TIDMBILN
RNS Number : 2563K
Billington Holdings PLC
21 April 2020
21 April 2020
Billington Holdings Plc
("Billington" or the "Company" or the "Group")
Results for the year ended 31 December 2019
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 2019.
31 December 31 December Change
2019 2018
Revenue GBP104.9m GBP77.3m +35.7%
------------ ------------ -------
EBITDA GBP7.8m GBP6.1m +27.9%
------------ ------------ -------
Profit before tax GBP5.9m GBP4.9m +20.4%
------------ ------------ -------
Cash and cash equivalents GBP17.9m GBP9.3m +92.5%
------------ ------------ -------
Earnings per share from continuing
operations 39.8p 33.6p +18.5%
------------ ------------ -------
Highlights
-- Revenue increased by 35.7 per cent to a record GBP104.9
million for the Group (2018: GBP77.3 million)
-- Profit before tax increased 20.4 per cent to GBP5.9 million (2018: GBP4.9 million)
-- Cash balance of GBP17.9 million (2018: GBP9.3 million) at the
year end with an average gross cash balance of GBP10.7 million
throughout 2019
-- All Group companies have performed well during the year with
a number of large projects undertaken in the UK and Europe
-- Dividend suspended to further preserve cash resources
-- Current market outlook remains uncertain as a result of the impact of Covid-19
Mark Smith, Chief Executive Officer, commented:
"I am very pleased that we have delivered a record performance
in 2019, although these results will inevitably be overshadowed by
the current global Covid-19 pandemic. As a business we continue to
follow the UK Government's advice and direction, but until the
situation stabilises it is not possible to forecast the ultimate
impact on our business.
"The conclusion of 2019 witnessed a softening of the structural
steelwork market as the UK approached the General Election in
December. Pricing pressures continued into the early part of 2020.
Whilst we had expected this to subside in the medium term as
political and economic clarity returned, we are now faced with the
uncertainties created by the Covid-19 pandemic.
"However, 2019 was an exceptional year for the Group and
highlights the Groups capabilities and capacity to deliver for our
customers. We are in a financially robust position and are well
placed to face the challenges ahead."
For further information please contact:
Billington Holdings Plc Tel: 01226 340 666
Mark Smith, Chief Executive
Trevor Taylor, Chief Financial
Officer
W H Ireland Limited Tel: 020 7220 1666
Chris Hardie
James Sinclair-Ford
Jasper Berry
IFC Advisory Limited Tel: 0203 934 6630
Tim Metcalfe
Graham Herring
Zach Cohen
About Billington Holdings Plc
Billington Holdings Plc (AIM: BILN), one of the UK's leading
structural steel and construction safety solutions specialists, is
a UK based group of companies focused on its 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.
Chairman's Statement
I am pleased to report that in 2019 Billington achieved a record
performance. Revenue increased by 35.7 per cent to GBP104.9 million
(2018: GBP77.3 million) and profit before tax increased by 20.4 per
cent to GBP5.9 million (2018: GBP4.9 million).
The overall Earnings Per Share (EPS) for the year amounted to
39.8 pence compared with 33.6 pence in 2018, an 18.5 per cent
increase. Our balance sheet continued to strengthen with Net Assets
of GBP28.1 million at 31 December 2019 (31 December 2018: GBP23.5
million), driven by strong cash generation leading to a gross cash
balance of GBP17.9 million at 31 December 2019 (31 December 2018:
GBP9.3 million), providing a solid foundation for the Group to
progress.
Sadly, after such a positive year we are now faced with the
serious potential consequences of Covid-19. Since the escalation of
the pandemic, the Board has been focused on taking actions to
preserve cash and protect liquidity in a way that does not
compromise the long-term prospects of the business. These include
the deferral of all non-essential capital expenditure, a hiring
freeze, cost reductions, agreed additional banking facilities,
deferral of VAT payments and utilisation of the UK Government's Job
Retention Scheme. In addition, the Board has decided to suspend
payment of the dividend which would ordinarily have been paid to
shareholders in July 2020. We understand the importance of the
dividend to our shareholders and will keep our dividend policy
under review in the coming months.
The Board believe these actions to be prudent with the uncertain
economic outlook, notwithstanding the non-discretionary nature of
much of our work and the covenant strength of our customers.
Nevertheless, at this stage we are not able to quantify the impact
on our full year results and consequently the Board does not
believe it would be appropriate to provide forward looking
financial guidance until greater clarity returns.
In 2019 there was a slight reduction in the Group operating
margin to 5.7 per cent (2018: 6.3 per cent), reflecting the nature
of the contracts undertaken during the year and some pricing
pressure in the structural steel business, particularly in the
later part of the year. However, we continue to seek cost savings
and the opportunity for margin improvement where appropriate.
Whilst margin pressures remain in the structural steel market, we
believe our continued focus on, and delivery of, larger contracts
leaves the Company well positioned for the future.
During the year our structural steel businesses, Billington
Structures and Shafton Steel Services operated at near full
capacity, delivering a number of exceptional projects, improving
productivity and further increasing the range of services we can
offer our clients. The conclusion of 2019 noted an increasingly
competitive market and as Covid-19 has become more prevalent a
small number of contract commencements have been deferred.
