TIDMBILN
RNS Number : 2035V
Billington Holdings PLC
13 April 2021
13 April 2021
Billington Holdings Plc
("Billington" or the "Company" or the "Group")
Results for the year ended 31 December 2020
Billington Holdings Plc (AIM: BILN), one of the UK's leading
structural steel and construction safety solutions specialists,
announces its audited results for the year ended 31 December
2020.
Highlights
31 December 31 December Change
2020 2019
Revenue GBP66.0m GBP104.9m -37.1%
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EBITDA GBP3.6m GBP7.8m -53.8%
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Profit before tax GBP1.7m GBP5.9m -71.2%
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Cash and cash equivalents GBP15.1m GBP17.9m -15.6%
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Earnings per share from continuing
operations 11.3p 39.8p -71.6%
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-- As a consequence of the impact of the Covid-19 pandemic,
combined with completing a number of large projects in 2019,
revenue decreased by 37.1 per cent to GBP66.0 million for the Group
(2019: GBP104.9 million)
-- The Group remained profitable, but profit before tax
decreased 71.2 per cent to GBP1.7 million (2019: GBP5.9
million)
-- Strong cash balance of GBP15.1 million (31 December 2019:
GBP17.9 million) at the year end with an average gross cash balance
of GBP15.3 million (2019: GBP10.7 million) throughout 2020
-- Dividend payments resumed with a dividend of 4.25 pence a
share proposed - covered 2.66 times by earnings
-- Order book for structural steel activities was 75 per cent
higher at the year end relative to 31 December 2019
-- Current market outlook remains competitive as a result of the
continuing impact of Covid-19, but significant contracts secured
for 2021, with a good pipeline of future opportunities
Mark Smith, Chief Executive Officer, commented:
"After a strong year for the Group in 2019, as for everyone,
2020 was dominated by the impact of the Covid-19 pandemic.
Billington entered the year in a strong position to navigate the
turbulent environment and remains a profitable and major supplier
to the structural steel and safety solutions markets.
"The major disruption caused by the Covid-19 pandemic in the
first half of 2020 and through the summer months did subside and we
enjoyed a return to more normal trading conditions in the later
part of the year, which has continued into 2021. We have a strong
order book for the remainder of 2021 and our facilities are
operating at full utilisation. However, the market remains very
competitive and continued price escalation and the availability of
some raw materials remains a concern. Our strong partner
relationships combined with strong controls and mechanisms ensures
the Group is able to substantially mitigate these headwinds,
although we believe it will be a relatively slow road for margins
to fully recover to pre-pandemic levels.
"Billington is a robust business, with good market positions and
a committed workforce. As we emerge from the pandemic the outlook
for Billington is encouraging and I look forward to the future with
cautious optimism ."
For further information please contact:
Billington Holdings Plc Tel: 0122 634 0666
Mark Smith, Chief Executive
Trevor Taylor, Chief Financial
Officer
W H Ireland Limited Tel: 0207 220 1666
Chris Hardie
James Sinclair-Ford
Jasper Berry
IFC Advisory Limited Tel: 0203 934 6630
Tim Metcalfe
Graham Herring
Zach Cohen
About Billington Holdings Plc
Billington Holdings Plc (AIM: BILN), one of the UK's leading
structural steel and construction safety solutions specialists, is
a UK based group of companies focused on structural steel and
engineering activities throughout the UK and European markets.
Group companies pride themselves on the provision of high technical
and professional standards of service to niche markets with
emphasis on building strong, trusted and long-standing partnerships
with all of our clients.
Chairman's Statement
2020 was dominated by the impact of the Covid-19 pandemic, but I
am pleased to report that despite a significant reduction in
activity, particularly in relation to our structural steel
businesses, Billington remained profitable and is well positioned
for the future as the recovery takes place.
In 2020 revenue decreased by 37.1 per cent to GBP66.0 million
(2019: GBP104.9 million) and profit before tax decreased by 71.2
per cent to GBP1.7 million (2019: GBP5.9 million). The overall
Earnings Per Share ("EPS") for the year amounted to 11.3 pence
compared with 39.8 pence in 2019, a 71.6 per cent decrease.
However, our balance sheet continued to strengthen with Net Assets
of GBP29.2 million at 31 December 2020 (31 December 2019: GBP28.1
million), with a strong gross cash balance of GBP15.1 million at 31
December 2020 (31 December 2019: GBP17.9 million), providing a
continuing solid foundation for the Group.
