Interim Results

RNS Number : 0392Z

Billington Holdings PLC

15 September 2009

 



Press Release

15 September 2009

Billington Holdings Plc

('Billington' or 'the Group')

Interim Results

Billington Holdings Plc, one of the UK's leading structural steel and engineering specialists, today announces its interim results for the six months ended 30 June 2009.  

Financial highlights

●	Revenue increased by 5.3% to £37.4 million (H1 2008: £35.5 million)
●	Operating profit increased by 17.3% to £2.65 million (H1 2008: £2.26 million)
●	Profit before tax from continuing operations up 9.3% to £2.53 million (H1 2008: £2.32 million)
●	Profits after taxation from continuing operations increased 3.6% to £1.7 million  (H1 2008: £1.6 million)
●	Structural Steel activities returned operating profits of £2.7 million compared with £2.6 million in the same period last year, which is broadly in line with expectations
●	Earnings per share from continuing activities increased by 4.3% to 14.5 pence  (H1 2007: 13.9 pence)
●	Proposed dividend of 3.25 pence per share (H1 2008: 3.75 pence per share)

Commenting on the results, Peter Hems, Executive Chairman of Billington Holdings Plc, said: 'We are delighted that our core structural steel business is showing an increasingly robust performance in challenging conditions for the wider construction sector.  

'Our established market position has given the Group a strong order book which has ensured another resilient half year performance. Whilst the state of the construction sector remains a concern, the strong financial position that we have maintained for the Group will support our specialist businesses as we continue to grow.'  

- Ends - 

For further information please contact:

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

Brewin Dolphin Investment Banking
Andrew Emmott	Tel: [phone]

Media enquiries:

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

Notes to Editors

With history dating back to 1970, Billington Holdings Plc was formed in June 2008 following the disposal of non-core assets and change of name from Amco Corporation Plc. The Group comprises three divisions:

Structural Steel

Billington Structures	One of the leading structural steel contractor businesses in the UK focusing on the design, manufacture and erection of structural steelwork for industrial, public sector and commercial buildings. This division is listed as a 'preferred supplier' to a number of main contractors, including Balfour Beatty and Bovis, and regularly works on a 'back-to-back' basis in competitive tendering.
Hollybank	Design and manufacture of steel arch roof supports for the underground mining industry.

Safety Solutions

easi-edge

A specialist in the development, production and rental or sale of edge protection systems and of other safety related products for the construction industry.

Engineering

Dosco Overseas Engineering

Design and manufacture of roadheading and tunnelling machines for the mining and civil engineering industries worldwide.

Billington Holdings Plc is headquartered in Wombwell, South Yorkshire. For further information, visit http://www.billington-holdings.plc.uk.        

Chairman's Statement

Introduction

I am pleased to report the results for Billington Holdings Plc for the six months ended 30 June 2009.  Group revenue increased by 5.3% and operating profit shows an increase of 17% over the same period last year, which is particularly pleasing in the light of the current economic climate.  When compared to the same period last year, the results are showing a similar performance from structural steel and reduced losses on specialist engineering.  

Results

Profit before taxation amounted to £2.53 million, which compares with £2.32 million for the same period last year.  Profits after taxation from continuing operations were £1.67 million compared with £1.62 million for last year.  

Structural Steel

The Group's structural steel activities returned operating profits of £2.69 million which compared with £2.61 million in the same period last year, demonstrates an improvement on our forecasts.  The structural steel activities comprise Billington Structures, Hollybank Engineering and easi-edge, the safety solutions business.  Billington Structures, the award winning structural steel business, traded in line with expectations for the first half and has recently won additional work in the education sector which is proving resilient.  

Billington Structures has performed well in the first half, but a large proportion of that result was generated from contracts won last year which have been completed during this period.  The Group reported in July 2009 that the forward booked production capacity was at a two year high with important contract wins in the education sector. This will have a significant positive effect on the expected result for the second half. However, selling prices are currently much tighter and margins much reduced, which will impact significantly on results in 2010.  Hollybank Engineering is experiencing a similar level of demand to the previous year for its specialist underground steelwork and it is anticipated that demand will continue at this level for the remainder of 2009.  easi-edge, the innovative safety solutions business, has performed broadly in line with expectations for the first half and current order levels and enquiries indicate that the outcome for the full year will be broadly in line with expectations.  

easi-edge has been impacted by the downturn in the construction industry generally, but has sought to expand its customer base and product range. It continues to develop innovative safety solution products to meet customer demand and, as these continue to gain acceptance in the market, they will increase the contribution that this business makes to Group profit.  