The easi-edge perimeter edge protection and fall prevention
business had its best ever year, with further investment in stock,
high utilisation and new customer wins. The business entered 2020
with a good degree of forward visibility, although more recently
has noted some project delays that could impact the utilisation of
its products during 2020.
Peter Marshall Steel Stairs again achieved a strong performance,
continuing to focus on securing larger contracts with our partner
clients. We continue to invest in the business and while the
orderbook remains satisfactory a number of contract delays have
been noted.
hoard-it continued to grow and in 2019 recorded its best
performance to date. With an excellent market position and a focus
on expanding the business into the residential construction market,
the outlook remains positive in what is a competitive and price
sensitive market.
Pension Scheme
The defined benefit pension (closed to future accrual in 2011)
has performed well in the period with an increased surplus, despite
a backdrop of continued volatility in the equity market. At 31
December 2019 a surplus of GBP2,205,000 (2018: GBP1,630,000) along
with a corresponding deferred tax liability of GBP375,000, has
resulted in a net recognised surplus of GBP1,830,000 (2018:
GBP1,353,000).
Dividend
2019 was an exceptional year for the Group and the Board, under
ordinary circumstances would have sought to maintain its
progressive dividend policy. However, prudently, we have resolved
to suspend the dividend at this time.
Liquidity and capital reserves
There has been a significantly increased net cash inflow of
GBP8.5 million during the year (2018: GBP1.2 million) resulting in
gross cash balances of GBP17.9 million at the year end. Going
forward the Group's cash performance provides strong cover for its
working capital requirements and a robust position from which to
take the Group forward. Capital expenditure for 2020 is forecast to
increase as the Group seeks to further enhance its manufacturing
capabilities, and to replace some aged capital equipment when it is
prudent to do so.
Board movements and Our People
2019 was my first full year as Chairman of the Company and I
have been extremely impressed by the skills, dedication and
commitment to Billington shown by our people. I would like to take
this opportunity to thank all our workforce for their efforts in
2019 and I know they will continue to deliver exceptional
performances for Billington, particularly in the light of the new
challenges we are facing.
During the year we increased our workforce by 5. 3 per cent . T
hrough hard work and appropriate utilisation of the available
resources we were able to deliver a 35.7 per cent increase in
revenue.
Economic Outlook
Whilst the General Election in December 2019 and the UK's
departure from the European Union (EU) at the end of January 2020
has reduced some uncertainty, a measure will remain until the
nature of the UK's future trading relationship with the EU is
resolved.
The Group does source some products from Europe, either directly
or indirectly via its network of suppliers and subcontractors, but
we are conscious of not relying on one source for key supplies to
mitigate the inherent risks to an acceptable level. The recent
purchase of British Steel by Jingye on 9 March 2020 provides the
Company and the wider steel industry with stability and increased
certainty of uninterrupted supply moving forward.
Current forecasts for the UK structural steelwork industry are
for the market to increase by 3.9 per cent in 2020 and a further
3.6 per cent in 2021 following a fall of 2.4 per cent in 2019.
These forecasts are likely to be subject to revision as the impact
of Covid-19 is assessed.
Opportunities exist across Europe and are being actively pursued
by the Company. The successful delivery of the Company's largest
project to date in Europe in 2019 demonstrates the ability of the
Group to successfully deliver significant projects outside of the
United Kingdom.
The Company remains alert and adaptable to the constantly
evolving industry, political, health and economic environment and
seeks to take measures, taking advice where appropriate, to
mitigate risks to the business as far as possible.
Current trading and outlook
The current environment is dominated by the global Covid-19
pandemic and I am pleased to report that all our facilities
currently remain operational in line with Government advice. Whilst
there has been an inevitable reduction in volumes of certain
products and services, we have taken measures to mitigate the
effect of these. Our priority is the health, safety and wellbeing
of our employees, suppliers and customers. We have taken a number
of actions, in line with government guidance, to facilitate this
and continue to monitor the situation to ensure we are employing
best practice.
Whilst the ultimate impact of the Covid-19 pandemic on industry,
the economy and Billington is uncertain, we have a robust business,
supported by a healthy balance sheet and committed workforce.
Billington remains well placed to deal with the uncertain future
ahead.
Ian Lawson
Non-Executive Chairman
20 April 2020
Chief Executive Statement
Operational Review
2019 was another record year for Billington, reflecting the
number of large projects that have been undertaken, resulting in
revenues increasing by 36 per cent to GBP104.9 million and profit
before tax increasing by 20.4 percent to GBP5.9 million . This
exceptional performance is a real credit to the tireless dedication
of our employees and I would like to thank them all for their
efforts.
All the businesses across the Group performed well and whilst we
expect the good performance to continue, we recognise that due to
the number of large contracts undertaken, 2019 was an exceptional
year.
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 12,000 tonnes to all market sectors. With
facilities in Barnsley and Bristol and a heritage dating back over
80 years, the business is well recognised and respected in the
industry with the capacity of processing over 40,000 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 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 year the business has traded very strongly,
particularly through the execution of the GBP41 million of
contracts announced in November 2018 and the further GBP30 million
of large contracts secured in June 2019.
The larger projects undertaken by Billington Structures during
2019 included:
-- Circle Square, Manchester
-- 4 Wellington Place, Leeds
-- Large Data Centre development, Europe
-- Barnsley town centre redevelopment scheme - "The Glassworks"
-- First Way, Wembley
-- Pinewood Studios, Buckinghamshire
-- Large Fulfilment Centre, North East of England
I am pleased that Billington Structures was again recognised for
a number of national awards being the public vote winner of the
2019 Tekla Awards for the Wellington Place development in Leeds and
receiving a commendation for the Ingenuity House development in
Birmingham at the 2019 Structural Steel Design Awards.