It was unfortunate that after a record year in 2019 we faced the
serious issues caused by the Covid-19 pandemic in 2020. Our first
priority was the safety of our staff and customers, with
appropriate changes being made to working practices in line with
government guidance.
We also focused on taking actions to preserve cash and protect
liquidity in a way that did not compromise the long-term prospects
of the business. This included the deferral of all non-essential
capital expenditure for a period, a hiring freeze, cost reductions,
agreed additional banking facilities, deferral of VAT payments and
utilisation of the UK Government's Coronavirus Job Retention Scheme
("CJRS"). In addition, the Board agreed that it was not appropriate
to recommend the payment of a final dividend for 2019. We
understand the importance of the dividend to our shareholders and I
am pleased to say that we are proposing the payment of a modest
dividend for 2020.
During the year our structural steel businesses, Billington
Structures and Peter Marshall Steel Stairs continued to see market
pricing pressures, due to the impact of Covid-19, and suffered a
number of project delays. Whilst our other facilities remained open
the decision was taken to shut the Bristol facility for a period of
six weeks and place the staff on furlough as a result of project
delays. By the year end we had seen a return to more normal levels
of activity and I am pleased that the businesses have been
successful in securing a significant amount of new business for
2021, in a variety of sectors.
Peter Marshall Steel Stairs started the year with a strong order
book and continued almost uninterrupted through the pandemic, with
minimal staff furloughed, although the pandemic did have a negative
impact on the level of profitability due to changes in product
mix.
As with all the Group's businesses, the easi-edge perimeter edge
protection and fall prevention business experienced a material drop
in activity in the first half due to the Covid-19 lockdown,
although as projects restarted a recovery was seen in the second
half. The business entered 2021 with a good degree of forward
visibility and we anticipate the improving trends experienced in
the later part of 2020 to continue, although there remains
uncertainty as to when certain project deferments will restart.
hoard-it was impacted, particularly in the first half, as the
pandemic led to a pause in new site commencements. However, on-site
activities built back up to historic levels in the fourth quarter
and hoard-it entered 2021 with a promising pipeline of new
business.
Pension Scheme
The defined benefit pension scheme (closed to future accrual in
2011) continues in surplus despite the impact of the pandemic on
equity markets in 2020. At 31 December 2020 a surplus of
GBP1,683,000 (2019: GBP2,205,000) along with a corresponding
deferred tax liability of GBP320,000, has resulted in a net
recognised surplus of GBP1,363,000 (2019: GBP1,830,000).
The actuarial valuation was undertaken as at 31 March 2020 and
despite the extremely depressed equity markets at this time as a
consequence of the emerging pandemic the scheme remained in
surplus.
Dividend
Despite the exceptional results in 2019 no final dividend was
proposed in respect of that year as the dividend was suspended to
preserve cash resources in light of the anticipated impact of the
Covid-19 pandemic. No interim dividends were paid in 2020. However,
the Board now feels it is appropriate for Billington to resume
dividend payments, albeit at a modest level whilst the impact of
Covid-19 continues. The Board is therefore recommending a final
dividend of 4.25 pence per share for 2020, which is covered 2.66
times by earnings. The final dividend will be paid, subject to
shareholder approval at the Company's AGM, on 6 July 2021, to those
shareholders on the register on 4 June 2021.
Liquidity and capital reserves
In 2020 the Group experienced a net cash outflow of GBP2.7
million (2019: GBP8.5 million net cash inflow). The increase in
working capital requirements from the prior balance sheet date was
anticipated and more closely reflects the balance noted in previous
years. Going forward the Group's cash continues to provide strong
cover for its working capital requirements and a robust position
from which to take the Group forward. Capital expenditure in 2020
increased over the level in 2019 and for 2021 is forecast to remain
at a similar level as certain projects that were paused due to the
pandemic have been restarted. The Group will seek to further
enhance its manufacturing capabilities, and to replace some aged
capital equipment when it is prudent to do so.
Our People
The Covid-19 pandemic has dramatically impacted the personal and
working lives of everyone. For the team at Billington this has
required significant changes to working practices.
I am delighted with the way in which our workforce has met these
challenges and I would like to take this opportunity to thank them
all for their exceptional efforts, good humour and resilience in
these difficult times.
