TIDMBILN
RNS Number : 1854N
Billington Holdings PLC
23 September 2019
23 September 2019
Billington Holdings Plc
("Billington", the "Group" or the "Company")
Interim Results
Billington Holdings Plc (AIM: BILN), one of the UK's leading
structural steel and construction safety solutions specialists, is
pleased to announce its unaudited interim results for the six
months ended 30 June 2019.
Unaudited six Unaudited Percentage
months to 30 six months Movement
June 2019 to 30 June
2018
Revenue GBP47.15m GBP39.39m 19.7%
-------------- ------------ -----------
EBITDA GBP3.55m GBP2.54m 39.8%
-------------- ------------ -----------
Profit before tax GBP2.68m GBP1.94m 38.1%
-------------- ------------ -----------
Cash and cash equivalents GBP10.01m GBP7.56m 32.4%
-------------- ------------ -----------
Earnings per share (EPS) from continuing
operations 17.80p 12.80p 39.1%
-------------- ------------ -----------
Highlights
-- Record revenue, with an increase of 19.7 per cent to GBP47.15
million (H1 2018: GBP39.39 million)
-- Profit before tax increased 38.1 per cent to GBP2.68 million
(H1 2018: GBP1.94 million)
-- EPS increased 39.1 per cent to 17.80 pence
-- Further positive cash growth
-- Continued investment in the safety solutions businesses
-- All Group companies have performed well over the period, with
momentum from 2018 continuing into the current year
-- Continued, successful delivery of large European project with
prospect for future works
-- Billington Structures was awarded two contracts with a combined
value of GBP30 million in June 2019 ensuring production volumes
are likely to remain at similar levels
Mark Smith, Chief Executive of Billington, commented:
"I am very pleased with the Group performance in the first half
of the year, continuing the strong momentum from 2018. We started
the year with a record order book and consequently the first half
has been a very busy period for the Group across all our
businesses. We have continued to build our order book with further
significant contracts secured.
"Whilst the overall market continues to be uncertain, the
outlook for Billington remains positive, particularly given the
Group's ability to target a diverse range of projects insulating
us, in part, from any temporary slowdowns in the market. I look
forward to the remainder of the year and beyond with cautious
optimism."
For further information please contact:
Billington Holdings Plc Tel: 0122 634 0666
Mark Smith, Chief Executive
Trevor Taylor, Finance Director
WH Ireland Limited Tel: 0207 220 1666
Chris Hardie
James Sinclair-Ford
Jasper Berry
IFC Advisory Limited Tel: 0203 934 6630
Tim Metcalfe
Graham Herring
Zach Cohen
Chief Executive Statement
Introduction
All the Group companies have experienced a strong start to the
year and it has been a good first half for the Company. A number of
large projects have been undertaken, resulting in revenues
increasing by 19.7 per cent to GBP47.15 million for the period.
For the remainder of 2019 the Group has a very strong order book
and we anticipate further progress in the second half, whilst
mindful of the continuing uncertainty in our markets as a result of
the UK's impending exit from the European Union.
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 11,000 tonnes. With facilities in Barnsley
and Bristol and a heritage dating back over 70 years, the business
is well recognised and respected in the industry with the capacity
of processing over 35,000 tonnes of steel per annum.
The Shafton facility was acquired in 2015 and has been fully
integrated into Group operations. Alongside the successful
integration, two separate business areas have been developed on the
site. The first undertakes activities for Billington Structures and
has continued to enjoy a strong performance driven by high
production volumes. The second, Shafton Steel Services, offers a
complete range of steel profiling services to a large number of
diverse external engineering and construction companies, providing
further opportunities to increase the capacity of the current
business units as well as allowing for the development of new,
value added, complementary products and services to enhance the
comprehensive offering of the Group.
During the first half of the year the business has traded very
strongly, particularly through the execution of the GBP41 million
of contracts announced in November 2018. This momentum is
continuing into the second half as these and other contracts move
towards completion, with a further GBP30 million of large contracts
secured in June 2019. Billington Structures has a substantially
full order book for the remainder of the year and the focus will be
on both the successful completion of existing contracts and the
securing of new business for 2020 and beyond.
