REG - Billington Holdings - Results for the year ended 31 December 2023
16/04/2024 07:00
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RNS Number : 6987K Billington Holdings PLC 16 April 2024
16 April 2024
Billington Holdings Plc
("Billington" or the "Company" or the "Group")
Results for the year ended 31 December 2023
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 2023.
Highlights
31 December 2023 31 December 2022 Change
Revenue £132.5m £86.6m +53.0%
EBITDA* £15.5m £8.0m +93.8%
Profit before tax £13.4m £5.8m +131.0%
Profit for the year £10.3m £4.7m +119.1%
Cash and cash equivalents £22.1m £11.6m +90.5%
Earnings per share 84.4p 39.1p +115.9%
Dividend per share 33.0p 15.5p +112.9%
Return on Capital Employed (ROCE)** 57.4% 29.7% +93.3%
* Earnings before interest, tax, depreciation and amortization
** Operating profit divided by total equity less the net defined benefit
pension surplus and net cash
• Billington delivered a record performance in 2023 with strong trading across
the Group
• Revenue increased by 53.0% to £132.5 million (2022: £86.6 million)
• The Group achieved a significant increase in profits, with profit before tax
of £13.4 million (2022: £5.8 million)
• Strong cash balance of £22.1 million at year end (31 December 2022: £11.6
million) and the Group is now debt free
• Dividend recommended of 33 pence per share, which should be seen as an
ordinary dividend of 20 pence per share and as an additional exceptional
amount of 13 pence per share, reflective of the outstanding performance of the
Group in the year (2022: 15.5 pence per share, all relating to an ordinary
dividend)
Mark Smith, Chief Executive Officer of Billington, commented:
"2023 was an exceptional year for Billington, with an excellent trading
performance across the Group, despite continuing macroeconomic challenges and
against the backdrop of demand for structural steel in the UK remaining at a
similar level to 2022. I believe Billington is increasingly being seen as
the steel work contractor of choice and the growth in Billington's market
share in 2023 is particularly noteworthy. Whilst there inevitably remain
further challenges ahead and market uncertainties are likely to remain for
some time, the Group has made significant investments for the future and
currently has a record order book. I am therefore confident that with our
strong balance sheet and order book Billington will continue to perform well
and in line with current market expectations."
For further information please contact:
Billington Holdings Plc Tel: 01226 340 666
Mark Smith, Chief Executive Officer
Trevor Taylor, Chief Financial Officer
Cavendish Capital Markets Ltd - Nomad and Broker Tel: 020 7220 0500
Ed Frisby / Charlie Beeson - Corporate Finance
Andrew Burdis - ECM
IFC Advisory Limited - Financial PR and IR Tel: 020 3934 6630
Tim Metcalfe billington@investor-focus.co.uk
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, 16 April 2024, at 15.30 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://www.investormeetcompany.com/billington-holdings-plc/register-investor)
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
2023 was an exceptional year for Billington, with an excellent trading
performance across the Group.
In 2023 revenue increased by 53.0 per cent to £132.5 million (2022: £86.6
million) with profit before tax increasing to £13.4 million (2022: £5.8
million), reflecting strong trading across the Group and the benefit of
improved manufacturing efficiencies from our capital investment programme
across all the Group's production facilities. This is combined with the
successful delivery of a number of high quality contracts. The Basic
Earnings Per Share ("EPS") for the year amounted to 84.4 pence compared with
39.1 pence in 2022. Our balance sheet strengthened further with Net Assets
of £47.8 million at 31 December 2023 (2022: £34.3 million), with a strong
gross cash balance of £22.1 million at 31 December 2023 (31 December 2022:
£11.6 million), as working capital unwound from the middle of the year, as
expected.
Billington Structures performed exceptionally in 2023, driven by a number of
high value contracts across a variety of sectors including high tech
manufacturing, data centres, energy from waste, distribution and commercial
office developments. The business also benefited from the Group's capital
investment strategy and focus on efficiency improvements enabling increased
capacity and higher margins. The business is well set for the future with
steel prices softening to nearer long-term average rates and more market
stability being experienced. As announced on 22 March 2024, the Group has
recently won contracts with a combined value of approximately £90 million, to
be delivered over the next 24 months, providing further confidence for the
future.
Peter Marshall Steel Stairs continued the strong performance seen over the
past three years, recording record revenues for the year. Whilst the
business continued to face challenging market conditions, it retained robust
margins by focusing on contracts where a profitable performance could be
achieved. The Company 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 faced a
challenging period in 2023, although it remained a significant contributor to
Group profits. Significant investment has been made in the business, with
additional staff added and a product refurbishment and product development
programme being undertaken. Easi-Edge remains a profitable market leader and
is well placed for the future.
Hoard-it enjoyed a record year in 2023, as it continued to expand and
diversify its offerings. The business is increasingly being seen as the
specialist hoarding supplier of choice and it is now established as one of the
leading suppliers in its markets. With the expanded Brand-it offering
complementing Hoard-it, the business is well placed for the future and has
made a good start to 2024.
Specialist Protective Coatings (SPC), formed in March 2022, has proved to be
an excellent addition to the Group, focused on surface preparation and the
application of protective coatings for products across a variety of sectors.
The significant capital expenditure programme undertaken to ensure the
business had the ability to thrive and grow was completed in 2023. SPC's
performance was ahead of management's expectations in 2023 and the Company
enjoyed its first year of profitability. With SPC operating at full capacity
for the foreseeable future we expect it to continue to deliver a strong
performance.
The Group has secured a number of significant contracts for 2024, and beyond,
and is well placed to take advantage of the wide-ranging further opportunities
within our strong pipeline.