Economic Outlook
Whilst the result of the General Election in December 2019 and
the UK's departure from the European Union ("EU") at the end of
January 2020 were the dominant themes at the start of the year, the
impact of the Covid-19 pandemic has overshadowed everything.
UK gross domestic product ("GDP") fell by 9.9% in 2020, as no
sector of the economy was left unscathed by lockdowns and
plummeting demand during the pandemic. It was the biggest fall in
annual GDP since 1709, although there was a very modest return to
growth in the fourth quarter. The current estimate is that the UK
structural steelwork market declined by 20 per cent in 2020.
Current forecasts for the UK structural steelwork industry are
for the market to return to growth with an increase of 16.2 per
cent in 2021 and a further 7.4 per cent in 2022 following the fall
in 2020. However, these forecasts are likely to be subject to
revision as the pace of the recovery from the impact of Covid-19 is
assessed.
In addition to the demand issues caused by the pandemic, the
Group has faced a significant increase in structural steel costs
during the year. The purchase of British Steel by Jingye on 9 March
2020 has provided the Company and the wider steel industry with
more stability and increased certainty of uninterrupted supply
moving forward, but this has done little to alleviate the
unprecedented scale of price increases and the volatility in prices
experienced during 2020. During the period the price of iron ore
and scrap steel nearly doubled leading to major increases in the
price of steel products, a trend that is expected to continue.
Whilst opportunities exist across Europe and are being actively
pursued by the Company, no new business has been secured from the
EU since the UK's exit at the end of January 2020. However, the new
business opportunities identified by the Group in the UK provides
confidence that the Group is able to secure sufficient volumes of
contracts to maintain optimum output in the short to medium
term.
As always, the Company continues to remain 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 continues to be dominated by the global
Covid-19 pandemic, but we have seen a recovery in activity levels
in the later part of 2020 and into 2021, and whilst pricing
pressures remain in the market we are, however, anticipating
improved results in 2021.
Whilst the Covid-19 pandemic will continue to impact the demand
for certain products and services for some time, we have a robust
business, supported by a healthy balance sheet and committed
workforce. Billington remains well placed to take advantage of
opportunities as they are presented.
Ian Lawson
Non-Executive Chairman
12 April 2021
Chief Executive Statement
Operational Review
2020 was a year of significant challenge for Billington after
the record year in 2019, dominated by the impact of the Covid-19
pandemic, resulting in revenues decreasing by 37.1 per cent to
GBP66.0 million and profit before tax decreasing by 71.2 percent to
GBP1.7 million . That we were able to overcome these challenges and
remain profitable is a real credit to the tireless dedication of
our workforce and I would like to thank them all for their efforts
and adaptability in these difficult times.
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
70 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 operates in two distinct business areas.
The first undertakes activities for Billington Structures. The
second, Shafton Steel Services offers a complete range of steel
profiling services to a large number of diverse external
engineering and construction companies, providing further
opportunities to increase the capacity of the business as well as
allowing for the supply of value added, complementary products and
services to enhance the comprehensive offering of the Group.
During the first half of the year and into the summer months,
the business faced significant challenges as a result of Covid-19,
with the pricing pressures that impacted towards the end of 2019
continuing. As a result of the pandemic a number of projects were
cancelled or delayed and even though few construction sites were
closed completely, there was a pause in activity, particularly in
April and May, as sites adapted to new ways of working. A number of
suppliers did close during the period, but the business was able to
overcome this without any significant impact.
Important to the efficient operation of the Structures business
is that the facilities remain fully utilised as far as possible.
Billington is not alone in this requirement and as the level of
work available in the market decreased due to the impact of the
pandemic, further significant pricing pressure was experienced. The
decision was taken to close the Bristol facility for six weeks over
the summer period and place all the staff on furlough leave in
order to ensure that the remaining two facilities were fully
utilised, albeit with much of the work at lower margins than those
enjoyed historically.
Since the UK's exit from the EU at the end of January 2020 the
business has continued to tender for new contracts in the EU,
although to date no new EU business has been secured.
The larger projects undertaken by Billington Structures during
2020 included:
-- All England Tennis Club Indoor Facility - Wimbledon
-- Better Barnsley Town Centre Redevelopment - Barnsley
-- Magna Park Distribution Centres - Lutterworth
Towards the end of 2020 and into 2021 Billington Structures has
seen a significantly improved outlook. Now operating at full
utilisation, the business has, post period end, won further new
business, including some higher margin contracts, and has a strong
order book for the remainder of the year. Whilst the detailed
timing of certain projects remains uncertain, the order book is
more balanced than it has been for some time, with a number of
large projects, particularly for distribution warehouses and data
centres in the UK regions outside of London.