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, commercial offices,
education, healthcare, rail and many more.
In the first half of 2019 the business delivered another good
performance, fulfilling a smaller number of larger contracts for
principal contractors, Billington and other steelwork
companies.
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.
In the first half the business delivered another strong
performance, carrying on from the progress made in 2017 and 2018.
This is expected to continue in the second half as easi-edge
continues to benefit from a strong order book.
Further investments have been made in the business, adding to
the stock available for hire, reflecting the market demand for
easi-edge's solutions, one of the higher margin segments for the
Group.
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.
Under the new leadership introduced last year the business
continues to thrive and the momentum gained in 2018 has continued
in the first half. Significant progress continues to be made to
establish the product as the number one choice for main contractors
and developers in the construction industry. There has been a
particular focus on growing the business in the residential
construction market, where hoard-it's range of printed boards and
panels are proving attractive to developers looking for a
professional and promotional site image.
Financial Results
Revenue and Profit Before Tax
Group revenue increased by 19.7 per cent over the period to
GBP47.15 million (H1 2018: GBP39.39 million). This increase has
been as a result of growth across all of the Group's businesses, in
particular aided by the GBP41 million of new contract awards in
November 2018.
Billington's profit before tax for the period was GBP2.68
million (H1 2018: GBP1.94 million), an increase of 38.1 per
cent.
Earnings per Share
Earnings per share for continued operations for the first half
of the year increased by 39.1 per cent to 17.80 pence (H1 2018:
12.80 pence).
Liquidity and Capital Resources
The Group's gross cash and cash equivalents as at 30 June 2019
was GBP10.01 million, an increase of 7.5 per cent on the balance as
at 31 December 2018. The Company expects that its operations will
remain cash generative in the second half further reinforcing its
solid cash position.
Capital expenditure
The Group continued to invest across all its sites and business
areas and capital expenditure modestly increased in the first half
compared to the same period in 2018. The Group has in place
long-term capital equipment replacement programmes and aims to be
at the forefront of technological advances where they can add
value.
A number of key items of machinery have been identified for
replacement over the medium term and therefore a modest level of
increase in the current level of capital expenditure is expected.
Continuous investment in the Group's capital assets will ensure
that the products the Company produces are produced efficiently and
of a quality our clients demand.
Dividend
In the first half of 2019 Billington Holdings Plc declared a
final dividend of 13.0 pence per share amounting to GBP1,565,000
(2018: 11.5 pence, GBP1,385,000) to its equity shareholders. No
interim dividend for 2019 has been declared (2018: nil).
Market and Economic Outlook
The markets in which Billington operates remain unsettled, with
a mixed environment for the main construction contractors. I am
pleased to report that the Group has limited exposure to the more
troubled larger contractors and we continue to assess the risks
associated with individual projects on a case by case basis. To
date we have been able to secure credit insurance on acceptable
terms for all our significant projects.
Should the UK leave the European Union on 31 October 2019, the
Group has plans in place to mitigate, as far as possible, the
effects of any short-term disruption to supply and the fulfilment
of European orders.
We continue to monitor the situation at British Steel with
interest. It is currently envisaged that a successful sale will be
completed imminently and this will assist in returning stability to
the UK steel supply market. However, the Group continues to keep
its steel supply options under review. The Group's requirements for
a wide range of steel products are sourced from a variety of
worldwide producers and local stockholders to mitigate the
associated risk.
Prospects and Outlook
The Group has had a very busy and successful first half of the
year. Whilst the overall market continues to be uncertain, the
outlook for Billington remains positive, particularly given the
Group's ability to target both the largest and medium contracts,
insulating us, in part, from any temporary disruption in the
market.
The Group has gained further large contracts during the first
half that will be executed in the second half and into 2020. Our
order book remains at strong levels and we continue to see a number
of significant prospects and coupled with a healthy balance sheet
we are well positioned for the future and remain cautiously
optimistic.
In closing I would like to thank Billington's Board, employees,
shareholders and stakeholders for their continued support, and I
look forward to a busy and bright second half of the year.
