steel procurement strategy in order to reduce its reliance on any
one supplier as far as possible.
Strategy and Acquisition
The Group has continued its strategy of improving operating margins through
the investment and upgrading of some principal items of capital equipment,
combined with projects to increase the capacity from the Company's fixed asset
base. The benefits of this strategy have been seen in the improved operating
margins achieved in 2022 and the Group will continue to invest to ensure the
Group maximises the inherent value within the business and capitalises upon
its strong market position within the industry.
In 2022 we established a new trading subsidiary, Specialist Protective
Coatings, following the Company's acquisition of the trading assets of Orrmac
Coatings out of administration. The establishment of Specialist Protective
Coatings and the investment we have made in the business during the year,
including setting up a dedicated on-site painting service, is already
providing the Group with increased control of a significant subcontract trade
that had previously been outsourced and is ensuring the margin associated with
this trade is maintained within the business. We will continue to invest in
this area in order to grow capacity and be able to service the demand we are
seeing.
Prospects and Outlook
The first half of 2022 was a period of stabilisation and continued recovery
following the Covid-19 related disruption to the market, with a number of
lower margin legacy contracts being completed, before a significant
improvement in the Group's trading performance in the second half of the year
as higher margin contracts were delivered.
Whilst macroeconomic headwinds are likely to remain for some time,
particularly with regard to material availability, energy costs, price
volatility and continuing inflationary pressures, we are seeing a consistent
stream of opportunities at more attractive margins and have a very healthy
order book. The benefits of the Group's investment in efficiency
improvements and people, coupled with its strong market position, is enabling
the Group to achieve higher than historic margins and to focus on those
sectors that can deliver better returns.
Contracts secured in 2022 for two energy from waste facilities and a number of
large industrial production / warehousing projects are good examples of the
type of business we are managing to secure. We are also seeing other
opportunities particularly in large retail distribution warehouses, data
centres, 'Gigafactories', food processing developments, public sector works,
rail infrastructure and stadium developments, together with a return of some
commercial office development projects and for projects outside of the UK.
I would like to thank my Board colleagues and all of Billington's staff for
their hard work and dedication, and our shareholders and other stakeholders
for their continued support.
Supported by a robust balance sheet I believe Billington is well placed for
the future, and I expect to see a further improvement in financial
performance in 2023.
Mark Smith
Chief Executive Officer
17 April 2023
Financial Review
Consolidated Income Statement
Underlying Non Underlying Total
2022 2021 2021 2021
£'000 £'000 £'000 £'000
Revenue 86,614 82,720 - 87,720
Operating profit/(loss) 5,911 1,339 (1,123) 216
Profit/(loss) before tax 5,829 1,302 (1,123) 179
Profit/(loss) after tax 4,734 978 (910) 68
Profit/(loss) for shareholders 4,734 978 (910) 68
Operating profit margin 6.8% 1.6% - 0.3%
Return on capital employed* 29.7% 8.4% - 1.4%
Earnings/(loss) per share (basic) 39.1p 8.1p (7.5p) 0.6p
*Operating profit divided by total equity less the net defined benefit pension
surplus and net cash.
Revenue increased 4.7 per cent year on year as a result of increased output
across both trading segments of the Group. Structural Steel output increased
2.7 per cent and output related to Safety Solutions increased 21.4 per cent,
primarily related to additional site hoarding provided through Hoard-it.
Forecasts indicate that the consumption of structural steelwork within the UK
increased to 894,000 tonnes in 2022 from 801,000 tonnes in 2021, an increase
of 12 per cent. Projections indicate that consumption will reduce by 3 per
cent to 867,000 tonnes in 2023 before returning to growth with a forecast 0.5
per cent increase to 871,000 tonnes in 2024. The UK market outlook and the
forecast severity and duration of a recessionary period is now anticipated to
be shallower and shorter in duration than was previously forecast allowing the
Company to look forward with cautious optimism.
Underlying operating margins increased to 6.8 per cent in the year as a result
of tight cost control, production efficiencies arising from a program of
capital investment, successful resolution of legacy accounts and increased
stability in input costs in the second half of the year. The operating
margin achieved within the Safety Solutions entities continued its positive
progression, on increased output, at 22.3 per cent (2021: 17.9 per cent).
The operating margin achieved within the Structural Steelwork entities
represented a significant improvement against the prior period, at 5.8 per
cent (2021 - underlying: 0.1 per cent).
Underlying earnings per share increased from 8.1 pence in 2021 to 39.1 pence
in 2022 representing an increase of 383 per cent.