Awards
It is pleasing to note that the Company secured the Tekla Sports
and Recreation Project award for The Glass Works, Barnsley town
centre redevelopment project, where the company delivered circa
3,500 tonnes of highly complex structural steelwork.
Furthermore, efforts were recognised for the Company's delivery
of the London School of Economics Centre Building through receiving
a commendation in the Structural Steel Design awards.
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.
Peter Marshall Steel Stairs was the least impacted by the
pandemic of any of Billington's businesses and there was only
minimal requirement for staff to be placed on furlough leave during
the year. The business started the year with a very healthy order
book and benefited from supplying to projects involving both
Billington Structures and other large projects from the wider
engineering and construction market. However, there was a modest
reduction in turnover and profitability, when compared to 2019, due
to the product mix and an increase in the proportion of supply only
contracts.
Notable projects undertaken in 2020 included:
-- Ocado Distribution Centres - Andover, Avonmouth and Purfleet
-- Virtus Data Centre - London
-- Amazon Fulfilment Centre - Swindon
The business entered 2021 with a positive order book. Since the
year end the company has received its largest single order, and
enjoys a robust market position, particularly when viewed against
its smaller competitors, in what is a fragmented market.
easi-edge
easi-edge is a leading site safety solutions provider of
perimeter edge protection and fall prevention systems for hire
within the construction industry. Health and safety is at the core
of the business which operates in a legislation driven market.
In the first half of the year the business was particularly
impacted by Covid-19 related delays to the start of projects and
project deferments, although a recovery was seen in the second half
as sites reopened. The CJRS was utilised covering up to a maximum
of 50 per cent of easi-edge's workforce in order to maintain
employment, although staff were incrementally brought back to work
as the year progressed and all had returned by the year end.
Projects undertaken by easi-edge in 2020 included:
-- Milburngate Redevelopment - Tolent Construction - Durham
-- Manchester College - Willmott Dixon - Manchester
-- Barton Court School - Kier Construction - Canterbury
The target remains for easi-edge's stock to be utilised 85 per
cent at any one time. 2020 started at this level, reducing to
approximately 60 per cent during the lockdown in the first half and
recovering to approximately 74 per cent by the year end.
The investments made in the business in 2019, adding to the
stock available for hire, meant 2020 was a year of low capital
expenditure, focusing on replacements where required. However, the
business continues to innovate and easi-edge's new Core Safe
product for the protection of lift shafts will be introduced to the
market in the first half of 2021.
The business brought a good forward order book into 2021 and
whilst certain projects continue to be delayed, particularly in the
commercial office market, other sectors such as distribution
warehouses are more buoyant, all be it with a lower use of
easi-edge product per project. We believe easi-edge is very well
positioned as the market recovers in one of the higher margin
segments for the Group.
hoard-it
hoard-it produces a unique range of re-usable temporary hoarding
solutions which are environmentally sustainable and available on
both a hire and sale basis tailored to the requirements of its
customers.
hoard-it was not immune to the impact of the pandemic,
particularly in the first half of the year, as the pandemic led to
a pause in new site openings. At the height of the impact
approximately 50 per cent of the hoard-it staff were on furlough
leave. However, as on-site activities built back up to the best
levels enjoyed historically in the fourth quarter, all staff
returned to work and the team was further strengthened.
Notable projects in 2020 undertaken by hoard-it included:
-- Various Nightingale Hospital sites
-- Pinewood Studios - Sir Robert McAlpine - Slough
-- Swindon Radiotherapy Centre - John Sisk - Swindon
-- Prince Charles Hospital - Interserve - Merthyr Tydfil
Significant capital expenditure of approximately GBP600,000 to
increase the hire stock level was undertaken in the second half of
the year with the continuing focus on establishing the product as
the number one choice for main contractors and developers in the
construction industry.
Whilst hoard-it is experiencing some pricing pressure, it
entered 2021 with a promising pipeline of new business,
particularly in relation to hospital and school projects, and in
the residential construction market, where hoard-it's range of
printed boards and panels are proving attractive to developers
looking for a professional and promotional site image.