Dividend
In the first half of 2023 Billington declared a final dividend in relation to
the year ended 31 December 2022 of 15.5 pence per share amounting to £1.9
million, which was 2.52 times covered by 2022 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 pleased to be
recommending an increased final dividend of 33.0 pence per share for 2023,
which is covered 2.56 times by earnings. The dividend should be seen as an
ordinary dividend of 20 pence per share and an additional exceptional amount
of 13 pence per share due to the outstanding performance of the Group in the
year.
The dividend will be paid on 2 July 2024, subject to shareholder approval at
the Company's AGM expected to be held on 4 June 2024. The associated
ex-dividend date will be 6 June 2024 with a record date of 7 June 2024. No
interim dividend for 2023 was declared (2022: nil), a policy consistent with
prior years.
Board
John Gordon retired as an Independent Non-Executive Director of Billington at
the AGM in June 2023. John had been a Non-executive Director since 2007 and
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.
Lyndsey Scott was appointed as an independent Non-Executive Director with
effect from 1 September 2023. Lyndsey has brought a wealth of HR and people
management experience to the Group and has previously worked across a range of
sectors, both in the UK and internationally. Lyndsey has experience as a
Non-Executive Director as well as being a member of remuneration, audit and
nomination committees with James Cropper Plc, an AIM traded company. Lyndsey
has assumed the chair of the Company's Remuneration Committee since her
appointment.
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 2023.
The Group continues to work hard to address the industry wide challenges in
recruiting sufficient skilled labour. In 2023 the Group expanded its
partnership with Betterweld, a specialist training provider, together with
working in partnership with other local education providers. However, as
stated in the last annual report it became necessary for the Group to recruit
from overseas to have sufficient skilled labour to ensure productive capacity
is increased and profitability maximised. The overseas recruitment programme
was concluded in 2023, at least for now, with an additional 25 staff members
joining during the year. The new employees 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 increases in the cost of living are being experienced and continues
to actively promote its apprenticeship and graduate schemes.
ESG
Billington believes that operating in a sustainable and responsible manner is
key to the growth and success of the Group. The Group has an established
Environmental, Social and Governance ("ESG") committee to identify, develop
and implement carbon reduction projects, together with ensuring the Group's
social impact is maximised through the delivery of a wide range of social
projects.
In September 2023, the Company's largest subsidiary, Billington Structures,
was certified as 'carbon neutral' for its operations, by Carbon Neutral
Britain, following their audit of Billington Structures' emissions and carbon
dioxide offsetting programme. Following carbon reduction initiatives across
the Group, I am pleased to report that all of the Group's businesses are now
certified as carbon neutral. Billington is committed to achieving, as a
minimum, the goal set by SBTi (Science Based Targets Initiative), of a 50%
carbon emissions reduction by 2030 and net zero by 2050. There is a
significant global initiative to ensure 'clean steel' and Billington are proud
to be a member of SteelZero, a global standards and certification initiative
designed to deliver environmentally responsible production of steel and speed
up the transition to a net zero steel industry.
During 2023 the Group moved to using electricity procured from 100 per cent
green energy with a REGO accredited zero per cent emissions factor. The
vehicle fleet is increasingly electric, reducing carbon emissions by
approximately 15% annually, and further planned reduction activities include
the introduction of Biofuel (HVO) across factories and site-based
activities. Additionally, 1,770 tonnes of CO₂e emissions have been offset
via the Woodland Fund™ portfolio of verified carbon offsetting projects.
Billington also maintains the 'Gold Standard' awarded by the British
Constructional Steel Association for meeting the requirements of the 'Steel
Construction Sustainability Charter'.
Economic Outlook
During the year a degree of stability returned on the supply side and the
Group experienced none of the supply issues seen over the last few years.
There was some softening in steel prices, which has assisted margins in the
short term and energy costs were lower than anticipated at the start of the
year. This stability is expected to remain during 2024.
The Group continues to benefit from significant projects in energy from waste,
high-tech manufacturing, infrastructure and data centre facilities, where
activity has returned to, or exceeded, pre-Covid-19 pandemic levels. However,
some of the markets in which Billington operates continue to see reduced
levels of activity from historic levels, particularly large office
developments, and industrial warehousing development, with less speculative
development being undertaken.
The overall consumption of structural steelwork in the UK in 2023 remained at
a similar level to 2022. However, certain markets were more buoyant than
others, with the consumption of structural steelwork in industrial buildings
falling by 2.2 per cent and for commercial offices rising by 6.8 per cent.
The overall market is expected to see a reduction in demand in 2024 of
approximately 5 per cent, before stabilising and returning to growth in
2026. Sector market forecasts continue to be subject to revision as the
impact of wider macroeconomic factors are assessed, with potential reductions
in interest rates expected to have a positive impact on demand.
We are conscious that many of the main construction contractors continue to
operate under significant pressure, with a number ceasing business in 2023,
and the Group has experienced deferred and cancelled contracts. The Group
insures its exposures with the maximum available cover, in an increasingly
difficult credit insurance market, and focuses on projects with the more
robust larger contractors that can deliver an appropriate margin. We have a
comprehensive process in place to assess the risks associated with individual
projects on a case-by-case basis to reduce and mitigate these associated risks
where possible.
Current trading and outlook
Billington enjoyed an exceptional year in 2023 with strong trading across the
Group and benefits being seen from the Group's capital investment programme
and innovative approach. Whilst there inevitably remain further challenges
ahead and macroeconomic uncertainties are likely to remain for some time, we
are seeing a consistent stream of opportunities at sustainable margins, and
with a strong balance sheet and a record order book, I believe Billington is
well placed to deliver a strong performance again in 2024.