Cash management and prudent utilisation was a primary focus during the year.
During the first half of the year, with escalating steel price rises, the
conscious decision was made to pre order quantities of steel to preserve and
enhance margins on future contracts. With reduced volatility in input costs
relating to steel in the second half of the year the cash utilisation eased
and the year concluded with a more normalised gross cash balance of £11.6
million (2021: £10.4 million). The average gross cash balance during the
year was £7,890,000 (2021: £13,390,000). The continued strong cash
position leaves the Group well placed to achieve both its short and long-term
objectives, while providing financial security and providing opportunities to
invest and mitigate short term price volatility in some of its primary input
costs.
As a result of rising interest rates the remaining mortgage of £750,000
associated with the purchase of the Shafton site in 2015 was repaid in January
2023.
Average staff numbers in 2022 increased 8.3 per cent to 403, with an overall
rise in staff costs of 14.9 per cent year on year excluding the cost
associated with Share Based Payments (SBP). Industry wide challenges remain to
ensure wage inflation is mitigated and in attracting sufficient quality
resource across all disciplines. At the year end employee numbers increased
to 415 and the Group anticipates a further modest increase in staff numbers in
2023 as further overseas labour arrives in the UK.
The Shafton facility continues to provide the Group with opportunity to expand
and diversify its operations further optimising the current resources within
the control of the Group.
Consolidated Balance Sheet
2022 2021
£'000 £'000
Non current assets 21,902 17,527
Current assets 38,774 35,428
Current liabilities (22,506) (21,705)
Non current liabilities (3,823) (1,858)
Total equity 34,347 29,392
As part of the capital investment programme across the Group two further
significant capital expenditure projects were completed. One project, at
Shafton, related to the investment in substantially increasing the plate
processing capacity and capabilities to provide additional plate girder
profiling capacity, combined with increasing the capacity open to external
customers. The second project related to the replacement of an aged saw /
drill machine at the Wombwell facility.
The acquisition of the trading assets of Orrmac Coatings Ltd out of
administration and the formation of Specialist Protective Coatings Limited has
seen a number of capital investment projects completed at its Sheffield
facility over the course of the year. £1,171,000 of capital expenditure was
incurred in modernising the facility in 2022, the largest single project being
the installation of a new shotblast machine, designed for the efficient
processing of structural steelwork.
Further investment projects to improve operational efficiencies and increase
certain manufacture capacities were commenced just prior to the year end, with
a further order being placed for a saw / drill line for the Yate facility.
The machine was delivered in March 2023 with a forecast two-month installation
period.
As part of the Group's ongoing strategy to improve operating margins there is
an agreed programme of capital equipment replacement and enhancement over the
next three years.
Within non-current assets, property, plant and equipment increased by
£4,410,000, represented by capital additions of £6,558,000 (including
£2,078,000 related to right of use assets in respect of IFRS16), depreciation
charges of £2,044,000 and net disposals of £105,000.
The defined benefit pension scheme has performed well in the period against a
backdrop of turbulent equity and bond markets towards the latter part of
2022. At the year end, a surplus of £2,174,000 along with a corresponding
deferred tax liability of £544,000 has resulted in a net recognised surplus
of £1,630,000. The scheme was closed to future accrual in 2011.
The net deferred tax liability at the year end was £1,525,000 (2021:
£1,108,000), being a deferred tax liability of £981,000 (2021: £440,000)
related to temporary timing differences, combined with a deferred tax
liability of £544,000 (2021: £668,000) related to the defined benefit
pension scheme surplus.
The increase of £3,346,000 in current assets included an increase of
£4,731,000 in inventories and contract work in progress, a decrease of
£1,958,000 in trade and other receivables, and an increase in the gross cash
balance of £1,252,000.
Retention balances, contained within trade and other receivables outstanding
at the year end, were £2,198,000 (2021: £1,951,000). It is anticipated
that £1,992,000 will be received within one year and £206,000 in greater
than one year.
Trade and other payables increased by £589,000. Within this, trade payables
and accruals decreased £1,655,000 and £1,187,000 respectively with contract
liabilities increasing £3,430,000 and minor movements being noted in social
security and other taxes and other payables.
Total equity increased by £4,955,000 in the year to £34,347,000. The
financial position of the Group at the end of the year remains robust and
provides a strong platform to drive shareholder value.