Mark Smith
Chief Executive
20 September 2019
Condensed consolidated interim income statement
Six months ended 30 June 2019
Unaudited Unaudited Audited
Six months Six months Twelve months
to 30 June to 30 June to 31 December
2019 2018 2018
GBP'000 GBP'000 GBP'000
Continuing operations
Revenue, excluding movements in work in progress 48,352 39,229 76,462
(Decrease)/Increase in work in progress (1,204) 160 804
Revenue 47,148 39,389 77,266
=========== =========== ===============
Raw material and consumables 31,855 26,413 49,826
Other external charges 2,489 1,819 3,296
Staff costs 8,304 7,512 15,258
Depreciation 862 586 1,502
Other operating charges 953 1,103 2,383
---------------
44,463 37,433 72,265
----------- ----------- ---------------
Group operating profit 2,685 1,956 5,001
Share of post tax profit in joint ventures - - -
----------- ----------- ---------------
Total operating profit 2,685 1,956 5,001
Net finance expense (6) (17) (58)
Profit before tax 2,679 1,939 4,943
Tax (531) (395) (894)
Profit for the period from continuing operations and attributable to
equity holders of the
parent company 2,148 1,544 4,049
=========== =========== ===============
Earnings per share (basic and diluted) from continuing operations 17.8 p 12.8 p 33.6 p
=========== =========== ===============
Earnings per ordinary share has been calculated on the basis of the result for the period
after tax, divided by the weighted average number of ordinary shares in issue in the period,
excluding those held in the ESOP Trust, of 12,040,608. The comparatives are calculated by
reference to the weighted average number of ordinary shares in issue which were 12,048,608
for the period to 30 June 2018 and 12,040,608 for the year ended 31 December 2018.
Condensed consolidated interim statement of
comprehensive income
Six months ended 30 June 2019
Unaudited Unaudited Audited
Six months Six months Twelve
to 30 to 30 months
June June to 31 December
2019 2018 2018
GBP'000 GBP'000 GBP'000
Profit for the period 2,148 1,544 4,049
Other comprehensive income
Remeasurement of net defined benefit
surplus - - (532)
Movement on deferred tax relating
to pension liability - - 97
Current tax relating to pension liability - - (7)
Cash flow hedging - current year
profit/(loss) 514 - (831)
Other comprehensive income, net of
tax 514 - (1,273)
Total comprehensive income for the
period attributable to equity holders
of the parent company 2,662 1,544 2,776
Condensed consolidated interim balance sheet
As at 30 June 2019
Unaudited Unaudited Audited
30 June 30 June 31 December
2019 2018 2018
GBP'000 GBP'000 GBP'000
Assets
Non current assets
Property, plant and equipment 14,109 13,571 14,042
Pension asset 1,630 2,198 1,630
Investment in joint ventures - - -
Deferred tax asset 41 121 39
Total non current assets 15,780 15,890 15,711
---------- ---------- ------------
Current assets
Inventories and work in progress 10,755 11,115 12,011
Trade and other receivables 13,821 8,302 7,527
Cash and cash equivalents 10,008 7,562 9,311
Total current assets 34,584 26,979 28,849
---------- ---------- ------------
Total assets 50,364 42,869 44,560
---------- ---------- ------------
Liabilities
Current liabilities
Current portion of long term borrowings 250 250 250
Trade and other payables 23,292 18,037 18,732
Current tax payable 785 498 627
Total current liabilities 24,327 18,785 19,609
---------- ---------- ------------
Non current liabilities
Long term borrowings 1,375 1,627 1,500
Deferred tax liabilities - 287 -
Total non current liabilities 1,375 1,914 1,500
---------- ---------- ------------
Total liabilities 25,702 20,699 21,109
---------- ---------- ------------
Net assets 24,662 22,170 23,451
========== ========== ============
Equity
Share capital 1,293 1,293 1,293
Share premium 1,864 1,864 1,864
Capital redemption reserve 132 132 132
Other reserve (1,161) (844) (1,675)
Accumulated profits 22,534 19,725 21,837
Total equity 24,662 22,170 23,451
