Interim Results

RNS Number : 9271L

Billington Holdings PLC

11 September 2012

 



Press Release                                                                                11 September 2012

Billington Holdings Plc

Billington Holdings Plc

("Billington" or "the Group")

 Interim Results

Billington Holdings Plc (AIM:BILN), one of the UK's leading structural steel and construction safety solutions specialists, today announces its interim results for the six months ended 30 June 2012.

	Unaudited  six months to 30 June 2012	Unaudited  six months to  30 June 2011
Revenue	£20.1m	£22.8m
Adjusted EBITDA¹	£638,000	£84,000
Operating profit / (loss) before tax (pre-exceptional items)	£68,000	(£561,000)
Loss before tax	£200,000	£555,000
Cash and cash equivalents	£1.1m	£2.7m
Loss per share from continuing operations	1.3p	3.5p

¹ EBITDA adjusted for redundancy costs of £251,000

Highlights

·     Results in line with management's expectations

·     Adjusted EBITDA¹ increased by £554,000 to £638,000 (2011: £84,000)

·     Reduced loss before tax of £200,000, an improvement of £355,000 against a loss of £555,000 in the corresponding period last year

·     Reduced loss per share of 1.3p, an improvement of 2.2p against loss per share of 3.5p in the corresponding period last year

·     Balance sheet strength remains, with cash and cash equivalents of £1.1m

·     Market remains challenging, although tentative signs of margin recovery; Billington well placed to capitalise on expected, gradual market recovery from 2013 onwards

Steve Fareham, Chief Executive, commented:

"Although the markets in which we operate remain challenging, the Board feels that the actions taken this year and last, in response to the strategic review that the Group carried out, have resulted in a more efficient business that is well placed to build on the strong position we hold in the structural steel market.

"While we continue to monitor our cost base carefully, and having achieved a pleasing improvement in underlying profitability, our focus now turns to restoring the Group to post-tax profitability by gaining market share and seeking additional, alternative markets that offer our Group growth potential.   

"We look to the future with cautious optimism and are confident that the combination of our robust balance sheet, experience and strong industry relationships leave us well placed to benefit from the expected medium-term recovery."

For further information please contact:

Billington Holdings Plc                                                                                                  Tel:        [phone]

Peter Hems
Executive Chairman

Steve Fareham
Chief Executive

Blythe Weigh Communications                                                                                 Tel:        [phone]

Paul Weigh                                                                                                                         Mob:     [phone]
 Tim Blythe                                                                                                                         Mob:     [phone]

W H Ireland Limited                                                                                                       Tel:        [phone]

Katy Mitchell

Chief Executive's Statement

Introduction

I am able to report results for Billington Holdings plc for the six months ended 30 June 2012 which are broadly in line with market expectations. Trading conditions continue to remain difficult, however, our stability and return to profitability initiative is beginning to yield improvements in the business.

Results

I am happy to report that the trading position of the Group for the six months to June 2012 yielded a trading profit of £0.1 million after adjusting for redundancy costs incurred in the period of £0.3 million. The equivalent period in 2011 resulted in a loss being incurred of £0.6 million.

Group revenue decreased by 12% on the equivalent period in 2011, primarily as a result of reverting back to a single shift arrangement within the Group's main business of Billington Structures Limited in a conscious effort to target added value work and not production volumes whilst there remains overcapacity within the structural steel market.

Businesses

Structural Steel

Based in Barnsley and Bristol, Billington Structures' main business is the design, fabrication and erection of structural steelwork for a wide variety of sectors, including supermarkets, education, commercial buildings, waste and military establishments. Investigation of alternative markets and products remains firmly on track and we are hopeful that some of these will come to fruition in the second half of 2012. After a difficult start to the year with significant redundancies and changes in positions the new management team have settled well into their respective roles. The disputed contracts that severely affected our 2011 performance have all been satisfactorily resolved.

The transition to single shift operations at both factories has significantly reduced our output but there have been notable improvements in operational efficiencies. Tubecon, our specialist tubular and complex steelwork division, has undertaken a number of high profile technically challenging projects during the period.

Our joint venture, BS2, with Bourne Construction remains focussed and a number of large projects have been bid to date with further expected to follow.

Peter Marshall Steel Stairs has re-established itself as a major player in the UK steel staircase market and order intakes through recent weeks have been encouraging.

Safety Solutions

Based in Tuxford, North Nottinghamshire, easi-edge's main business is the hire of patented safety barriers to the UK steel and timber frame construction industries. Pressure has been growing on the use of such barriers with contractors clearly cutting costs and in some cases standards. This, when coupled with a reduction in intra Group orders, has seen a significant reduction in its utilisation.

Our hoard-it site hoardings division, based in Wombwell, after a slow start to 2012 has seen a period of rapid expansion. The percentage of products hired to major contractors has increased, necessitating a revision to its former business model that anticipated the product would be primarily sale.

Earnings per Share

Loss per share from continuing operations was 1.3 pence in the period compared with a loss per share of 3.5 pence for the corresponding period in 2011.