Billington Structures maintains a satisfactory order book,
providing a good degree of visibility for the remainder of the
current year and the focus is both on the successful completion of
existing contracts and the securing of new business for the
remainder of 2020 and beyond. A very good number of opportunities
exist, although there remains pricing pressure and uncertainty
within the market. It is possible that projects anticipated for
construction during the latter part of 2020 could be impacted by
delays as developers and main contractors seek a period of review
and are able to complete current projects under construction.
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.
During the year the business delivered another good performance,
fulfilling a smaller number of larger contracts than has
historically been the case, for principal contractors, Billington
and other steelwork companies. Notable projects undertaken in 2019
included:
-- 100 Liverpool Street, London
-- Ada Lovelace School, London
-- Bardon Hill, Leicestershire
-- Pinewood Studios, Buckinghamshire
-- Cobalt, Didcot
-- Large Data Centre development, Europe
-- Battersea Development, London
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 2019 the business enjoyed its best ever year, carrying on the
momentum from 2017 and 2018. The investment in stock available for
hire continued, with a new improved barrier design implemented.
easi-edge enjoyed high utilisation rates reflecting the market
demand for their solutions, one of the higher margin segments for
the Group.
Projects undertaken by easi-edge on 2019 included:
-- 4 Wellington Place, Leeds
-- Large Data Centre development, Europe
-- Circle Square, Manchester
-- Ark Blake, London
-- Blundell Street, Liverpool
-- Merseyside Police, Liverpool
-- Two New Bailey, Manchester
The business brought a strong forward order book into 2020.
Recently, as a result of Covid-19, easi-edge has noted a number of
project delays which are anticipated to affect the hire utilisation
of its products throughout the duration of the pandemic.
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 in 2018 the business
continues to grow. The momentum gained in 2018 continued in 2019,
producing a record result.
Notable projects in 2019 included:
-- Wembley Stadium
-- Circle Square, Manchester
-- Northgate House, Oxford
-- Princes Quay Street, Hull
-- Centenary Square, Birmingham
-- Edinburgh Airport
Significant progress continues to be made to establish the
product as the number one choice for main contractors,
housebuilders 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 site image.
Our People
Our workforce is at the heart and drive of everything we do, and
we continue to strive to make Billington the best employer. During
the year the Group increased its workforce by a further 5.3 per
cent to 399. They were able to deliver a 36 per cent increase in
turnover, reflecting the hard work undertaken, productivity gains
and improved utilisation of resources.
Attracting sufficient, experienced, quality people remains a
challenge across the industry. The Group therefore continues its
focus on developing its people and has a number of training
initiatives to assist in overcoming this issue. Billington
maintains close relationships with local education providers,
supporting both Barnsley College and the University of Sheffield
Engineering Department. The Company regularly attends educational
career days, hosts school visits to its sites and seeks to develop
talent from a young age with its range of internal training
programmes across all departments of the business.
Wage pressures continue to be an issue in the industry as
companies compete for talent in a limited pool. To help mitigate
against this Billington continues to actively promote its
apprenticeship and graduate schemes, which are particularly focused
on fabricator welders and technical staff. These programmes are
geared to help the business maintain the necessary skills and
expertise to meet both its current and future requirements.
Billington is an advocate, promotor and contributor to the
British Constructional Steelwork Association's CRAFT apprentice
programme. The scheme has become the default path for the Company
to train, educate and progress structural steelwork fabricators.
The scheme ensures that the Company possesses the necessary and
appropriate skills to enable it to deliver for its clients and be
at the forefront of new processes and techniques, driving
manufacturing efficiencies.
Health, Safety, Sustainability, Quality and the Environment
Billington remains committed to health, safety, sustainability,
quality and the environment. Across the Group we continue to be
actively involved in a number of initiatives both locally and
nationwide. The Group aims to be proactive in the identification,
reporting and resolution of risks both on site and in our
production facilities to ensure that we are able mitigate the risks
and promote safe ways of working.
The safety and welfare of our employees and subcontractors is of
paramount importance and is at the centre of all operations across
the Group. During 2019 the Health and Safety department was further
strengthened to ensure that continued progress can be achieved in
enhancing working practices and improving the safety culture at all
facilities and our on-site activities.
There were regrettably two lost time reportable accidents in the
year. However, the Group continued to outperform the industry
average Accident Frequency Rate (AFR), relating to our employees,
at 0.22.
Charity
Billington continues to be a significant advocate and supporter
of both local and national charities. In 2017 the Billington
Charity Foundation was established in order to focus efforts.
Billington has actively supported many charity programs for social
innovation, the fight against cancer, education and aiding sports
facilities.
Throughout 2019, Billington donated to the likes of Brain Tumour
Research, Weston Park Cancer Charity, Macmillan, The Grand Appeal
and the Alzheimer's Society. The Company has continued its annual
sponsorship of RSPB Old Moor and sponsored a good number of other
local sports clubs. Billington continued its efforts through
sponsoring the Barnsley College Student Awards and University of
Sheffield Engineering Department.