In closing, I would like to thank Billington's Board, employees, shareholders
and all stakeholders for their continued support.
Ian Lawson
Non-Executive Chairman
15 April 2024
Group Strategy
The business model of the Group is to operate as a designer, manufacturer and
installer of structural steelwork through its subsidiaries Billington
Structures Limited, Peter Marshall Steel Stairs Limited and Specialist
Protective Coatings Limited, and as a supplier of safety solutions and barrier
systems to the construction industry, through its subsidiary Easi-Edge Limited
as well as providing specialist site hoarding and branding systems through
Hoard-it Limited. The parent company acts as a holding company providing
management services to its subsidiaries.
Billington strives for continuous improvement in all aspects of its operations
to ensure we harness the energy of our people and deliver for our repeat
clients in a safe, economic and sustainable manner, enabling the value for our
shareholders to be maximised.
The Company has adopted five key pillars to its strategy that will remain the
focus of the business to drive shareholder value. The five key pillars, or
'5 P's', are focussed on developing, progressing and managing the areas that
can add value and protect our business, and are set out below:
People
• To ensure a safe working environment and drive our safety culture forward
• To actively promote and encourage the next generation of people into our
exciting industry
• To harness individuals' energy, ambition and core skills
• To develop, motivate and inspire the next generation of people into and within
our business
• To evolve a diverse, inclusive and thriving workforce
Properties
• To ensure value is driven from our facilities
• To maintain a cost base to allow manufacturing margins to be optimised
• To ensure manufacturing capabilities are appropriate to service the needs of
our clients, projects and markets
• To have appropriate infrastructure to provide our businesses the ability to
grow and prosper
Product
• To provide a quality product using a right first-time philosophy
• To innovate and drive technological improvements across the businesses
• To challenge the status quo of manufacturing techniques in our industry
• To learn from our mistakes in an open, constructive and inclusive way
Position
• To be the partnered steelwork contractor of choice in the UK for major
projects
• To seek and expand the Group's operations to provide construction solutions to
our clients
• To actively identify, target and partner with clients on large projects to
maximise collective value
• To expand the Group's operations into markets which can add value to the
business and provide economic resilience
• To deliver long term sustainable returns and growth to our shareholders
Planet
• To operate with environmental considerations at the forefront of all
operational decisions
• To support, encourage and take an active involvement in the UK's structural
steelwork industry's drive for carbon reduction
• To ensure the company proactively seeks areas for energy reduction and
operational efficiencies
• To reduce waste through proactive engagement with clients, optimum engineering
and partnerships with the supply chain
Chief Executive Statement
Operational Review
2023 was an exceptional year for the Group as a number of high-quality
contracts were secured at improved margin levels. The Group's revenues
increased by 53.0 per cent to £132.5 million for the year (2022: £86.6
million) despite the overall UK structural steel market remaining at a similar
level to 2022. This growth in Billington's market share is particularly
pleasing and I believe places the Group in an even stronger position for the
future.
Despite margin pressures remaining across the industry, profit before tax
increased by 131.0 per cent to £13.4 million (2022: £5.8 million), resulting
in the highest levels of revenue and profits ever achieved by the Billington
Group and ahead of our expectations at the start of the year. The Group is
also now debt free, having repaid the remaining modest outstanding debt in
January 2023.
Whilst we are mindful of the uncertain macroeconomic environment and
continuing margin pressures, the Group is enjoying significant benefits from
the improved manufacturing efficiencies arising from the deployment of its
capital investment programme across all the Group's production facilities,
together with increases in skilled labour and the services the Group is able
to offer.
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, allowing for the supply of
value added, complementary products and services enhancing the comprehensive
offering of the Group.
The Group's structural steel businesses had an exceptional 2023, with many of
the projects undertaken being at higher margins than those achieved in 2022.
The business continues to serve a wide variety of markets, with a good
portfolio of customers. Particularly strong demand is being seen in the
energy from waste, high-tech manufacturing, infrastructure and data centre
sectors. Whilst large office developments remain limited and industrial
warehousing development has slowed, Billington Structures continued to secure
contracts in these areas.
These higher margin 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 and a softening in steel prices, with a return
to nearer historic norms, aiding the enhancement of margin on some projects.
The larger projects undertaken by Billington Structures during 2023 included:
• Westfield EfW (Scotland)- energy from waste
• University of Huddersfield - education
• Circle Square (Manchester) - commercial offices
• Arle Court (Cheltenham) - infrastructure
• LON1 (Slough), LON4 (Hayes) - data centres
It is pleasing to note that again some of the Company's complex and
challenging projects were recognised in some of the industry's prestigious
awards. This included the New Bailey project in Manchester being awarded
'The Best Large Project Award' at the iStructE Northwest Structural
Engineering Awards 2023.
Further large items of capital equipment were purchased for Billington
Structures in 2023, including two saw and drill line replacements, one in the
Wombwell facility and the other in Bristol. In December 2023 orders were
also placed for additional state of the art equipment, including a plate laser
machine for Wombwell and a drill cope for Shafton. In making these purchases
we are seeking to capitalise on new developments to further improve both
efficiency and customer service, whilst ensuring the business is well placed
for the future.
Billington Structures has a strong order book for 2024 and into 2025,
including the £90 million of contracts announced in March 2024, and is seeing
additional significant future project opportunities at improving margins.
Whilst the outlook for certain sectors is uncertain and a slight market
softening is expected in 2024, the future prospects for Billington Structures
are encouraging.