Specialist Engineering

The Group's specialist engineering activity relates to the Dosco business which designs and manufactures underground tunnelling equipment for the worldwide mineral extraction industry.  This division is showing an operating loss of £83,000 for this period as against a loss of £339,000 for the same period last year. The first half has seen the completion of orders received in 2008, but the current order and activity levels are such that the losses will increase in the second half.  The markets in which the business operates have been impacted by the world downturn in mineral prices and the contraction in mining activity, with the inevitable reduction in capital spend.  

Pension Schemes and Total Recognised Gains

The pension scheme assets and liabilities have been included in the accounts using the valuation provided by the actuary as at 31 December 2008.  It has been decided that, in line with many other small listed companies, the movements on the valuation of the pension schemes assets and liabilities will in future only be reflected in the annual accounts.  It is considered particularly appropriate to make this change at this time in the light of recent volatility in financial markets.

Earnings per Share

Earnings per share from continuing operations were 14.5 pence compared with 13.9 pence for the corresponding period in 2008. The corresponding figure for the whole of 2008 was 30.4 pence per share.  

Dividend

I am delighted to announce that the Directors intend to pay a dividend of 3.25 pence per share on 2 November 2009 to shareholders on the register on 2 October 2009.  Although the results for the first half are showing an increase, the overall result for the year is projected to be lower than that for 2008.  On the assumption that we maintain the ratio between the interim and final at one third to two thirds, the reduction in the interim dividend reflects the likely overall reduction in the dividend for the year.

Liquidity and Capital Resources

The Group had a cash balance of £8.64 million at 30 June 2009, compared with £3.98 million at 31 December 2008.  The cash inflow from operating activities during the period amounted to £6.00 million which was in line with expectations and is as a result of the release of cash from the planned build up of trade debtors and work in progress in relation to certain contracts in the period prior to the year end.  Cash flow movement for the comparable period shows an operating cash outflow of £1.4 million but reflects the pre-disposal group and is therefore not strictly comparable. In the current climate of uncertainty for the construction industry generally the Board considers that the current position of having a strong balance sheet underpinned by substantial cash represents a very important asset.  

Prospects

Current trading remains very challenging, however we are projecting that the outcome for 2009 will be considerably better than had originally been anticipated. This is due to a combination of factors, but particularly the projected level of activity within the structural steel business for the second half of the year which, although at lower margins, will make a much greater contribution to overhead absorption levels than had originally been anticipated. The level of activity in the specialist engineering business is a concern and management are looking to minimise the ongoing costs for that business, whilst maintaining the technical expertise necessary to service future orders. Although, the Group is now confident of achieving a satisfactory result for 2009, we still remain cautious about the prospects for 2010.  The activity levels in the construction sector generally remain at substantially reduced levels and it is going to take some time for this to recover. However, as one of the leading players in its markets, Billington possesses the balance sheet, industry relationships and successful businesses to provide a degree of security in the current difficult market conditions and also a platform for long term growth.  

Peter K Hems

Executive Chairman

14 September 2009

  Condensed consolidated interim income statement

Six months ended 30 June 2009

		Unaudited		Unaudited		Audited
		Six months		Six months		Twelve months
		to 30 June		to 30 June		to 31 December
		2009		2008		2008
		£000		£000		£000
Revenue		38,103		35,718		77,275
(Decrease)/increase in work in progress		(710)		(204)		1,030
		37,393		35,514		78,305
Raw material and consumables		23,996		23,214		52,179
Other external charges		1,248		1,190		1,936
Staff costs		7,693		7,100		16,752
Depreciation		621		686		1,390
Other operating charges		1,185		1,065		1,044
		34,743		33,255		73,301
Group operating profit		2,650		2,259		5,004
Finance cost		0		0		(1)
Finance income		53		203		431
Other finance cost		(169)		(143)		(217)
Profit before taxation		2,534		2,319		5,217
Tax		(858)		(702)		(1,696)
Profit for the period from continuing operations		1,676		1,617		3,521
Discontinued operations
Profit for the period from discontinued operations		0		27		27
Loss on disposal of discontinued operations		0		(208)		(279)
Profit for the period attributable to equity holders of the parent company		1,676		1,436		3,269
Earnings per share (basic and diluted) from continuing operations		14.5 p		13.9 p		30.4 p
Earnings per share (basic and diluted) from discontinued operations		0.0 p		0.2 p		0.2 p
Earnings per share (basic and diluted) from continuing and discontinued operations		14.5 p		12.4 p		28.2 p
Dividends per share		3.25p		3.75 p		11.25 p

Earnings per ordinary share have been calculated on the basis of the result for the period after tax, divided by the weighted average number of ordinary shares in issue in the period, excluding those held in the ESOP Trust, of 1,347,419. The comparatives are calculated by reference to the weighted average number of ordinary shares in issue which were 11,603,408 for the period to 30 June 2008 and 11,588,408 for the year ended 31 December 2008.