Billington actively supports a diverse range of charitable and
social causes its employees are involved with. The Group encourages
involvement in initiatives intended to improve the local areas in
which our people live.
Customers and Suppliers - Ethical Trading
The Company recognises the need to maintain a supply chain that
adheres to and is aligned with our environmental, social and
commercial objectives and policies.
Billington is committed to carrying out all dealings with
clients, suppliers, sub-contractors and its own staff in a fair,
open and honest manner. It is also committed to complying with all
legislative and regulatory requirements that are relevant to its
business activities.
The Company communicates fully and openly with customers
regarding costs of work undertaken and will provide accurate and
honest guidance and advice to customers to ensure their
requirements are met.
The Company strives to develop positive relationships with
suppliers to ensure both parties understand each other's problems
and requirements. It will not use current or potential contracts to
coerce suppliers into unsustainable offers.
The Company treats its staff fairly in all aspects of their
employment, valuing their contribution to the achievement of
Company objectives and providing them with opportunities for
training and development.
The Company is proud of its long standing and committed partner
relationships with its supply chain and in turn seeks to treat them
fairly with timely payment for works and the implementation of a
'no retention' policy.
Steel Industry
We have been closely monitoring developments at British Steel,
particularly since it was placed in the hands of the Official
Receiver in May 2019. We welcome the news that the sale of British
Steel to Chinese firm Jingye has now been completed and we welcome
the stability that a concluded sale provides to the British steel
industry. Minimal disruption was noted throughout the year as the
operations were smoothly transitioned from Greybull to the Official
Receiver.
Anticipated investment upon the completion of the purchase by
Jingye is expected to be significant as they process a number of
furnace upgrades. These investments are not only expected to
safeguard the long-term viability of the company, they will also
see them improve their products within a competitive global
market.
Throughout 2019, ongoing uncertainty about near-term business
conditions as well as high UK steel stock levels at the end of the
first quarter of 2019 prompted a larger than expected stock
decrease in the second quarter. Throughout Q3 and Q4 2019 UK steel
stock and consumption levels continued to fall, although as the
market begins to stabilise, consumption levels are expected to
recover which may have a consequential impact on price.
Coking Coal, Iron Ore and 'scrap steel', the key input costs for
steel manufacturing, also remained unpredictable throughout 2019,
leading to some fluctuations in price throughout the year for the
wide range of steel products that the Group sources from a variety
of steel producers worldwide. As stated previously, Billington
keeps its steel supply options under constant review and employs a
variety of measures to allow the Company to reduce its exposure to
unpredictability in steel prices and any variability in supply over
the short term.
Prospects and Outlook
We are delighted with the results we have achieved in 2019, an
exceptional year for the Group. However, 2020 has been dominated by
the impact of the Covid-19 pandemic.
To date, Billington has been able to remain operational, with
the majority of construction sites open and customer projects
continuing after some temporary interruptions. The health, safety
and wellbeing of all our employees, suppliers and customers has
been our primary concern and we have undertaken a full review of
our operations and working practices, making changes and
implementing new procedures where appropriate, following the latest
government guidance on tackling Covid-19.
Whilst we remain operational the Covid-19 outbreak has
inevitably led to some reductions in volumes across the Group
although more prevalently in our easi-edge, hoard-it and Peter
Marshall Steel Stairs businesses. To minimise the impact on the
Company we have taken the decision to furlough a number of staff in
these businesses as well as within Billington Structures.
Securing additional suppliers of key outsourced components and
services has been a priority, to mitigate, as far as possible, any
impact from business interruptions and closures in our supply
chain. However, it remains uncertain whether we will remain
unhindered by any issues with our supply chain as the pandemic
reaches its peak and moves to resolution.
The Covid-19 pandemic will inevitably have an impact on our
industry and customers, and whilst the ultimate outcome is
uncertain, Billington is in a strong position to navigate the
difficulties ahead and remain a significant player in the
structural steel and safety solutions markets.
Mark Smith
Chief Executive Officer
20 April 2020
Financial Review
------------------------------ ----------------------- --------------- ---------------
Consolidated Income Statement
2019 2018
--------------- ---------------
GBP'000 GBP'000
Revenue 104,911 77,266
Operating profit 5,936 5,001
Profit before
tax 5,931 4,943
Profit after
tax 4,796 4,049
Profit for shareholders 4,796 4,049
Operating profit
margin 5.7% 6.5%
Return on capital
employed 49.8% 35.2%
Earnings per share (basic) 39.8p 33.6p
Revenue increased 35.8 per cent year on year primarily as a result
of Billington Structures increasing its output, particularly in
relation to its traditional structural steelwork activities. The
Group has seen revenue increase 133 per cent during the five-year
period from 2014 to 2019 as a result of consistent investment,
an improving market environment and, successful penetration into
Central European markets. Revenues of GBP28,896,000 were generated
from European markets in the year (2018: GBP784,000).
Forecasts indicate that the consumption of structural steelwork
within the UK marginally declined to 856,000 tonnes in 2019 from
877,000 tonnes in 2018. Projections indicate that consumption will
increase by 3.9 per cent to 889,000 tonnes in 2020 and a further
3.6 per cent to 920,000 tonnes in 2021, allowing the Group to continue
to look forward with optimism in the medium term, although these
forecasts may be revised as the impact of Covid-19 is assessed.