========== ========== ============
Condensed consolidated interim
statement of changes in equity
(Unaudited) Share Capital Other Accumulated Total
Share
capital premium redemption components profits equity
account reserve of equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2018 1,293 1,864 132 (844) 19,531 21,976
Equity dividends - - - - (1,385) (1,385)
Credit related to equity-settled
share based payments - - - - 35 35
Transactions with owners - - - - (1,350) (1,350)
Profit for the six months
to 30 June 2018 - - - - 1,544 1,544
Total comprehensive
income for the period - - - - 1,544 1,544
At 30 June 2018 1,293 1,864 132 (844) 19,725 22,170
At 1 July 2018 1,293 1,864 132 (844) 19,725 22,170
Credit related to equity-settled
share based payments - - - - 49 49
ESOP movement in period - - - - - -
Transactions with owners - - - - 49 49
Profit for the six months
to 31 December 2018 - - - - 2,505 2,505
Other comprehensive
income
Actuarial gain recognised
in the pension scheme - - - - (532) (532)
Income tax relating
to components of other
comprehensive income - - - - 90 90
Financial instruments - - - (831) - (831)
Total comprehensive
income for the period - - - (831) 2,063 1,232
At 31 December 2018 1,293 1,864 132 (1,675) 21,837 23,451
At 1 January 2019 1,293 1,864 132 (1,675) 21,837 23,451
Equity dividends - - - - (1,565) (1,565)
Credit related to equity-settled
share based payments - - - - 114 114
Transactions with owners - - - - (1,451) (1,451)
Profit for the six months
to 30 June 2019 - - - - 2,148 2,148
Other comprehensive
income
Actuarial loss recognised
in the pension schemes - - - - - -
Financial instruments - - - 514 - 514
Total comprehensive
income for the period - - - 514 2,148 2,662
At 30 June 2019 1,293 1,864 132 (1,161) 22,534 24,662
Condensed consolidated interim cash
flow statement
Six months ended 30 June 2019
Unaudited Unaudited
Six months Six months Audited
to 30 to 30 Twelve months
June June to 31 December
2019 2018 2018
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Group profit after tax 2,149 1,544 4,049
Taxation paid (376) (360) (843)
Interest received - - 23
Depreciation on property, plant and
equipment 862 586 1,502
Share based payment charge 114 35 84
Profit on sale of property, plant
and equipment (112) (150) (274)
Taxation charge recognised in income
statement 531 395 894
Net finance expense 6 17 58
Decrease/(Increase) in inventories
and work in progress 1,256 (103) (999)
Increase in trade and other receivables (6,294) (2,602) (1,827)
Increase in trade and other payables 4,803 2,083 1,944
Net cash flow from operating activities 2,953 1,445 4,611
Cash flows from investing activities
Purchase of property, plant and equipment (657) (573) (1,962)
Proceeds from sale of property, plant
and equipment 112 156 283
Net cash flow from investing activities (545) (417) (1,679)
Cash flows from financing activities
Interest paid (21) (17) (45)
Repayment of bank and other loans (125) (127) (250)
Equity dividends paid (1,565) (1,385) (1,385)
Capital element of hire purchase
payments - - (4)
Net cash flow from financing activities (1,711) (1,529) (1,684)
Net increase in cash and cash equivalents 697 (501) 1,248
Cash and cash equivalents at beginning
of period 9,311 8,063 8,063
Cash and cash equivalents at end
of period 10,008 7,562 9,311
Notes to the interim accounts - as at 30 June 2019
Segmental Reporting
The Group trading operations of Billington Holdings plc are in
Structural Steel and Safety Solutions, and all are continuing. The
Structural Steel segment includes the activities of Billington
Structures Limited and Peter Marshall Steel Stairs Limited, and 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.
From 31 December 2018 the Company apportioned its activities
between two operating segments, Structural Steel and Safety
Solutions. The segmental reporting has been restated for the
comparative period of 30 June 2018.