Our People
Our workforce faced challenges in 2020 at a level never
previously experienced, both in their working and personal lives as
a result of the Covid-19 pandemic. I am pleased to say that they
rose to these challenges, with new working practices implemented
and both those working throughout the period and those subject to a
period of furlough leave showing the resilience and flexibility
required to maintain the Group in a strong position.
As a result of the restructuring of certain roles, average staff
numbers in 2020 decreased 5.0 per cent, with 361 employed at the
year end. We anticipate a modest increase in staff numbers in 2021
as activity returns to pre-pandemic levels, although attracting
sufficient, experienced, quality people remains a challenge for
both Billington and the industry as a whole. 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.
Billington also 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.
Additionally, Billington continues as 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. In light of the Covid-19 pandemic our
immediate priority in 2020 was to ensure the health and wellbeing
of our staff and customers. Significant changes were made to the
way we operate to allow for social distancing, home working by
office staff where appropriate and to provide a healthy working
environment for those working in our facilities and on sites.
Across the Group we continue to be actively involved in a number
of initiatives both locally and nationwide to ensure the safety of
our staff and to minimise the impact of our operations on the
environment. 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 2020 the Health and Safety department, which had
been further strengthened in 2019, worked 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.
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. In
2020 Billington has actively supported many charity programmes.
Throughout 2020, Billington donated to the likes of Macmillian,
Mind, Barnsley Hospice as well as a range of local sports teams
that our employees are involved with.
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 and monitors these on a regular basis.
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
In March 2020 we welcomed the news that the sale of British
Steel to Chinese firm Jingye had been completed. The completed sale
to Jingye has provided a degree of stability to the British steel
industry, together with the anticipation of much needed investment,
particularly in blast furnace refurbishment, which we understand
awaits clarity on future environmental legislation.
Throughout 2020, the dominant theme has been the increase in
steel prices. A near doubling in iron ore prices in the period,
coupled with similar increases in scrap steel values, has led to
consequential price increases in the wide range of steel products
that the Group sources from a variety of steel producers worldwide.
Since May 2020 these price increases have been in the order of 40
percent and the scale and speed of the price rises is
unprecedented. Additionally challenges have been faced with the
restricted supply of cold rolled steel and Brexit related issues
with imports.
However, Billington benefits from its scale in the market and
trading relationships with its primary supply chain, which together
with a hedging strategy covering most projects up to six months
out, mitigates the immediate impact. Although, over the longer term
price rises have to be passed onto customers as far as
possible.
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 volatility in steel prices
and any variability in supply over the short term.
Prospects and Outlook
Whilst 2019 should be viewed as an exceptionally positive year
for Billington, 2020 has been dominated by the impact of the
Covid-19 pandemic and could be viewed in the opposite way. However,
Billington fortunately entered 2020 in a strong position to
navigate the difficulties ahead and remains today a profitable and
significant player in the structural steel and safety solutions
markets.
The major disruption caused by the Covid-19 pandemic in the
first half of 2020 and through the summer months appears to have
subsided and we enjoyed a return to more normal trading conditions
in the later part of the year and into 2021.
The market remains very competitive and continued price
escalation and availability of some raw materials remains a
concern. Our strong partner relationships combined with strong
controls and mechanisms ensures the Group is able to substantially
mitigate these headwinds.
In conclusion, I would like to thank Billington's Board,
employees, shareholders and all stakeholders for their unstinting
support during these difficult times. Billington is a robust
business, with good market positions and a committed workforce. As
we emerge from the pandemic the outlook for Billington is
encouraging and I look forward to the future with cautious
optimism.
Mark Smith
Chief Executive Officer
12 April 2021
Financial Review
------------------------------------------ ---- ---- ---- -------------- ---------------
Consolidated Income Statement
2020 2019
-------------- ---------------
GBP'000 GBP'000
Revenue 65,955 104,911
Operating profit 1,659 5,936
Profit before
tax 1,667 5,931
Profit after
tax 1,369 4,796
Profit for shareholders 1,369 4,796
Operating profit
margin 2.5% 5.7%
Return on capital
employed 13.9% 49.1%
Earnings per share (basic) 11.3p 39.8p
Revenue decreased 37.1 per cent year on year partly as a result
of a reduction in output related to the structural steelwork
activities of the Group as a consequence of the Covid-19 pandemic.
Revenues in 2019 had significantly increased as a result of
two significant projects being completed in the period. which
were not repeated in 2020. Whilst construction activities in
the UK were permitted to continue during the pandemic the Group
experienced a number of project cancellations and deferments
impacting output.