Operating margins reduced to 5.7 per cent in the year as a result
of a difficult trading environment towards the close of 2019 while
approaching the UK general election and the UK's exit from the
European Union. The operating margin achieved within the Safety
Solutions entities, at 20.2%, was a fantastic result. Strong levels
of utilisation were noted for the majority of 2019, on an increased
level of hire stock, following continual investment in the hire
fleets over recent years.
Earnings per share improved from 33.6 pence in 2018 to 39.8 pence
in 2019 representing an increase in the result for shareholders
of 18.5 per cent.
Cash generation was strong during the year, leaving a gross cash
balance of GBP17,856,000 (2018: GBP9,311,000) at the year end.
The average gross cash balance during the year was GBP10,688,000
(2018: GBP10,011,000). The strong cash generation, following a
positive trading period leaves the Group with a robust cash position
to enable it to achieve both its short and long term objectives,
while providing financial security in a cyclical industry.
Staff numbers as at 31 December 2019 have increased 5.3 per cent,
from the same time in 2018, to 399 as the Group continues to increase
its activities across all divisions. The increase in turnover relative
to the increase in employee numbers is an exceptional achievement
and represents a year of hard work across all divisions of the
Group. Industry wide challenges remain in attracting sufficient
quality resource across all disciplines.
The Shafton facility provides the Group with opportunity to expand
and diversify its operations further optimising the current resources
within the control of the Group.
Consolidated Balance
Sheet
2019 2018
--------------- ---------------
GBP'000 GBP'000
Non current
assets 16,456 15,711
Current assets 33,548 28,849
Current liabilities (21,724) (19,609)
Non current liabilities (187) (1,500)
Total equity 28,093 23,451
--------------- ---------------
Significant investments were made in the year relating to increasing
and renewing the hire fleet at easi-edge and hoard-it, this accounted
for GBP1,064,000 of the additions in the period.
Within non-current assets, property, plant and equipment increased
by GBP209,000, represented by capital additions of GBP1,751,000,
depreciation charges of GBP1,814,000 and net disposals of GBP10,000.
During the year an adjustment relating to the capitalisation of
lease obligations in accordance with the provisions of IFRS 16
was made of GBP282,000.
The defined benefit pension scheme has performed well in the period
against a backdrop of a turbulent equity market. At the year end,
a surplus of GBP2,205,000 along with a corresponding deferred tax
liability of GBP375,000 has resulted in a net recognised surplus
of GBP1,830,000. The scheme was closed to future accrual in 2011.
The net deferred tax liability at the year end was GBP176,000 (2018:
asset GBP39,000), being a deferred tax asset of GBP199,000 (2018:
GBP316,000) related to temporary timing differences net of a deferred
tax liability of GBP375,000 (2018: GBP277,000) related to the defined
benefit pension scheme surplus.
The increase of GBP4,699,000 in current assets included a decrease
of GBP3,669,000 in inventories, a decrease of GBP177,000 in trade
and other receivables, and an increase in the cash balance of GBP8,545,000.
Retention balances, contained within trade and other receivables
outstanding at the year end, were GBP3,364,000 (2018: GBP1,970,000).
It is anticipated that GBP3,110,000 will be received within one
year and GBP254,000 in greater than one year.
The total rise of GBP2,115,000 in current liabilities principally
comprised an increase in trade and other payables of GBP701,000
as the businesses enjoyed increased activity levels during the
year. Furthermore, the mortgage relating to the purchase of the
Shafton facility in 2015 over a 10 year repayment period is due
for renewal after 5 years and therefore the outstanding balance
of GBP1,500,000 is disclosed within current liabilities (2018:
GBP250,000). A balance of GBP1,250,000 will be outstanding at the
point of renewal.
Total equity increased by GBP4,642,000 in the year to GBP28,093,000.
The financial position of the Group at the end of the year remains
robust and provides a platform from which the Group can further
increase shareholder value.
Consolidated Cash Flow Statement
2019 2018
--------------- ---------------
GBP'000 GBP'000
Result for shareholders 4,796 4,049
Depreciation 1,814 1,502
Capital expenditure (1,751) (1,962)
Tax paid (959) (843)
Tax per income statement 1,135 894
Decrease/(increase) in
working
capital 5,378 (882)
Additional pension
contributions - -
Dividends (1,565) (1,385)
Net property loan movement (250) (250)
Others (53) 125
--------------- ---------------
Net cash inflow 8,545 1,248
Cash at beginning
of year 9,311 6,033
Cash at end
of year 17,856 8,063
--------------- ---------------
Dividends were paid in the year, in respect of 2018, at a cash
cost of GBP1,565,000 (2018: GBP1,385,000), representing 13.0 (2017:
11.5) pence per share. The ability of the Group to convert profits
into cash has been encouraging and provides the Group with cash
balances with which to increase working capital associated with
increased activity levels if required.
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 was as shown
below:
2019 2018
--------------- ---------------
GBP'000 GBP'000
Inventories and work
in progress 8,342 12,011
Accounts receivable 7,350 7,527
Accounts payable and
financial
instruments (19,433) (18,732)
Working capital at end
of year (3,741) 806
--------------- ---------------
Cash balances at the year end totaled GBP17,856,000 and there were
property and hire purchase loans outstanding of GBP1,500,000 representing
a net cash position of GBP16,356,000 (2018: GBP7,561,000). It is
pleasing to note the strong cash position of the Group. Consistent
and positive trading performances, combined with effective working
capital management has allowed the Group cash balance to increase
year on year and provides the Group with the flexibility and ability
to capitalise on opportunities as they present themselves.