Dividend

The Directors have once again reluctantly decided not to pay an interim dividend at the current time (2011 - no interim dividend) in order to maintain cash reserves in what continues to be an unstable market.

Liquidity and Capital Resources

The Group had a cash balance of £1.1 million at 30 June 2012, compared with £1.8 million at 31 December 2011 and £2.7 million at 30 June 2011. The net cash flow from operating activities during the period amounted to an outflow of £0.6 million, which was primarily attributable to a decrease in the level of trade and other payables, net of smaller decreases in trade and other receivables and inventories and work in progress since 31 December 2011. The net cash flow from investing activities amounted to an outflow of £0.1 million, with the majority of the capital expenditure related to additional hire products for easi-edge.

The Group continues to support its supply chain in this difficult trading environment and pay suppliers within agreed terms.

In the current climate of uncertainty for the construction industry generally, the Board considers that having a strong balance sheet with adequate available cash resources and bank facilities enables the Group to be well placed to take advantage of the slow but inevitable economic recovery.

Pension

The Group's remaining final salary pension scheme completed its triennial valuation in the period. Additional pension contributions were paid to the scheme over the six months to June 2012 of £0.2 million. The Group remains committed to the scheme and achieving its overall objective of realising the buyout funding level.

Prospects

Prospects for the sectors in which we operate remain challenging.  We expect current margins on contracts to be slender throughout the remainder of 2012, with a further small element of recovery in 2013. 

There have been a number of business failures in the steelwork contracting sector during the period and we would be surprised not to see more in Q3 and Q4.  TATA's forecast for the sector does indicate some slight growth for both 2012 and 2013².

We are mid way through a full review of how we market and promote all of the Group's activities. We anticipate that by the end of 2012 we will be in a better position to offer our various customers a wider range of products and services and to gain entry into alternative market sectors.

I believe that Billington possesses the balance sheet, vision, experience and expanding industry relationships to enable it to move forward, further increase market share and become the preferred supplier of structural steelwork and related activities across the industry.

Board and Employees

Finally, I would like to thank my colleagues on the board and all of our loyal employees and stakeholders for their continued support through the difficult but rewarding journey towards our goal of 'Stability and a return to Profitability'.

May I also wish Darren Kemplay, our HR manager, and Les Holloway, our Company Secretary, speedy recoveries and returns to work after protracted periods of illness.

² Page 29 BCSA annual review 2011-12

Condensed consolidated interim income statement
Six months ended 30th June 2012
		Unaudited		Unaudited		Audited
		Six months		Six months		Twelve months
		to 30th June		to 30th June		to 31st December
		2012		2011		2011
		£000		£000		£000
Continuing operations
Revenue		20,108		22,768		53,878
(Decrease)/increase in work in progress		(1,805)		4,728		1,179
		18,303		27,496		55,057
Raw material and consumables		10,783		18,699		38,296
Other external charges		1,412		1,767		3,408
Staff costs		5,067		6,535		12,948
Redundancy		251		0		472
Depreciation		570		645		1,265
Other operating charges		403		411		908
		18,486		28,057		57,297
Group operating loss		(183)		(561)		(2,240)
Share of post tax profit in joint ventures		0		0		0
Total operating loss		(183)		(561)		(2,240)
Net finance (cost)/income		(17)		6		(7)
Other finance income - pension scheme		0		0		88
Loss before tax		(200)		(555)		(2,159)
Tax		52		145		430
Loss for the period from continuing operations and attributable to equity holders of the parent company		(148)		(410)		(1,729)
Loss per share (basic and diluted) from continuing operations		(1.3 p)		(3.5 p)		(14.9 p)
Dividends per share		0.00 p		0.00 p		0.00 p
Loss 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 11,581,408. The comparatives are calculated by reference to the weighted average number of ordinary shares in issue which were 11,587,408 for the period to 30 June 2011 and 11,586,616 for the year ended 31 December 2011.

Condensed consolidated interim balance sheet
As at 30th June 2012
	Unaudited		Unaudited		Audited
	30th June		30th June		31st December
	2012		2011		2011
	£000		£000		£000
Assets
Non current assets
Property, plant and equipment	8,389		8,801		8,857
Pension assets	327		371		327
Investment in joint ventures	0		0		0
Deferred tax asset	862		465		810
Total non current assets	9,578		9,637		9,994
Current assets
Inventories and work in progress	5,996		11,415		7,794
Trade and other receivables	4,332		4,226		5,955
Current tax receivable	0		24		0
Cash and cash equivalents	1,119		2,707		1,839
Total current assets	11,447		18,372		15,588
Total assets	21,025		28,009		25,582
Liabilities
Current liabilities
Current portion of long term borrowings	49		0		49
Trade and other payables	7,921		13,802		12,314
Current tax payable	9		0		9
Total current liabilities	7,979		13,802		12,372
Non current liabilities
Long term borrowings	397		0		413
Total non current liabilities	397		0		413
Total liabilities	8,376		13,802		12,785
Net assets	12,649		14,207		12,797
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	(909)		(902)		(909)
Accumulated profits	10,269		11,820		10,417
Total equity	12,649		14,207		12,797