Specialist Protective Coatings
Specialist Protective Coatings was formed in March 2022 following the
Company's acquisition out of administration of the trading assets of Orrmac
Coatings Ltd. SPC is focused on surface preparation and the application of
protective coatings for products across a variety of sectors including rail,
highways, defence, water, petrochemical, energy, structural steel and
infrastructure.
Since its formation, SPC based in a 55,000 square foot facility in Sheffield,
has undergone a substantial refurbishment and 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. This programme was substantially completed in
2023 and the business is now fully integrated within the Group, servicing both
internal Billington work and external customers.
During the year SPC operated at near full capacity, trading ahead of
management's expectations and was profitable over the full year. In
addition, the Group has further expanded its dedicated on-site painting
service to enable SPC to be a one-stop-shop for the painting requirements of
the structural steel sector. SPC currently has a strong pipeline of work and
is expected to be operating at maximum capacity during 2024.
Notable projects undertaken by SPC in 2023 included:
• Skelton EfW (Leeds) - energy from waste
• LON4 (Slough) - data centres
• Traps and handling frames - oil and gas
• Pipework - infrastructure
• Surge vessels - infrastructure
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 to produce a strong performance during
the year, again recording record revenues and maintaining robust margins,
undertaking substantial work alongside Billington Structures and for third
parties. The business has maximised its capacity during the year, focusing
on efficiency to realise its full potential.
Contracts were secured from a variety of sectors, and notable projects
undertaken by Peter Marshall in 2023 included:
• 1 Leadenhall (London) - commercial offices
• Eastbrook Studios (Dagenham) - film studios
• Crown Packaging (Peterborough) - food production
• British Steel (Saltburn) - manufacturing / distribution
• Next (Rotherham)- distribution
The outlook for Peter Marshall Steel Stairs continues to be positive and the
business has a strong order book for 2024.
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 faced ongoing challenges in 2023, with a continued limited number of
projects in those sectors, such as commercial office developments, that
require a greater amount of product when compared to most other types of
projects, such as distribution warehouses, although the business remained a
contributor to Group profits. Additional resource has been added to the
business to maximise its potential and it retains its market leading
position. A project refurbishment and development programme is being
undertaken, with new barrier technologies being explored, to ensure the
business is appropriately positioned to secure available projects.
Significant projects undertaken by Easi-Edge in 2023 included:
• City Labs (Manchester) - medicine and health innovation hub
• Vantage Data Centre (London) - data centres
• Animate Cinema Complex (Preston) - leisure
• Council Offices (Blackpool) - commercial offices
• Worrall Street (Salford) - residential development
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.
Hoard-it had a record year in 2023, operating at near full capacity for much
of the year and benefiting from the Group's investment in stock levels in
advance of anticipated demand, enabling rapid deployment of its solutions.
It continued to take advantage of its industry leading position, with
further product development, diversification, and expansion. The business is
now established as one of the leading suppliers in its sector and is
increasingly being seen as the supplier of choice, both in commercial and
residential developments.
During the year Brand-it's graphics solutions were expanded. This is a value
added, margin enhancing product, that has also been a catalyst for the strong
performance. In particular, it has enabled the business to be increasingly
attractive for residential developments.
Significant projects were undertaken for both new and existing customers and
notable projects in 2023 undertaken by Hoard-it included:
• Baker Hicks (Scotland)
• Vincent Wyles (Coventry)
• Canvey Island (Essex)
• Secret Cinema (Birmingham)
• NOMA (Manchester)
Whilst material price inflation continued to be experienced in the early part
of the year, a softening of material costs later in the year, in particular
timber, gives further confidence that margins can be enhanced in 2024. The
positive momentum seen in 2023 has continued into the current year with a good
pipeline of new business for 2024. Further product development and
diversification is planned together with continued expansion of 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. In order to address these issues, the Group has
both expanded its schemes 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, and the Group has provided support to the regional education sector
through collaborations with Barnsley College, Bath College, the University of
Sheffield and Sheffield Hallam University. 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 has expanded its partnership with Betterweld, a specialist training
provider, to provide fabrication/welding training in Bristol, as well as for
its two Barnsley based facilities. This partnership is providing increasing
access to trained personnel on a consistent basis through the structured
training and development programme. Internally, the Billington Academy
continues to assist apprentices and other staff with training and upskilling,
including business best practice and compliance training.
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, promoter, 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
became 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 22 staff members
were recruited from overseas and an additional 25 staff members joined from
overseas in 2023. The overseas recruitment programme has now been concluded
for the present time. These highly skilled fabricators, welders and
technical staff, have proved to be a strong asset for the business, being
deployed in Billington Structures, Shafton Steel Services, Peter Marshall
Steel Stairs and Group services.
In light of the cost of living crisis and the want to support our employees
the decision was taken to bring forward the annual pay review planned for 1
January 2024 to July 2023. In July 2023 the Group awarded a record 7.5 per
cent pay increase to its staff, together with a year-end £1,000 bonus to
recognise the employee contribution to delivering an exceptional Group
performance.
Average staff numbers in 2023 increased by 12.7 per cent, with 463 employed at
the year end. We expect staff numbers to remain broadly at this level in
2024.
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 to 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 other's staff. In
2023 a new behavioural safety programme was rolled out 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 and we were pleased to report in
September 2023 that Billington Structures was certified as 'carbon neutral'
for its operations, by Carbon Neutral Britain, following their audit of
Billington Structures emissions and carbon dioxide offsetting programme.
Following this I am pleased to report that all of the Group's businesses are
now certified as carbon neutral.