The strong year end cash position allows the Group to further invest
in replacing and upgrading some of its capital assets. 2020 will
note a modest increase in capital additions, primarily within the
structural steel division of the Group. The additional capital
expenditure shall aid both an increase in the range of services
the Company can perform as well as replacing a number of aged machines
when it is prudent to do so. Investment in the latest technologies
will ensure Billington can deliver the most challenging projects,
efficiently, for its clients.
Pension Scheme
2019 2018
--------------- ---------------
GBP'000 GBP'000
Scheme assets 8,552 7,797
Scheme liabilities (6,347) (6,167)
--------------- ---------------
Surplus 2,205 1,630
--------------- ---------------
Other finance expense (6) (36)
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 assets have performed well, in a difficult market during
the period, leaving the scheme is a strong position as at the balance
sheet date.
The scheme's triennial valuation for the period ended 31 March
2017 was completed on 8 January 2018. The position of the scheme
as at the date of the valuation was an asset position of GBP8,207,000
and a liability position of GBP6,944,000 resulting in a surplus
of GBP1,263,000. The next actuarial valuation is due to be completed
as at 31 March 2020.
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 were issued based on seniority and length of service across
all parts of the Group.
During the year 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 424,705 share options outstanding at
an average exercise price of GBP1.54 per share (2018: 281,104 shares
at GBP2.63 per share).
The charge included within the accounts in respect of issued options
is GBP97,000 (2018: GBP84,000).
Covid-19
As further detailed in note 7 to this announcement the Company
has conducted comprehensive financial modelling for a range of
possible scenarios that may occur during the pandemic. The company
has completed analysis on various scenarios ranging from minor
disruption to cessation of all operations for a period of up to
six months. The Board is satisfied it has sufficient cash resources
to meet its obligations as they fall due throughout this duration.
As a contingency measure the Company has successfully secured an
additional overdraft facility of GBP3 million for a period of twelve
months. Further to securing additional facilities the Group has
reviewed its capital and discretionary expenditure and will only
utilise its resources in these areas when it is prudent to do so.
In March 2020 the UK Government announced a range of assistance
measures for businesses. The Company will seek to utilise these
schemes where it is eligible and beneficial to do so.
Notwithstanding these positive indications of the financial stability
of the Group, there is a risk that the impact of Covid-19 could
be more significant than can be currently anticipated and the Directors
have concluded that these circumstances represent a material uncertainty
which could cast significant doubt on the Group's ability to continue
as a going concern.
Nonetheless, 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. These financial statements
do not include any adjustment that would arise if the going concern
basis of preparation was not considered appropriate.
Trevor Taylor
Chief Financial
Officer
20 April 2020
Consolidated income statement for the year ended 31 December
2019
Note 2019 2018
------------------- -------------------
GBP'000 GBP'000 GBP'000 GBP'000
Revenue, excluding movements in
work in progress 108,357 76,462
(Decrease)/increase in work in
progress (3,446) 804
--------- ---------
Revenue 5 104,911 77,266
Raw materials and consumables 73,995 49,826
Other external charges 3,621 3,296
Staff costs 16,700 15,258
Depreciation 1,814 1,502
Other operating charges 2,845 2,383
(98,975) (72,265)
---------
Group operating profit 5,936 5,001
Share of post tax profit in joint
ventures - -
Total operating profit 5 5,936 5,001
Net finance
expense (5) (58)
Profit before tax 5,931 4,943
Tax (1,135) (894)
Profit for the year 4,796 4,049
========= =========
Profit for the year attributable
to equity holders of the parent
company 4,796 4,049
========= =========
Earnings per share (basic and 39.8 33.6
diluted) 3 p p
========= =========
All results arose from continuing operations.