Consolidated Cash Flow Statement
2022 2021
£'000 £'000
Result for shareholders 4,734 68
Depreciation 2,044 1,960
Capital expenditure (4,516) (2,351)
Investment property movement (404) -
Tax received / (paid) 192 (246)
Tax per income statement 1,095 111
Increase in working capital (2,064) (3,565)
Dividends (363) (515)
Net property loan movement (250) (250)
Share based payment charge / (credit) 806 (53)
Others (22) 97
Net cash inflow / (outflow) 1,252 (4,744)
Cash at beginning of year 10,382 15,126
Cash at end of year 11,634 10,382
Dividends of £363,000 were paid in the year.
A dividend has been proposed in respect of the 2022 financial year of 15.5
pence per share (£2,005,000), covered 2.52 times earnings and will be paid to
shareholders in July 2023 upon approval at the AGM. Confidence in future
trading and cash generation has led to the declaration of a dividend at a
level higher than any previously made by the Company.
The Group remains committed to treating its suppliers and subcontractors
fairly and to paying them in line with their agreed payment terms. It is the
Group's policy not to withhold retentions from members of its valued supply
chain.
Working capital at the year end was as below:
2022 2021
£'000 £'000
Inventories and contract work in progress 16,882 12,151
Trade and other receivables 10,258 12,216
Trade and other payables (22,044) (21,455)
Working capital at end of year 5,096 2,912
Cash balances at the year end totalled £11,634,000 and there were property
loans outstanding of £750,000 representing a net cash position of
£10,884,000 (2021: £9,382,000). Cash management and preservation remained
a continued focus during the year. The robust cash position of the Group
allowed it to take advantage of advanced purchase of steel to mitigate some of
the price escalations during the year and mitigate margin pressure.
The strong cash position also provides the Group with financial stability and
allows the investment in capital assets to improve operating margins and
provide a comprehensive service to its clients.
2023 to 2025 will see the continued programme of capital additions, primarily
within the structural steel division of the Group. The additional capital
expenditure will support both an increase in the range of services the Company
can offer as well as replacing a number of aged machines with more efficient
models. Investment in the latest technologies will ensure Billington can
deliver the most challenging projects, efficiently, for its clients.
Pension Scheme
2022 2021
£'000 £'000
Scheme assets 6,820 9,693
Scheme liabilities (4,646) (7,020)
Surplus 2,174 2,673
Other finance (expense)/income (13) (33)
Contributions to defined benefit scheme - -
To limit the Group's exposure to future potential pension liabilities the
decision was taken to close the remaining Billington defined benefit pension
scheme to future accrual from 1 July 2011. The scheme's liabilities have
moved broadly in line with the scheme's assets. The assets are primarily
invested in UK Government bonds and the scheme continues to remain in a strong
surplus position with an unlikely requirement that funds will be required from
the Company in the foreseeable future.
The scheme's triennial valuation for the period ended 31 March 2020 was
completed on 10 December 2020. The position of the scheme as at the date of
the valuation was an asset position of £8,048,000 and a liability position of
£7,776,000 resulting in a surplus of £272,000. At the valuation date of 31
March 2020, the equity market had been significantly impacted by the pandemic
and as a consequence affected the value of the assets within the scheme. The
FTSE 100 index at 31 March 2020 was 5,672 and has subsequently recovered to
circa 7,600, an increase of some 34 per cent, before the assets were
transferred into UK government bonds to protect and manage the strong surplus
position of the scheme in the long term. The next actuarial valuation is due
to be completed as at 31 March 2023.
Employee Share Option Trust (ESOT)
The Group operates an ESOT to allow employees to share in the future,
continued success of the Group, promote productivity and provide further
incentives to recruit and retain employees.
Options are issued based on seniority and length of service across all parts
of the Group.
A Long-Term Incentive Plan (LTIP) was introduced across the Group to assist in
the remuneration of management and further align the interests of senior
management and shareholders. Awards are made subject to achieving progressive
Group performance metrics over a three-year period.
At the year end there were 993,669 (2021: 474,577) share options outstanding
at an average exercise price of £0.14 (2021: £0.29) per share. Share options
are in place in HMRC approved and unapproved schemes.
The charge included within the accounts in respect of options in issue is
£806,000 (2021: credit £53,000).