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 ended in 2023. On renewal there was an increase in Group costs,
but the impact on Group profitability is significantly less than that caused
by material price changes. All energy contracts entered into by Group
companies are, since May 2023, now on 'green' tariffs that include carbon
offsetting. We are also focused on reducing energy usage where possible,
altering or replacing machinery where appropriate, and utilising hybrid,
electric and biofuel vehicles. Steel Zero, a commitment to become carbon
neutral and employ a responsible steel sourcing strategy was joined in 2022 as
part of the Group's journey to be a leader in driving carbon reduction
initiatives.
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. Further
investments were made in this area 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 2023, Billington donated to charities including Cancer Research UK,
Barnardo's, Oxfam and Mind, 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. Every year the Billington team is asked to choose a
charity they would like to see the Group support and the Group's charity of
the year for 2023 was Cancer Research UK.
Steel and Wider Construction Industry
Following the significant increases in steel prices experienced over recent
years, there was a softening in prices during the early part of 2023, before
stablising over the remainder of the year and into 2024.
The UK continues on its journey to become net zero by 2050. The UK steel
industry is expected to undergo a transformational change over the coming
years as domestic steel producers transition from blast furnace virgin steel
production to electric arc recycled steel production, supported by the UK
Government. The decommissioning of domestic blast furnaces and subsequent
replacement of lower emitting electric arc furnaces is not anticipated to
significantly impact the availability of the primary products the Group
utilises.
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. The
Company has a forward thinking strategy, with hedging undertaken in times of
price stability or rising prices, coupled with appropriate stockpiling of
steel, to enable most project's principal pricing risk to be covered.
Although, over the longer-term, any 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.
The Company communicates fully and openly with customers regarding costs of
work undertaken and provides 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 continued implementation of a 'no retention'
policy. The Group is also actively working with trade bodies to seek to
remove all cash retentions in the industry.
Strategy, Investment and Acquisitions
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 and adding additional headcount where appropriate. The benefits of this
strategy have been seen in the increased capacity and improved operating
margins achieved in 2023 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. 2023 was the third year of
the Group's five-year capital replacement programme and further capital
expenditure is expected in 2024 and 2025, before reducing to lower levels.
We continue to assess acquisition opportunities as they are presented and the
Company's strong balance sheet provides the ability for the Group to undertake
complimentary acquisitions. In addition, post the year end, the Group has
entered into an agreement with HSBC, the Company's bankers for a £6.0 million
Revolving Credit Facility (RCF) for three years to provide enhanced
flexibility to capitalise on acquisition opportunities should suitable and
appropriate prospects be identified.
Prospects and Outlook
2023 was an exceptional year for Billington as the benefits of the Group's
investment in efficiency improvements and people, coupled with the Group's
strong market position and increased offering, enabled the Group to grow
market share, achieve higher than historic margins and to focus on those
sectors that can deliver better returns.
Whilst the macroeconomic background remains uncertain, and some market
softening is expected in 2024, Billington is a robust business, with a strong
market position. With the recent large contracts secured, the Group
currently has a record order book and coupled with the Group's strong balance
sheet and a committed workforce I believe that Billington is very well
positioned to continue to perform well and in line with current market
expectations.
I would like to thank Billington's Board, shareholders and all stakeholders
for their continued support, and in particular I would like to thank the
Billington workforce for their hard work and dedication.
Mark Smith
Chief Executive Officer
15 April 2024
Financial Review
Consolidated Income Statement
2023 2022
£'000 £'000
Revenue 132,495 86,614
Operating profit 13,246 5,911
Profit before tax 13,388 5,829
Profit after tax 10,325 4,734
Profit for shareholders 10,325 4,734
Operating profit margin 10.0% 6.8%
Return on capital employed* 57.4% 29.7%
Earnings per share (basic) 84.4p 39.1p
*Operating profit divided by total equity less the net defined benefit pension
surplus and net cash
Revenue increased 53.0 per cent year on year as a result of increased output
across both trading segments of the Group. Structural Steel output increased
55.9 per cent and output related to Safety Solutions increased 2.9 per cent,
primarily related to additional site hoarding provided through Hoard-it.
The Structural Steel segment relates to the Billington Structures, Peter
Marshall Steel Stairs and Specialist Protective Coatings entities. Activity
across the segment was materially higher than in the prior year with a large
number of significant contracts being completed in the period. 2023 and 2022
has noted significant increases in direct labour both from the UK and overseas
allowing the entities to expand their productive capacities and enhance the
recovery of overheads resulting in improved margin returns.
Forecasts indicate that the consumption of structural steelwork within the UK
in 2023 remained consistent with 2022 with an output of some 893,000 tonnes.
The Group notes an increase in market share during the year with significant
increases in output in a consistent market.
The Company has secured a number of significant contracts in 2024 for delivery
in 2024 and 2025. A record orderbook is noted and further supports that
Billington is becoming the steelwork contractor of choice for its clients.
Sector market projections indicate that consumption will reduce by 4.9 per
cent to 849,000 tonnes in 2024 before returning to growth with a forecast 1.1
per cent increase to 858,000 tonnes in 2025 and a further 1.7 per cent to
873,000 tonnes in 2026. The consistent increases in UK Bank of England
interest rates in 2023 has suppressed the UK construction sector. Forecast
stabilisation, and potential reductions in interest rates towards the second
half of 2024 is anticipated to have a positive impact across the sector and
allows the Company to look forward with optimism.