Consolidated statement of comprehensive income for the year
ended 31 December 2019
2019 2018
-------- --------
GBP'000 GBP'000
Profit for the
year 4,796 4,049
Other comprehensive income
Items that will not be reclassified subsequently
to profit or loss
Remeasurement of net defined benefit
surplus 581 (532)
Movement on deferred tax relating to
pension liability (98) 97
Current tax relating to pension liability - (7)
-------- --------
483 (442)
Items that will be reclassified subsequently
to profit or loss
Cash flow hedging
- current year gains/(losses) 831 (831)
831 (831)
Other comprehensive income,
net of tax 1,314 (1,273)
Total comprehensive income for the year
attributable to equity holders of the
parent company 6,110 2,776
======== ========
Consolidated balance sheet as at 31 December 2019
2019 2018
------------------ ------------------
GBP'000 GBP'000 GBP'000 GBP'000
Assets
Non current
assets
Property, plant and equipment 14,251 14,042
Pension asset 2,205 1,630
Investments in joint
ventures - -
Deferred tax
asset - 39
Total non current
assets 16,456 15,711
Current assets
Inventories and work
in progress 8,342 12,011
Trade and other receivables 7,350 7,527
Cash and cash equivalents 17,856 9,311
Total current assets 33,548 28,849
Total assets 50,004 44,560
-------- --------
Liabilities
Current liabilities
Current portion of long term
borrowings 1,500 250
Trade and other payables 19,433 18,732
Lease liabilities 105 -
Current tax payable 686 627
Total current liabilities 21,724 19,609
Non current liabilities
Long term borrowings - 1,500
Lease liabilities 11 -
Deferred tax liabilities 176 -
Total non current
liabilities 187 1,500
-------- --------
Total liabilities 21,911 21,109
Net assets 28,093 23,451
======== ========
Equity
Share capital 1,293 1,293
Share premium 1,864 1,864
Capital redemption reserve 132 132
Other components of equity (820) (1,675)
Accumulated profits 25,624 21,837
Total equity 28,093 23,451
======== ========
Consolidated cash flow statement for the year ended 31 December
2019
2019 2018
-------- --------
GBP'000 GBP'000
Cash flows from operating activities
Group profit after tax 4,796 4,049
Taxation paid (959) (843)
Interest received 43 23
Depreciation on property, plant and equipment 1,814 1,502
Share based payment charge 97 84
Profit on sale of property, plant and
equipment (331) (274)
Taxation charge recognised in income
statement 1,135 894
Net finance expense 5 58
Decrease/(increase) in inventories and
work in progress 3,669 (999)
Decrease/(increase) in trade and other
receivables 177 (1,827)
Increase in trade and other payables 1,532 1,944
Net cash flow from operating activities 11,978 4,611
-------- --------
Cash flows from investing activities
Purchase of property, plant and equipment (1,751) (1,962)
Proceeds from sale of property, plant
and equipment 341 283
Net cash flow from investing activities (1,410) (1,679)
-------- --------
Cash flows from financing activities
Interest paid (42) (45)
Repayment of bank and other loans (250) (250)
Capital element of leasing payments (166) (4)
Dividends paid (1,565) (1,385)
Net cash flow from financing activities (2,023) (1,684)
-------- --------
Net increase in cash and cash equivalents 8,545 1,248
Cash and cash equivalents at beginning
of period 9,311 8,063
Cash and cash equivalents at end of period 17,856 9,311
======== ========
Consolidated statement of changes in equity for the year ended
31 December 2019
Share Capital Other
Share premium redemption components Accumulated Total
capital account reserve of equity profits 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
Transactions with
owners
Dividends (note 6) - - - - (1,385) (1,385)
Credit relating to
equity-settled
share based
payments - - - - 84 84
ESOP movement in
year - - - - - -
------------ ------------ ------------ ------------
Transactions with
owners - - - - (1,301) (1,301)
------------ ------------ ------------ ------------ ------------ ------------
Profit for the
financial
year - - - - 4,049 4,049
Other
comprehensive
income
Actuarial loss
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 year - - - (831) 3,607 2,776
============ ============ ============ ============ ============ ============
At 31 December
2018 1,293 1,864 132 (1,675) 21,837 23,451
============ ============ ============ ============ ============ ============
Share Capital Other
Share premium redemption components Accumulated Total
capital account reserve of equity profits equity
------------ ------------ ------------ ------------ ------------ ------------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2019 1,293 1,864 132 (1,675) 21,837 23,451
Transactions with
owners
Dividends (note 6) - - - - (1,565) (1,565)
Credit relating to
equity-settled
share based
payments - - - - 97 97
ESOP movement in
year - - - 24 (24) -
Transactions with
owners - - - 24 (1,492) (1,468)
------------ ------------ ------------ ------------ ------------ ------------
Profit for the
financial
year - - - - 4,796 4,796
Other
comprehensive
income
Actuarial gain
recognised
in the pension
scheme - - - - 581 581
Income tax
relating to
components of
other
comprehensive
income - - - - (98) (98)
Financial
instruments - - - 831 - 831
Total
comprehensive
income
for the year - - - 831 5,279 6,110
============ ============ ============ ============ ============ ============
At 31 December
2019 1,293 1,864 132 (820) 25,624 28,093
============ ============ ============ ============ ============ ============
The Group accumulated profits reserve includes a surplus of GBP1,830,000 (2018
- GBP1,353,000) relating to the net pension surplus.
Notes forming part of the Group financial statements for the
year ended 31 December 2019
1) Basis of preparation
The financial information in this preliminary announcement has
been prepared in accordance with accounting policies which are
based on the International Financial Reporting Standards (IFRSs) as
adopted by the European Union and in issue and in effect at 31
December 2019.
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 2019, 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 2019 statutory financial statements upon
which (i) the auditor's opinion is unqualified, (ii) the audit
report contains a material uncertainty in respect of going concern
to which the audit drew attention by way of emphasis without
modifying their report and (iii) 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 2018 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 2018 have been delivered to the Registrar of Companies.
The 31 December 2019 accounts were approved by the directors on 20
April 2020, but have not yet been delivered to the Registrar of
Companies.
3) Earnings per share
Earnings per share is calculated by dividing the profit for the
year of GBP4,796,000 (2018: profit - GBP4,049,000) by 12,052,554
(2018: 12,044,508) fully paid ordinary shares, being the weighted
average number of ordinary shares in issue during the year,
excluding those held in the ESOT.
There is no impact on a full dilution of the earnings per share
calculation as there are no potentially dilutive ordinary
shares.
4) Report, Accounts & AGM
The Annual Report and Accounts for the year ended 31 December
2019 will be available on the Company's website
www.billington-holdings.plc.uk from no later than 11 May 2020.