Trevor Taylor
Chief Financial Officer
17 April 2023
Consolidated income statement for the year ended 31 December 2022
2022 Underlying 2021 Non-underlying 2021 Total 2021
£'000 £'000 £'000 £'000
Revenue 86,614 82,720 - 82,720
Raw materials and consumables (51,277) (55,784) - (55,784)
Other external charges (4,792) (4,542) - (4,542)
Staff costs (19,566) (16,268) - (16,268)
Depreciation (2,044) (1,960) - (1,960)
Other operating charges (3,024) (2,827) - (2,827)
Impairment losses - - (1,123) (1,123)
(80,703) (81,381) (1,123) (82,504)
Operating profit/(loss) 5,911 1,339 (1,123) 216
Net finance expense (82) (37) - (37)
Profit/(loss) before tax 5,829 1,302 (1,123) 179
Tax (1,095) (324) 213 (111)
Profit/(loss) for the year 4,734 978 (910) 68
Profit for the year attributable to equity holders of the parent company 4,734 978 (910) 68
Basic earnings per share 39.1 p 8.1 p (7.5) p 0.6 p
Diluted earnings per share 37.8 p 8.1 p (7.5) p 0.6 p
All results arose from continuing operations.
Consolidated statement of comprehensive income for the year ended 31 December
2022
2022 2021
£'000 £'000
Profit for the year 4,734 68
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss
Remeasurement of net defined benefit surplus (486) 1,023
Movement on deferred tax relating to pension liability 122 (348)
Other comprehensive income, net of tax (364) 675
Total comprehensive income for the year attributable to equity holders of the 4,370 743
parent company
Consolidated statement of financial position as at 31 December 2022
2022 2021
£'000 £'000 £'000 £'000
Assets
Non current assets
Property, plant and equipment 19,264 14,854
Investment property 464 -
Pension asset 2,174 2,673
Total non current assets 21,902 17,527
Current assets
Inventories 3,334 1,894
Contract work in progress 13,548 10,257
Trade and other receivables 10,258 12,216
Current tax receivable - 679
Cash and cash equivalents 11,634 10,382
Total current assets 38,774 35,428
Total assets 60,676 52,955
Liabilities
Current liabilities
Current portion of long term borrowings 250 250
Trade and other payables 22,044 21,455
Lease liabilities 143 -
Current tax payable 69 -
Total current liabilities 22,506 21,705
Non current liabilities
Long term borrowings 500 750
Lease liabilities 1,798 -
Deferred tax liabilities 1,525 1,108
Total non current liabilities 3,823 1,858
Total liabilities 26,329 23,563
Net assets 34,347 29,392
Equity
Share capital 1,293 1,293
Share premium 1,864 1,864
Capital redemption reserve 132 132
Other components of equity (761) (770)
Retained earnings 31,819 26,873
Total equity 34,347 29,392
Consolidated statement of changes in equity for the year ended 31 December
2022
Share capital Share premium Capital redemption reserve Other components of equity Retained earnings Total equity
£'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2021 1,293 1,864 132 (783) 26,711 29,217
Transactions with owners
Dividends - - - - (515) (515)
Debit relating to equity-settled share based payments - - - - (53) (53)
ESOT movement in year - - - 13 (13) -
Transactions with owners - - - 13 (581) (568)
Profit for the financial year - - - - 68 68
Other comprehensive income
Actuarial gains recognised in the pension scheme - - - - 1,023 1,023
Income tax relating to components of other comprehensive income - - - - (348) (348)
Total comprehensive income for the year - - - - 743 743
At 31 December 2021 1,293 1,864 132 (770) 26,873 29,392
Share capital Share premium Capital redemption reserve Other components of equity Retained earnings Total equity
£'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2022 1,293 1,864 132 (770) 26,873 29,392
Transactions with owners
Dividends (note 6) - - - - (221) (221)
Credit relating to equity-settled share based payments - - - - 806 806
ESOT movement in year - - - 9 (9) -
Transactions with owners - - - 9 576 585
Profit for the financial year - - - - 4,734 4,734
Other comprehensive income
Actuarial losses recognised in the pension scheme - - - - (486) (486)
Income tax relating to components of other comprehensive income - - - - 122 122
Total comprehensive income for the year - - - - 4,370 4,370
At 31 December 2022 1,293 1,864 132 (761) 31,819 34,347
The Group retained earnings reserve includes a surplus of £1,630,000 (2021 -
£2,005,000) relating to the net pension surplus
Consolidated cash flow statement for the year ended 31 December 2022
2022 2021
£'000 £'000
Cash flows from operating activities
Group profit after tax 4,734 68
Taxation received/(paid) 192 (246)
Interest received 26 21
Depreciation on property, plant and equipment 2,044 1,960
Share based payment charge/(credit) 806 (53)
Profit on sale of property, plant and equipment (309) (221)
Taxation charge recognised in income statement 1,095 111
Net finance expense 82 37
Increase in inventories and contract work in progress (4,731) (7,073)
Decrease in trade and other receivables 1,958 660
Increase in trade and other payables 709 2,848
Net cash flow from operating activities 6,606 (1,888)
Cash flows from investing activities
Purchase of property, plant and equipment (4,516) (2,351)
Purchase of investment property (404) -
Proceeds from sale of property, plant and equipment 348 294
Net cash flow from investing activities (4,572) (2,057)
Cash flows from financing activities
Interest paid (95) (25)
Repayment of bank and other loans (250) (250)
Capital element of leasing payments (74) (9)
Dividends paid (363) (515)
Net cash flow from financing activities (782) (799)
Net increase/(decrease) in cash and cash equivalents 1,252 (4,744)
Cash and cash equivalents at beginning of period 10,382 15,126
Cash and cash equivalents at end of period 11,634 10,382
Notes forming part of the Group financial statements for the year ended 31
December 2022
1) Basis of preparation
The financial information in this preliminary announcement has been prepared
in accordance with accounting policies which are based on the UK-adopted
International Financial Reporting Standards (IFRSs) as adopted by the UK and
in issue and in effect at 31 December 2022.