Underlying operating margins increased to a record 10.0 per cent in the year
as a result of reductions in raw material prices, further capital expenditure
efficiency gains and higher output as a result of increased direct labour
within all the Groups facilities. Furthermore, energy costs incurred were
below that anticipated at the start of year as the energy market stabilised
and latterly has seen material declines to the wholesale prices. The operating
margin achieved within the Safety Solutions entities declined to 13.8 per cent
(2022: 22.3 per cent) as a result of reduced volumes of output in the
Easi-Edge business relating to the depressed commercial office sector combined
with raw material inflationary price pressures in the Hoard-it business. The
operating margin achieved within the Structural Steelwork entities represented
a significant improvement against the prior period, at 10.5 per cent (2022:
5.8 per cent).
Underlying earnings per share increased from 39.1 pence in 2022 to 84.4 pence
in 2023 representing an increase of 115.9 per cent.
As a result of high activity throughout the year cash management and prudent
utilisation was a primary focus. Significant activity towards the latter
part of the first half of the year realised into cash by the year end. The
gross cash balance at the year end was £22,084,000 (2022: £11,634,000).
The average gross cash balance during the year was £9,168,000 (2022:
£7,890,000). The strong cash position leaves the Group well placed to
achieve both its short and long-term objectives to maximise returns, while
providing financial security and providing the ability to invest and seek
opportunities for diversification.
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.
Since the year end the Group has entered into an agreement with HSBC, the
Company's bankers for a £6.0 million Revolving Credit Facility (RCF) for 3
years to provide enhanced flexibility to capitalise on acquisition
opportunities should suitable and appropriate prospects be identified.
Average staff numbers in 2023 increased 12.7 per cent to 454 following a rise
of 8.3 per cent in 2022, with an overall rise in staff costs of 31.1 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 463 and is anticipated to remain consistent
throughout 2024.
In light of the cost of living crisis and the want to support our employees
the decision was taken to bring forward the annual pay review to July and
award a record increase to its staff. The workforce is the lifeblood of the
business ensuring a motivated and settled environment allows the company to
positively seek to further build upon the most successful period in the
Billington era.
The business maintains credit insurance on its customers where available at
commercial rates. In light of the recent challenging macro economic
environment, combined with high levels of inflation, some clients have had a
number of poorly performing contracts resulting in a negative financial
performance. Consequently, the level of insurance in the market has noted
reductions in the limits being underwritten.
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
2023 2022
£'000 £'000
Non current assets 27,814 21,902
Current assets 53,782 38,774
Current liabilities (29,116) (22,506)
Non current liabilities (4,642) (3,823)
Total equity 47,838 34,347
As part of the capital investment programme across the Group two further
significant capital expenditure projects were completed relating to the
replacement of saw/drill lines at two of the Groups facilities. The Group's
5-year capital investment strategy relating to the upgrading and enhancement
of the principal pieces of equipment is yielding positive results and with two
years remaining will note the replacement cycle principally complete. Two
further orders for major pieces of machinery were placed towards the
conclusion of the year with installation anticipated in the first half of
2024.
Within the Autumn statement the Chancellor confirmed the permanent extension
of enhanced capital allowances. The timing of the capital expenditure strategy
will allow the company to maximise the benefit related to the claiming of its
capital allowances associated with its extensive investments in new plant and
machinery.
The decision was taken during the year to revalue the Group's properties, in
order that they reflect current market value. As a result, revaluation gains
totalling £5,868,000 have been recognised.
Within non-current assets, property, plant and equipment increased by
£6,065,000, represented by capital additions of £2,927,000, revaluation of
properties of £5,868,000, depreciation charges of £2,215,000, impairment
charges of £372,000 and net disposals of £143,000.
The defined benefit pension scheme has performed well in the period against a
backdrop of continued difficult equity and bond markets. At the year end, a
surplus of £1,871,000 along with a corresponding deferred tax liability of
£468,000 has resulted in a net recognised surplus of £1,403,000 (2022:
£1,630,000). The scheme was closed to future accrual in 2011.
The net deferred tax liability at the year end was £3,001,000 (2022:
£1,525,000), being a deferred tax liability of £1,066,000 (2022: £981,000)
related to temporary timing differences, combined with a deferred tax
liabilities of £468,000 (2022: £544,000) related to the defined benefit
pension scheme surplus and £1,467,000 related to the revaluation of land and
buildings (2022: nil).
The increase of £15,008,000 in current assets included a decrease of
£1,758,000 in inventories, a decrease of £7,008,000 in contract work in
progress, an increase of £13,324,000 in trade and other receivables, and an
increase in the gross cash balance of £10,450,000.
Retention balances, contained within trade and other receivables outstanding
at the year end, were £4,848,000 (2022: £2,198,000). It is anticipated
that £3,840,000 will be received within one year and £1,008,000 in greater
than one year. Disappointingly, main contractor clients are being more
insistent upon the holding of cash retention rather than the taking of an
appropriate retention bond in order to maintain and preserve their cash
resources. The company is driven to work with the wider construction industry
to abolish cash retentions.
Trade and other payables increased by £6,437,000. Within this, trade
payables and accruals increased £1,998,000 and £1,854,000 respectively with
contract liabilities increasing £346,000 and social security and other taxes
and other payables increasing £296,000.
Total equity increased by £13,491,000 in the year to £47,838,000. 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
2023 2022
£'000 £'000
Group profit after tax 10,325 4,734
Depreciation 2,215 2,044
Capital expenditure (2,899) (4,516)
Investment property movement (120) (404)
Tax (paid)/received (2,591) 192
Tax per income statement 3,063 1,095
Decrease/(increase) in working capital 1,853 (2,064)
Dividends (1,900) (363)
Repayment of bank and other loans (750) (250)
Share based payment charge 939 806
Others 315 (22)
Net cash inflow 10,450 1,252
Cash and cash equivalents at beginning of year 11,634 10,382
Cash and cash equivalents at end of year 22,084 11,634
Dividends of £1,900,000 were paid in the year.