  Condensed consolidated interim balance sheet

As at 30 June 2009

	Unaudited		Unaudited		Audited
	Six months		Six months		Twelve months
	to 30 June		to 30 June		to 31 December
	2009		2008		2008
	£000		£000		£000
Assets
Non current assets
Property, plant and equipment	9,835		10,250		10,234
Deferred tax assets	2,129		1,725		2,129
Total non current assets	11,964		11,975		12,363
Current assets
Inventories and work in progress	12,563		9,099		13,623
Trade and other receivables	8,380		6,412		12,149
Cash and cash equivalents	8,637		11,697		3,979
Total current assets	29,580		27,208		29,751
Total assets	41,544		39,183		42,114
Liabilities
Current liabilities
Trade and other payables	17,535		17,260		19,212
Current tax payable	824		568		276
Total current liabilities	18,359		17,828		19,488
Non current liabilities
Pension liabilities	6,970		5,523		7,083
Total non current liabilities	6,970		5,523		7,083
Total liabilities	25,329		23,351		26,571
Net assets	16,215		15,832		15,543
Equity
Called up share capital	1,293		1,293		1,293
Share premium	1,864		1,864		1,864
Capital redemption reserve	132		132		132
Other reserve	(901)		(873)		(899)
Accumulated profits	13,827		13,416		13,153
Total equity	16,215		15,832		15,543

  Condensed consolidated interim statement of other comprehensive income

Six months ended 30th June 2009

	Unaudited		Unaudited		Audited
	Six months		Six months		Twelve months
	to 30 June		to 30 June		to 31 December
	2009		2008		2008
	£000		£000		£000
Profit for the period	1,676		1,436		3,269
Other comprehensive income
Actuarial gain/(loss) recognised in the pension schemes (see note)	0		404		(1,994)
Actuarial gain recognised in the pension schemes - discontinued	0		0		297
Movement on deferred tax relating to pension liability	0		(23)		414
Current tax relating to pension liability	0		128		131
Other comprehensive income, net of tax	0		509		(1,152)
Total comprehensive income for the period attributable to equity holders of the parent company	1,676		1,945		2,117
Note
Actuarial gain/(loss) recognised in the pension schemes
Actual return less expected return on pension scheme assets	0		(4,241)		(8,734)
Experience gains and losses arising on the scheme liabilities	0		(1)		(18)
Changes in assumptions underlying the present value of the scheme liabilities	0		4,646		6,758
	0		404		(1,994)

As a result of the recent level of volatility within financial markets it has been decided that a full pension liability restatement will not be completed within the interim accounts ended 30 June 2009 and shall be completed in line with mandatory requirements at the year end.

 Condensed consolidated interim statement of changes in equity 

(Unaudited)		Share	Share	Capital	Other	Profit	Total
		Capital	Premium	Redemption	Reserve	& Loss	Equity
			Account	Reserve	(ESOP)	Account
		£000	£000	£000	£000	£000	£000
	Balance at 1st January 2008	1,293	1,864	132	(1,310)	12,778	14,757
	Dividends	0	0	0	0	(870)	(870)
	ESOP Movement in Period	0	0	0	437	(437)	0
	Transactions with owners	1,293	1,864	132	(873)	11,471	13,887
	Profit for the six months to 30th June 2008	0	0	0	0	1,436	1,436
	Other comprehensive income
	Actuarial gain recognised in the pension schemes	0	0	0	0	381	381
	Income tax relating to components of other comprehensive income	0	0	0	0	128	128
	Total comprehensive income for the period	0	0	0	0	1,945	1,945
	Balance at 30th June 2008	1,293	1,864	132	(873)	13,416	15,832
	Balance at 1st July 2008	1,293	1,864	132	(873)	13,416	15,832
	Dividends	0	0	0	0	(435)	(435)
	ESOP Movement in Period	0	0	0	(26)	0	(26)
	Transactions with owners	1,293	1,864	132	(899)	12,981	15,371
	Profit for the six months to 31st December 2008	0	0	0	0	1,833	1,833
	Other comprehensive income
	Actuarial loss recognised in the pension schemes	0	0	0	0	(1,664)	(1,664)
	Income tax relating to components of other comprehensive income	0	0	0	0	3	3
	Total comprehensive income for the period	0	0	0	0	172	172
	Balance at 31st December 2008	1,293	1,864	132	(899)	13,153	15,543

Condensed consolidated interim statement of changes in equity (cont.)