Forecasts indicate that the consumption of structural steelwork
within the UK declined to 683,000 tonnes in 2020 from 858,000
tonnes in 2019, a fall of 20.4 per cent. Projections indicate
that consumption will increase by 16.2 per cent to 794,000 tonnes
in 2021 and a further 7.4 per cent to 853,000 tonnes in 2022,
allowing the Group to look forward with optimism in the medium
term as the UK recovers from the pandemic.
Operating margins reduced to 2.5 per cent in the year as a result
of a difficult trading environment and reduced output from the
Group. The operating margin achieved within the Safety Solutions
entities, at 16.9 per cent (2019: 20.2 per cent), was very encouraging
and demonstrated resilience during the period. The level of
utilisation for the hire products within the Safety Solutions
divisions was immediately impacted at the onset of the pandemic
and remained behind the levels achieved in 2019 for the remainder
of 2020, resulting in revenues decreasing 9 per cent in the
period.
Earnings per share reduced from 39.8 pence in 2019 to 11.3 pence
in 2020 representing a decrease in the result for shareholders
of 71.6 per cent.
Cash management was a primary focus during the year. The gross
cash balance of GBP15,126,000 at 31 December 2020 (31 December
2019: GBP17,856,000) was consistent with the balance in 2019
after adjusting for some exceptional contributory factors raising
the balance in the comparative period. The average gross cash
balance during the year was GBP15,300,000 (2019: GBP10,700,000).
The continued strong cash position leaves the Group well placed
to achieve both its short- and long-term objectives, while providing
financial security in a cyclical industry.
Average staff numbers in 2020 decreased 5.0 per cent with a
related overall fall in staff costs of 4.0 per cent year on
year. Industry wide challenges remain in attracting sufficient
quality resource across all disciplines and the Group anticipates
a modest increase in staff numbers in 2021 as activity returns
to pre pandemic levels.
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
2020 2019
-------------- ---------------
GBP'000 GBP'000
Non current
assets 16,219 16,456
Current assets 33,340 33,548
Current liabilities (18,866) (21,724)
Non current liabilities (1,476) (187)
Total equity 29,217 28,093
-------------- ---------------
At the onset of the pandemic the Group's large capital expenditure
projects planned for the period were paused to enable cash to
be preserved. As the initial lockdown was eased two significant
projects were restarted, one relating to the replacement of
a current machine and one relating to an expansion of the current
service offering of the Group. At the year end both projects
remained under construction and totalled GBP921,000.
Within non-current assets, property, plant and equipment increased
by GBP285,000, represented by capital additions of GBP2,216,000,
depreciation charges of GBP1,911,000 and net disposals of GBP20,000.
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 GBP1,683,000 along with a corresponding
deferred tax liability of GBP320,000 has resulted in a net recognised
surplus of GBP1,363,000. The scheme was closed to future accrual
in 2011.
The net deferred tax liability at the year end was GBP476,000
(2019: GBP176,000), being a deferred tax liability of GBP156,000
(2019: asset of GBP199,000) related to temporary timing differences,
combined with a deferred tax liability of GBP320,000 (2019:
GBP375,000) related to the defined benefit pension scheme surplus.
The decrease of GBP208,000 in current assets included a decrease
of GBP3,264,000 in inventories, an increase of GBP5,526,000
in trade and other receivables, and a decrease in the cash balance
of GBP2,730,000.
Retention balances, contained within trade and other receivables
outstanding at the year end, were GBP3,110,000 (2019: GBP3,364,000).
It is anticipated that GBP2,921,000 will be received within
one year and GBP189,000 in greater than one year.
The total fall of GBP2,858,000 in current liabilities principally
comprised a decrease in trade and other payables of GBP826,000
along with a fall of GBP1,250,000 related to short term borrowings
that were refinanced in the year upon their expiry.
Total equity increased by GBP1,124,000 in the year to GBP29,217,000.
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
2020 2019
-------------- ---------------
GBP'000 GBP'000
Result for shareholders 1,369 4,796
Depreciation 1,911 1,814
Capital expenditure (2,216) (1,751)
Tax paid (844) (959)
Tax per income statement 298 1,135
(Increase)/decrease in working
capital (3,088) 5,378
Dividends
paid - (1,565)
Net property loan movement (250) (250)
Others 90 (53)
-------------- ---------------
Net cash (outflow)/inflow (2,730) 8,545
Cash at beginning
of year 17,856 9,311
Cash at end
of year 15,126 17,856
-------------- ---------------
Dividends were suspended to preserve cash resources in the period
(2019: GBP1,565,000).