Condensed consolidated interim statement of comprehensive income
Six months ended 30th June 2012
		Unaudited		Unaudited		Audited
		Six months		Six months		Twelve months
		to 30th June		to 30th June		to 31st December
		2012		2011		2011
		£000		£000		£000
Loss for the period		(148)		(410)		(1,729)
Other comprehensive income
	Actuarial loss recognised in the pension scheme	0		0		(134)
	Movement on deferred tax relating to pension liability	0		0		26
	Current tax relating to pension liability	0		0		24
Other comprehensive income, net of tax		0		0		(84)
Total comprehensive income for the period attributable to equity holders of the parent company		(148)		(410)		(1,813)

Condensed consolidated interim statement of changes in equity
(Unaudited)		Share	Share	Capital	Other	Accumulated	Total
		capital	premium	redemption	reserve -	profits	equity
			account	reserve	ESOP
		£000	£000	£000	£000	£000	£000
	At 1st January 2011	1,293	1,864	132	(902)	12,230	14,617
	Transactions with owners	0	0	0	0	0	0
	Loss for the six months to 30th June 2011	0	0	0	0	(410)	(410)
	Total comprehensive income for the period	0	0	0	0	(410)	(410)
	At 30th June 2011	1,293	1,864	132	(902)	11,820	14,207
	At 1st July 2011	1,293	1,864	132	(902)	11,820	14,207
	Transactions with owners
	ESOP movement in period	0	0	0	(7)	0	(7)
	Transactions with owners	0	0	0	(7)	0	(7)
	Loss for the six months to 31st December 2011	0	0	0	0	(1,319)	(1,319)
	Other comprehensive income
	Actuarial loss recognised in the pension schemes	0	0	0	0	(134)	(134)
	Income tax relating to components of other comprehensive income	0	0	0	0	50	50
	Total comprehensive income for the period	0	0	0	0	(1,403)	(1,403)
	At 31st December 2011	1,293	1,864	132	(909)	10,417	12,797
	At 1st January 2012	1,293	1,864	132	(909)	10,417	12,797
	Transactions with owners	0	0	0	0	0	0
	Loss for the six months to 30th June 2012	0	0	0	0	(148)	(148)
	Total comprehensive income for the period	0	0	0	0	(148)	(148)
	At 30th June 2012	1,293	1,864	132	(909)	10,269	12,649

Condensed consolidated interim cash flow statement
Six months ended 30th June 2012
		Unaudited		Unaudited		Audited
		Six months		Six months		Twelve months
		to 30th June		to 30th June		to 31st December
		2012		2011		2011
		£000		£000		£000
Cash flows from operating activities
Group loss after tax		(148)		(410)		(1,729)
Tax received		0		127		150
Interest received		0		6		12
Depreciation on property, plant and equipment		570		645		1,265
Difference between pension charge and cash contributions		(167)		0		(2)
Loss/(profit) on sale of property, plant and equipment		28		1		(68)
Tax expense recognised in income statement		(52)		(145)		(430)
Net finance cost/(income)		17		(6)		(81)
Decrease/(increase) in inventories and work in progress		1,798		(4,882)		(1,261)
Decrease/(increase) in trade and other receivables		1,790		(980)		(2,709)
(Decrease)/increase in trade and other payables		(4,393)		4,232		2,744
Net cash flow from operating activities		(557)		(1,412)		(2,109)
Cash flows from investing activities
Interest paid		(17)		0		(19)
Purchase of property, plant and equipment		(135)		(738)		(1,969)
Proceeds from sale of property, plant and equipment		5		3		627
Net cash flow from investing activities		(147)		(735)		(1,361)
Cash flows from financing activities
Equity dividends paid		0		0		0
Proceeds of bank and other loans		0		0		469
Repayment of bank and other loans		(16)		0		(7)
Employee Share Ownership Plan share purchases		0		0		(7)
Net cash flow from financing activities		(16)		0		455
Net decrease in cash and cash equivalents		(720)		(2,147)		(3,015)
Cash and cash equivalents at beginning of period		1,839		4,854		4,854
Cash and cash equivalents at end of period		1,119		2,707		1,839

Notes to the interim accounts - as at 30th June 2012
Segmental Reporting
	The continuing operations of Billington Holdings plc operate only in Structural Steel. The Structural Steel segment includes the activities of Billington Structures Limited, Peter Marshall Steel Stairs Limited and easi-edge Limited. The Group activities, comprising services and assets provided to Group companies and a small element of external property rentals and management charges, are considered incidental to the activities of Billington Structures Limited and have therefore not been shown as a separate operating segment but have been subsumed with Structural Steel.  All assets of the Group reside in the UK.
Basis of preparation
	These consolidated interim financial statements are for the six months ended 30 June 2012.  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 2011 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.
Dividends
	In the first half of 2012 Billington Holdings Plc has not declared a final dividend in respect of 2011 to its equity shareholders (2011: nil).  No interim dividend for 2012 has been declared (2011: nil).
	These results were approved by the Board of Directors on 10 September 2012.

 

END

 

 

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