A dividend has been proposed in respect of the 2023 financial year of 33 pence
per share (£4,268,000), covered 2.56 times earnings and will be paid to
shareholders in July 2024 upon approval at the AGM. The dividend is split as
an ordinary dividend of 20 pence per share and an exceptional dividend of 13
pence per share, reflective of the outstanding performance of the Group in the
year.
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:
2023 2022
£'000 £'000
Inventories and contract work in progress 8,116 16,882
Trade and other receivables 23,582 10,258
Trade and other payables (28,481) (22,044)
Working capital at end of year 3,217 5,096
Cash balances at the year end totaled £22,084,000 and there were no property
loans outstanding (2022: £750,000) following their repayment, representing a
net cash position of £22,084,000 (2022: £10,884,000).
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.
2024 and 2025 will see the conclusion of the 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
2023 2022
£'000 £'000
Scheme assets 6,611 6,820
Scheme liabilities (4,740) (4,646)
Surplus 1,871 2,174
Other finance income/(expense) 37 (13)
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 2023 was
completed on 16 November 2023. The position of the scheme as at the date of
the valuation was an asset position of £6,834,000 and a liability position of
£5,006,000 resulting in a surplus of £1,828,000 (2020: £272,000). At the
previous 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 assets of the scheme have since been
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 2026.
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 928,718 (2022: 993,669) share options outstanding
at an average exercise price of £0.05 (2022: £0.14) 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
£939,000 (2022: £806,000).
Trevor Taylor
Chief Financial Officer
15 April 2024
Consolidated income statement for the year ended 31 December 2023
2023 2022
£'000 £'000
Revenue 132,495 86,614
Raw materials and consumables (78,182) (51,277)
Other external charges (6,053) (4,792)
Staff costs (25,536) (19,566)
Depreciation (2,215) (2,044)
Other operating charges (7,263) (3,024)
(119,249) (80,703)
Operating profit 13,246 5,911
Finance income 224 26
Finance costs (82) (108)
Net finance income/(expense) 142 (82)
Profit before tax 13,388 5,829
Tax (3,063) (1,095)
Profit for the year 10,325 4,734
Profit for the year attributable to equity holders of the parent company 10,325 4,734
Basic earnings per share 84.4 p 39.1 p
Diluted earnings per share 79.3 p 37.8 p
All results arose from continuing operations.
The principal accounting policies and notes form part of these Group financial
statements.
Consolidated statement of comprehensive income for the year ended 31 December
2023
2023 2022
£'000 £'000
Profit for the year 10,325 4,734
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss
Revaluation of land and buildings 5,868 -
Movement on deferred tax relating to revaluation (1,467) -
Remeasurement of net defined benefit pension surplus (340) (486)
Movement on deferred tax relating to pension surplus 85 122
4,146 (364)
Items that will be reclassified subsequently to profit or loss
Loss on foreign currency forward contracts (31) -
(31) -
Other comprehensive income/(expense), net of tax 4,115 (364)
Total comprehensive income for the year attributable to equity holders of the 14,440 4,370
parent company
The principal accounting policies and notes form part of these Group financial
statements.
Consolidated statement of financial position as at 31 December 2023
2023 2022
£'000 £'000 £'000 £'000
Assets
Non current assets
Property, plant and equipment 25,329 19,264
Investment property 614 464
Pension asset 1,871 2,174
Total non current assets 27,814 21,902
Current assets
Inventories 1,576 3,334
Contract work in progress 6,540 13,548
Trade and other receivables 23,582 10,258
Cash and cash equivalents 22,084 11,634
Total current assets 53,782 38,774
Total assets 81,596 60,676
Liabilities
Current liabilities
Borrowings - 250
Trade and other payables 28,481 22,044
Lease liabilities 157 143
Current tax liabilities 447 69
Derivative financial instruments 31 -
Total current liabilities 29,116 22,506
Non current liabilities
Borrowings - 500
Lease liabilities 1,641 1,798
Deferred tax liabilities 3,001 1,525
Total non current liabilities 4,642 3,823
Total liabilities 33,758 26,329
Net assets 47,838 34,347
Equity
Share capital 1,293 1,293
Share premium 1,864 1,864
Capital redemption reserve 132 132
Other components of equity 3,847 (761)
Retained earnings 40,702 31,819
Total equity 47,838 34,347
Consolidated statement of changes in equity for the year ended 31 December
2023
Share capital Share premium Capital redemption reserve Other Retained earnings Total
components of equity 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 - - - - (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)
Deferred tax on pension - - - - 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
Share capital Share premium Capital redemption reserve Other components of equity Retained earnings Total
equity
£'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2023 1,293 1,864 132 (761) 31,819 34,347
Transactions with owners
Dividends - - - - (1,898) (1,898)
Credit relating to equity-settled share based payments - - - - 939 939
ESOT movement in year - - - 238 (228) 10
Transactions with owners - - - 238 (1,187) (949)
Profit for the financial year - - - - 10,325 10,325
Other comprehensive income
Actuarial losses recognised in the pension scheme - - - - (340) (340)
Deferred tax on pension - - - - 85 85
Financial instruments - - - (31) - (31)
Revaluation of land and buildings - - - 5,868 - 5,868
Deferred tax on revaluation - - - (1,467) - (1,467)
Total comprehensive income for the year - - - 4,370 10,070 14,440
At 31 December 2023 1,293 1,864 132 3,847 40,702 47,838
The Group retained earnings reserve includes a surplus of £1,403,000 (2022 -
£1,630,000) relating to the net pension surplus.