2) Accounts
The summary accounts set out above do not constitute statutory accounts as
defined by Section 434 of the UK Companies Act 2006. The summarised
consolidated balance sheet at 31 December 2022, the summarised consolidated
income statement, the summarised consolidated statement of comprehensive
income, the summarised consolidated statement of changes in equity and the
summarised consolidated cash flow statement for the year then ended have been
extracted from the Group's 2022 statutory financial statements upon which the
auditor's opinion is unqualified and did not contain a statement under either
sections 498(2) or 498(3) of the Companies Act 2006. The audit report for the
year ended 31 December 2021 did not contain statements under sections 498(2)
or 498(3) of the Companies Act 2006. The statutory financial statements for
the year ended 31 December 2021 have been delivered to the Registrar of
Companies. The 31 December 2022 accounts were approved by the directors on 17
April 2023, but have not yet been delivered to the Registrar of Companies.
3) Earnings per share
2022 Underlying 2021 Non-underlying 2021 Total 2021
Basic earnings per share 39.1 p 8.1 p (7.5) p 0.6 p
Diluted earnings per share 37.8 p 8.1 p (7.5) p 0.6 p
Basic earnings per share is calculated by dividing the profit for the year of
£4,734,000 (2021: profit for the year of £68,000 and underlying profit for
the year of £886,000) by 12,117,190 (2021: 12,106,797) fully paid ordinary
shares, being the weighted average number of ordinary shares in issue during
the year, excluding those held in the ESOT.
Diluted earnings per share is calculated by dividing the profit for the year
of £4,734,000 (2021: profit for the year of £68,000 and underlying profit
for the year of £886,000) by 12,507,863 (2021: 12,106,797) fully paid
ordinary shares, being the weighted average number of ordinary shares in issue
during the year, excluding those held in the ESOT, plus shares deemed to be
issued for no consideration in respect of share-based payments of 386,481
(2021: nil).
4) Reports, Accounts & AGM
The Annual Report and Accounts for the year ended 31 December 2022 will be
available on the Company's website www.billington-holdings.plc.uk
(http://www.billington-holdings.plc.uk) from no later than 28 April 2023.
The Annual General Meeting will be held on 6 June 2023 at 14.00 at fincapp
Group, One Bartholomew Close, London, EC1A 7BL.
5) Segmental Information
The Group trading operations of Billington Holdings Plc are in Structural
Steelwork and Safety Solutions, and all are continuing. The Structural
Steelwork segment includes the activities of Billington Structures Limited,
Peter Marshall Steel Stairs Limited and Specialist Protective Coatings
Limited. The Safety Solutions segment includes the activities of Easi-Edge
Limited and Hoard-it Limited. The Group activities, comprising services and
assets provided to Group companies and a small element of external property
rentals and management charges, are shown in Other. All assets of the Group
reside in the UK.