	Balance at 1st January 2009	1,293	1,864	132	(899)	13,153	15,543
	Dividends	0	0	0	0	(1,002)	(1,002)
	ESOP Movement in Period	0	0	0	(2)	0	(2)
	Transactions with owners	1,293	1,864	132	(901)	12,151	14,539
	Profit for the six months to 30th June 2009	0	0	0	0	1,676	1,676
	Other comprehensive income
	Actuarial gain recognised in the pension schemes	0	0	0	0	0	0
	Income tax relating to components of other comprehensive income	0	0	0	0	0	0
	Total comprehensive income for the period	0	0	0	0	1,676	1,676
	Balance at 30th June 2009	1,293	1,864	132	(901)	13,827	16,215

  Condensed consolidated interim cash flow statement

Six months ended 30 June 2009

		Unaudited		Unaudited		Audited
		Six months		Six months		Twelve months
		to 30 June		to 30 June		to 31 December
		2009		2008		2008
		£000		£000		£000
Cash flows from operating activities
Group profit after tax		1,676		1,436		3,269
Adjustments for:
Depreciation on property, plant and equipment		621		686		1,390
Difference between pension charge and cash contributions		(157)		16		(702)
Profit on sale of property, plant and equipment		(3)		(28)		(19)
Taxation expense		858		702		1,696
Taxation paid		(265)		(699)		(1,958)
Finance cost/(income)		116		67		(213)
Decrease/(increase) in trade and other receivables		3,769		(200)		(5,238)
Decrease/(increase) in inventories and work in progress		1,060		(714)		(7,337)
Decrease in trade and other payables		(1,677)		(2,861)		(40)
Loss on disposal of discontinued operations		0		181		279
Net cash flow from operating activities		5,998		(1,414)		(8,873)
Cash flows from investing activities
Net cash flow from returns on investments and servicing of finance		(116)		60		430
Purchase of property, plant and equipment		(391)		(362)		(938)
Proceeds from sale of property, plant and equipment		171		375		253
Net cash inflow from disposal of discontinued operations		0		7,000		8,400
Net cash flow from investing activities		(336)		7,073		8,145
Cash flows from financing activities
Equity dividends paid		(1,002)		0		(1,305)
Employee Share Ownership Plan share purchases		(2)		(8)		(34)
Employee Share Ownership Plan share sales		0		8		8
Net cash flow from financing activities		(1,004)		0		(1,331)
Net increase/(decrease) in cash and cash equivalents		4,658		5,659		(2,059)
Cash and cash equivalents at beginning of period		3,979		6,038		6,038
Cash and cash equivalents at end of period		8,637		11,697		3,979

  Segmental Reporting 

As at 30 June 2009

	Unaudited		Unaudited		Audited
	Six months		Six months		Twelve months
	to 30 June		to 30 June		to 31 December
	2009		2008		2008
	£000		£000		£000
Analysis of revenue
Structural Steel	32,726		31,897		65,748
Specialist Engineering	4,667		3,593		12,557
Group	0		24		0
Consolidated total	37,393		35,514		78,305
Analysis of Group operating profit before finance income/cost
Structural Steel	2,690		2,606		4,576
Specialist Engineering	(83)		(339)		710
Group	43		(8)		(282)
Consolidated total	2,650		2,259		5,004
Analysis of total Group assets
Structural Steel	12,689		8,216		13,895
Specialist Engineering	9,134		6,565		14,167
Group	17,592		22,677		11,923
Consolidated total	39,415		37,458		39,985
Deferred tax	2,129		1,725		2,129
Total Group assets	41,544		39,183		42,114

Basis of Preparation 

These consolidated interim financial statements are for the six months ended 30 June 2009. 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 2008 which contained an unqualified audit report and have been filed with the Registrar of Companies.  They did not contain statements under S237(2) or S237(3) of the Companies Act 1985.

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.

Copies of the interim financial statements will be sent to all shareholders shortly and will be available on the company's website www.billington-holdings.plc.uk .

Dividends

In the first half of 2009 Billington Holdings Plc declared a final dividend in respect of 2008 of 7.75 pence amounting to £1,002,410 (2008 7.5 pence - £970,075 to its equity shareholders (including £104,425 paid to the ESOP). An interim dividend for 2008 of 3.75 pence amounting to £485,000 was declared and paid in the second half of 2008.

 

END

 

 

IR ILFSRASISLIA