The principal accounting policies and notes form part of these Group financial
statements.
Consolidated cash flow statement for the year ended 31 December 2023
2023 2022
£'000 £'000
Cash flows from operating activities
Group profit after tax 10,325 4,734
Taxation (paid)/received (2,591) 192
Interest received 187 26
Depreciation on property, plant and equipment 2,215 2,044
Fair value adjustment of investment properties (30) -
Impairment of property, plant and equipment 372 -
Share based payment charge 939 806
Profit on sale of property, plant and equipment (243) (309)
Taxation charge recognised in income statement 3,063 1,095
Net finance (income)/expense (142) 82
Decrease/(increase) in inventories 1,758 (1,440)
Decrease/(increase) in contract work in progress 7,008 (3,291)
(Decrease)/increase in trade and other receivables (13,324) 1,958
Increase in trade and other payables 6,411 709
Net cash flow from operating activities 15,948 6,606
Cash flows from investing activities
Purchase of property, plant and equipment (2,899) (4,516)
Purchase of investment property (120) (404)
Proceeds from sale of property, plant and equipment 386 348
Net cash flow from investing activities (2,633) (4,572)
Cash flows from financing activities
Interest paid (82) (95)
Repayment of bank and other loans (750) (250)
Capital element of leasing payments (143) (74)
Dividends paid (1,900) (363)
Employee Share Ownership Plan share sales 10 -
Net cash flow from financing activities (2,865) (782)
Net increase in cash and cash equivalents 10,450 1,252
Cash and cash equivalents at beginning of year 11,634 10,382
Total cash and cash equivalents 22,084 11,634
The principal accounting policies and notes form part of these Group financial
statements.
Notes forming part of the Group financial statements for the year ended 31
December 2023
1. Basis of preparation
The financial information in this preliminary announcement has been prepared
in accordance with accounting policies which are based on UK-adopted
international accounting standards (IFRS) and in issue and in effect at 31
December 2023.
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 2023, 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 2023 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 2022 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 2022 have been delivered to the Registrar of
Companies. The 31 December 2023 accounts were approved by the directors on 15
April 2024, but have not yet been delivered to the Registrar of Companies.
3. Earnings per share
2023 2022
Basic earnings per share 84.4 p 39.1 p
Diluted earnings per share 79.3 p 37.8 p
Basic earnings per share is calculated by dividing the profit for the year of
£10,325,000 (2022: profit for the year of £4,734,000) by 12,232,690 (2022:
12,117,190) 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 £10,325,000 (2022: profit for the year of £4,734,000) by 13,014,903
(2022: 12,507,863) 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 782,213 (2022: 386,481).
4. Reports, Accounts & AGM
The Annual Report and Accounts for the year ended 31 December 2023 will be
available on the Company's website www.billington-holdings.plc.uk
(http://www.billington-holdings.plc.uk) on 19 April 2024.
The Notice of Annual General Meeting and Annual Report and Accounts will be
sent to Shareholders and be available on the Company's website
www.billington-holdings.plc.uk (http://www.billington-holdings.plc.uk) by 6
May 2024.
The Annual General Meeting will be held on 4 June 2024 at 14.00 at Billington
Holdings Plc, Steel House, Barnsley Road, Wombwell, Barnsley, S73 8DS.
5. Segmental Information
The Group trading operations of Billington 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 2023 Structural Steelwork Safety Other Total
£'000
Solutions
£'000
£'000
£'000
Revenue
From external customers 121,545 10,949 1 132,495
From other segments 38 541 - 579
Segment revenues 121,583 11,490 1 133,074
Elimination of segment revenues (579)
Revenue 132,495
Raw materials and consumables (74,046) (4,136) - (78,182)
Other external charges (4,152) (1,901) - (6,053)
Staff costs (20,118) (2,179) (3,239) (25,536)
Depreciation (1,233) (593) (389) (2,215)
Other operating (charges)/income (9,310) (1,095) 3,142 (7,263)
Segment operating profit/(loss) 12,724 1,586 (485) 13,246
Additions to non-current assets 1,636 863 428 2,927
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
Additions to non-current assets 5,729 367 462 6,558
6. Dividend
A final dividend in respect of 2022 of 15.5 pence (£1,900,000) per ordinary
share was paid on 4 July 2023. No interim dividends were paid in 2023. A final
dividend has been proposed in respect of 2023 of 33.0 pence (£4,268,000) per
ordinary share. As the distribution of dividends by Billington requires
approval at the shareholders' meeting, no liability in this respect is
recognised in the consolidated financial statements.
In accordance with the Company's Articles of Association a write-back of
£2,000 (2022: £142,000) has been recognised during the year relating to
unclaimed dividends over 12 years old.
7. Going Concern
The 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 and its continued positive trading
performance in 2023 are detailed in the Financial Review and they demonstrate
the robust position of the Group heading into 2024.
The Group has a gross cash balance of £22.1 million as at 31 December 2023
with no long-term borrowings or commitments. The Group repaid its only
remaining borrowing at the start of the year, 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.
Since the year end the Group has entered into an agreement with HSBC, the
Company's bankers for a £6.0 million Revolving Credit Facility for 3 years to
March 2027, which provides further funding and headroom security.
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 Group has secured a number of significant contracts in 2024 for delivery
in 2024 and 2025 and has a record orderbook as at March 2024.
The Group anticipates making further progress in terms of volumes and
efficiency enhancements in 2024. The Directors are forecasting trading
performance will continue to improve in comparison to historical levels,
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 2025, 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 additional 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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