The Annual General Meeting will be held on 8 June 2020 at 14.00
at Billington Holdings Plc, Steel House, Barnsley Road, Wombwell,
South Yorkshire S73 8DS.
5) Segmental information
The Group trading operations of Billington Holdings plc are in
Structural Steelwork and Safety Solutions, and all are continuing.
The Structural Steelwork segment includes the activities of
Billington Structures Limited 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.
31 December 2019 Structural
Steelwork Safety Solutions Other Total
------------------------ ------------------------ ------------------------- -----------------------
Revenue
From external
customers 100,233 8,124 - 108,357
Increase in work in
progress (3,446) - - (3,446)
Segment revenues 96,787 8,124 - 104,911
Raw materials and
consumables (71,846) (2,149) - (73,995)
Other external
charges (2,460) (1,161) - (3,621)
Staff costs (13,523) (1,624) (1,553) (16,700)
Depreciation (579) (908) (327) (1,814)
Other operating
charges (4,064) (643) 1,862 (2,845)
Segment operating
profit 4,315 1,639 (18) 5,936
======================== ======================== ========================= =======================
31 December 2018 Structural
Steelwork Safety Solutions Other Total
------------------------ ------------------------ ------------------------- -----------------------
Revenue
From external
customers 69,360 7,102 - 76,462
Increase in work in
progress 804 - - 804
Segment revenues 70,164 7,102 - 77,266
Raw materials and
consumables (47,910) (1,916) - (49,826)
Other external
charges (2,187) (1,109) - (3,296)
Staff costs (12,338) (1,485) (1,435) (15,258)
Depreciation (737) (659) (106) (1,502)
Other operating
charges (3,361) (565) 1,543 (2,383)
Segment operating
profit 3,631 1,368 2 5,001
======================== ======================== ========================= =======================
6) Dividend
A final dividend was paid in July 2019 in respect of 2018 of
13.0 pence per ordinary share (GBP1,565,000).
No final dividend has been proposed in respect of 2019 as the
dividend has been suspended to preserve cash resources.
7) Going Concern
The consolidated financial statements have been prepared on a
going concern basis. The directors have taken note of the guidance
issued by the Financial Reporting Council on Going Concern
Assessments in determining that this is the appropriate basis of
preparation of the financial statements and have considered a
number of factors.
The financial position of the Group, its record trading
performance in 2019 and cash flows are detailed in the Financial
Review and they demonstrate the robust position of the Group
heading into 2020.
The Group has a gross cash balance of GBP17.9 million at 31
December 2019 and no significant long-term borrowings or
commitments. At the end of March 2020 the Group had a gross cash
balance of GBP13.0 million and during March 2020 the Group have
secured a 12 month overdraft facility of GBP3.0 million, giving the
Group available cash to utilise of GBP16.0 million.
The directors have prepared forecasts covering the period to
April 2021 and approved by the Board in March 2020. The forecasts
reflect the exceptional nature of the 2019 trading performance and
the current political and economic uncertainty and pricing
pressures in the structural steel market, excluding the potential
impact of Covid-19 which is considered below.
The uncertainty as to the future impact on the Group of the
recent Covid-19 outbreak has been separately considered as part of
the directors' consideration of the going concern basis of
preparation. The directors put in a place many positive
preventative measures at an early stage in the outbreak in response
to Covid-19 to minimise the potential impact. Thus far, the
measures have been effective.
In the downside scenario analysis performed, the directors have
considered the reasonably plausible impact of the Covid-19 outbreak
on the Group's trading and cash flow forecasts. In preparing this
analysis, a number of scenarios were modelled ranging from a 30%
drop in revenue by June 2020 followed by a gradual recovery from
September through to December, to a total country-wide lockdown and
subsequent closure of all sites for up to six months. In each
scenario, mitigating actions within the control of management,
including reductions in areas of discretionary spend, have been
modelled, but no fixed cost reductions have been assumed. It is
difficult to predict the overall outcome and impact of Covid-19 at
this stage and the duration of disruption could conceivably be
longer than anticipated. However, even under the scenario of the
closure of all sites for a significant period, the company has
sufficient liquidity and resources to continue to meet liabilities
as they fall due, without any additional funding from either
financial institutions or the government, which is considered
separately below.
The UK Government has announced a number of funding initiatives
throughout March 2020 to support businesses. The main scheme that
the Group is eligible for is the Coronavirus Job Retention Scheme.
The Scheme grants support from HMRC to cover up to 80% of salary
costs of anyone not working due to Coronavirus but whose job has
been retained, up to a maximum of GBP2,500 per month for an initial
period up to 31 May 2020, but it will be extended if necessary. If
there was a significant reduction in operations or if any or all of
the sites were required to close, the scheme would provide a
significant amount of support and short-term cost reduction without
impacting the long-term strategy of the Group.
Notwithstanding these positive indications of the financial
stability of the Group, there is a risk that the impact of Covid-19
could be more significant than can be currently anticipated and the
Directors have concluded that these circumstances represent a
material uncertainty which could cast signifcant doubt on the
Group's ability to continue as a going concern.
Nonetheless, 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. These financial statements
do not include any adjustment that would arise if the going concern
basis of preparation was not considered appropriate.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR BLGDSCGDDGGG
(END) Dow Jones Newswires
April 21, 2020 02:00 ET (06:00 GMT)
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