Unaudited Unaudited Audited
Six months Six months Twelve months
to 30 June to 30 June to 31 December
2019 2018 2018
GBP000 GBP000 GBP000
Analysis of revenue (including movement in
WIP)
Structural Steel 43,351 36,207 70,164
Safety Solutions 3,797 3,182 7,102
Other 0 0 0
Consolidated total 47,148 39,389 77,266
============ ============ ===============
Analysis of Group operating profit before finance cost
Structural Steel 1,966 1,277 3,631
Safety Solutions 733 599 1,368
Other (14) 80 2
Consolidated total 2,685 1,956 5,001
============ ============ ===============
Basis of preparation
These consolidated interim financial statements are for the six months
ended 30 June 2019. They have been prepared with regard to the requirements
of IFRS. The financial information set out in these consolidated interim
financial statements does not constitute statutory accounts as defined
in S434 of the Companies Act 2006. They do not include all of the information
required for full annual financial statements and should be read in
conjunction with the consolidated financial statements of the Group
for the year ended 31 December 2018 which contained an unqualified audit
report and have been filed with the Registrar of Companies. They did
not contain statements under S498 of the Companies Act 2006.
These consolidated interim financial statements have been prepared under
the historical cost convention. The accounting policies have been applied
consistently throughout the Group for the purposes of preparation of
these consolidated interim financial statements.
New Standards adopted as at 1 January
2019
The Group has adopted the new accounting pronouncements which have become
effective this year, and are as follows:
IFRS 16 'Leases'
IFRS 16 Leases replaces IAS 17 Leases along with three Interpretations
(IFRIC 4 Determining whether an Arrangement contains a Lease, SIC 15
Operating Leases-Incentives and SIC 27 Evaluating the Substance of Transactions
Involving the Legal Form of a Lease). The standard is mandatory for
reporting periods beginning on or after 1 January 2019.Under the new
standard, an asset (the right-of-use asset) and a financial liability
are recognised. The only exceptions are short term and low value leases.
Billington Holdings Plc has applied the modified retrospective approach
to the transition to IFRS 16, recognising the cumulative effect at the
date of initial application (1 January 2019) as an adjustment to the
opening balance of retained earnings for the current period. The adjustment
amounted to GBPnil. Prior periods have not been restated. On transition,
for leases previously accounted as operating leases with a lease term
of less than 12 months and for leases of low-value assets, the Group
has applied the optional exemptions in the standard to not recognise
right-of-use assets but to account for the lease expense on a straight-line
basis over the remaining lease term.
The Group has elected not to include initial direct costs in the measurement
of the right-of-use asset for operating leases in existence at the date
of initial application of IFRS 16. The Group also elected to measure
the right-of-use assets at an amount equal to the lease liability adjusted
for any prepaid or accrued lease payments that existed at the date of
transition. Instead of performing an impairment review on the right-of-use
assets at the date of initial application, the Group has relied on its
historic assessment as to whether leases were onerous immediately before
the date of initial application of IFRS 16 and has benefited from the
use of hindsight for determining lease term when considering options
to extend and terminate leases. The Group has also elected not to reassess
whether a contract is, or contains, a lease at the date of initial application.
Instead, for contracts entered into before the transition date the Group
relied on its assessment made applying IAS 17 Leases and IFRIC 4 Determining
whether an arrangement contains a lease.
On transition to IFRS 16 the weighted average incremental borrowing
rate applied to lease liabilities recognised under IFRS 16 was 2.5%.
The impact of the adoption of this standard and the new accounting policy
was as follows:
Recognition of Right of Use Assets 282
Recognition of Lease liabilities (282)
Reduction in operating lease costs (86)
Additional depreciation 84
Additional interest charges 4
Operating lease commitments disclosed
at 31 Dec 18:
Land & Buildings 128,000
Other 233,000
Lease commitments discounted using the incremental borrowing
rate:
Land & Buildings 125,000
Other - recognised under IFRS 16 157,000
------------
Opening lease liability under IFRS
16 282,000
Other - not recognised as small
or short
Other pronouncements 72,000
Other accounting pronouncements which have become effective from 1 January
2019 and have therefore been adopted do not have a significant impact
on the Group's financial results or position.
Dividends
In the first half of 2019 Billington Holdings Plc declared a final dividend
of 13.0 pence per share amounting to GBP1,565,000 (2018: 11.5 pence,
GBP1,385,000) to its equity shareholders. No interim dividend for 2019
has been declared (2018: nil).
These results were approved by the Board of Directors on 20 September
2019.
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END
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