31 December 2022 Structural Steelwork Safety Other Total
£'000
Solutions
£'000
£'000
£'000
Revenue
From external customers 75,977 10,637 - 86,614
From other segments 40 612 319 971
Segment revenues 76,017 11,249 319 87,585
Elimination of segment revenues (971)
Revenue 86,614
Raw materials and consumables (47,607) (3,670) - (51,277)
Other external charges (3,143) (1,649) - (4,792)
Staff costs (15,162) (1,926) (2,478) (19,566)
Depreciation (969) (760) (315) (2,044)
Other operating (charges)/income (4,696) (730) 2,402 (3,024)
Segment operating profit/(loss) 4,440 2,514 (72) 5,911
31 December 2021 Structural Steelwork Safety Other Total
£'000
Solutions
£'000
£'000
£'000
Revenue
From external customers 73,960 8,760 - 82,720
From other segments 114 398 235 747
Segment revenues 74,074 9,158 235 83,467
Elimination of segment revenues (747)
Revenue 82,720
Raw materials and consumables (52,948) (2,836) - (55,784)
Other external charges (3,261) (1,281) - (4,542)
Staff costs (13,008) (1,623) (1,637) (16,268)
Depreciation (663) (1,023) (274) (1,960)
Other operating (charges)/income (4,096) (756) 2,025 (2,827)
Segment operating profit 98 1,639 349 1,339
Impairment losses - non-underlying (1,123) - - (1,123)
Segment operating profit/(loss) (1,025) 1,639 349 216
6) Dividend
A final dividend in respect of 2021 of 3.0 pence (£363,000) per ordinary
share was paid on 3 July 2022. No interim dividends were paid in 2022. A final
dividend has been proposed in respect of 2022 of 15.5 pence (£2,005,000) per
ordinary share. As the distribution of dividends by Billington Holdings Plc
requires approval at the shareholders' meeting, no liability in this respect
is recognised in the consolidated financial statements.
Following a review of unclaimed dividends over 12 years old, in accordance
with the Company's Articles of Association a write-back of £142,000 has been
recognised during the year.
7) Going Concern
The consolidated financial statements have been prepared on a going concern
basis. The Directors have taken note of the guidance issued by the Financial
Reporting Council on Going Concern Assessments in determining that this is the
appropriate basis of preparation of the financial statements and have
considered a number of factors.
The financial position of the Group, its continued positive trading
performance in 2022 are detailed in the Financial Review and they demonstrate
the robust position of the Group heading into 2023.
The Group has a gross cash balance of £11.6 million at 31 December 2022 and
no significant long-term borrowings or commitments. The Group repaid its only
remaining borrowing shortly after the period end, being £0.75m relating to
the mortgage on the Shafton site taken out in 2015 in order to reduce the
interest cost associated with the loan. The Group has short term agreed
overdraft facilities with its bankers should they be required, these are
reviewed annually and have not been utilised during 2022.
The Group has maintained its strong cash position notwithstanding the
continued capital expenditure programme currently being completed. The capital
expenditure programme across the Group is part of the Group's operational
improvement programme that is, and will continue to, yield production
efficiency gains in the short to medium term. The Directors have prepared
forecasts covering the period to April 2024 and approved by the Board in
February 2023. Pleasingly the impacts of COVID-19 subsided during the course
of 2022 with a number of deferred or cancelled projects returning to the
market ensuring levels of output were maintained.
The orderbook at the period end date increased 71% from the prior year with
high quality contracts across a number of buoyant market sectors and with
financially robust clients.
The Russia / Ukraine conflict that commenced in the early part of 2022 has
resulted in increased uncertainty across the globe. There have been
consequential impacts on material availability, energy prices, input costs and
latterly the possibility of a recessionary period in the UK are noted by the
directors and the anticipated effects addressed and mitigated where possible.
Workloads and anticipated margins across the Group remain buoyant and to date
there has been limited impact to trading levels.
The Group anticipates making further progress in terms of volumes and
efficiency enhancements in 2023. The Directors are forecasting trading
performance will continue to improve, generating positive cash flows and
continuing to build on a strong, debt free statement of financial
position.
The Directors have reviewed the Group's forecasts and projections for the
period to April 2024, including sensitivity analysis to assess the Group's
resilience to potential adverse outcomes including a highly pessimistic
'severe but plausible' scenario. This scenario is based on a significant
reduced trading performance for some of the entities within the Group and no
further orders being received for the Group's primary trading entity.
Furthermore, significant contract deterioration from that anticipated at the
period end date has been assumed in the pessimistic scenario. Notwithstanding
the stress tests that have been completed on the forecasts and projections the
Group projects that it would have sufficient resources to continue trading
without the requirement for any external funding requirements.
The Directors expect that the Group has sufficient resources to enable it to
continue to adopt the going concern basis in preparing the financial
statements.
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