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:
2020 2019
-------------- ---------------
GBP'000 GBP'000
Inventories and work
in progress 5,078 8,342
Accounts receivable 12,876 7,350
Accounts payable and financial
instruments (18,607) (19,433)
Working capital at end
of year (653) (3,741)
-------------- ---------------
Cash balances at the year end totaled GBP15,126,000 and there
were property loans outstanding of GBP1,250,000 representing
a net cash position of GBP13,876,000 (2019: GBP16,356,000).
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 strong
cash balance to be maintained 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.
2021 will note a modest increase in capital additions, primarily
within the structural steel division of the Group. The additional
capital expenditure will support both an increase in the range
of services the Company can perform as well as replacing a number
of aged machines with more efficient models 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.
Covid-19 Cash Preservation
Dividends payable in respect of 2019 were suspended in the period
to allow the Group to maintain its cash resources.
Capital expenditure was, for a time, limited to necessary replacements
only and significant projects were deferred for a period until
the impact of Covid-19 was better understood. Pleasingly, two
of the three projects planned for the period commenced towards
the latter part of the year with the third project now anticipated
to be completed in 2021.
During the year the Group utilised the CJRS to maintain the
employment of individuals as a number of projects were deferred,
delayed or cancelled. The Group claimed GBP730,000 from the
CJRS in the year. While certain individuals remained on furlough
leave in 2021 the Group has resolved not to claim any further
monies under the CJRS.
At the onset of the pandemic HM Revenue and Customs permitted
all companies to defer their VAT liabilities for the period
20 March 2020 to 30 June 2020. The Company utilised the facility
and deferred GBP671,000 of VAT, this will be repaid in equal
installments in the period April 2021 to March 2022.
Notwithstanding the continued strong cash position of the Group
an additional contingent bank facility of GBP3,000,000 was put
in place in March 2020 to mitigate the potential risk that construction
activities would cease for period. Activities, albeit at lower
levels were able to continue and the facility was not utilised
in the year.
Pension Scheme
2019 2019
-------------- ---------------
GBP'000 GBP'000
Scheme assets 9,292 8,552
Scheme liabilities (7,609) (6,347)
-------------- ---------------
Surplus 1,683 2,205
-------------- ---------------
Other finance income/(expense) 4 (6)
-------------- ---------------
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 in a strong position as at the
balance sheet date.
The scheme's triennial valuation for the period ended 31 March
2020 was completed on 10 December 2020. The position of the
scheme as at the date of the valuation was an asset position
of GBP8,048,000 and a liability position of GBP7,776,000 resulting
in a surplus of GBP272,000. At the valuation date of 31 March
2020, the equity market had been significantly impacted by the
pandemic and as a consequence affected the value of the assets
within the scheme. The FTSE 100 index at 31 March 2020 was 5,672
and has subsequently recovered to circa 6,600, an increase of
some 16 per cent thus providing increased confidence of the
financial position of the scheme in the long term. The next
actuarial valuation is due to be completed as at 31 March 2023.
Employee Share Option Trust (ESOT)
The Group operates an ESOT to allow employees to share in the
future, continued success of the Group, promote productivity
and provide further incentives to recruit and retain employees.
Options are issued based on seniority and length of service
across all parts of the Group.
A Long Term Incentive Plan (LTIP) was introduced across the
Group to assist in the remuneration of management and further
align the interests of senior management and shareholders. Awards
are made subject to achieving progressive Group performance
metrics over a three year period.
At the year end there were 514,395 share options outstanding
at an average exercise price of GBP0.43 per share (2019: 424,705
shares at GBP2.63 per share).
The charge included within the accounts in respect of issued
options is GBP118,000 (2019: GBP97,000).
Trevor Taylor
Chief Financial
Officer
12 April 2021
Consolidated income statement for the year ended 31 December
2020
Note 2020 2019
------------------- -------------------
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------------ ----- -------- --------- -------- ---------
Revenue, excluding movements in
work in progress 69,463 108,357
Decrease in work
in progress (3,508) (3,446)
--------------------------------------------- ----- -------- --------- -------- ---------
Revenue 5 65,955 104,911
Raw materials and consumables 40,514 73,995
Other external charges 3,917 3,621
Staff costs 16,028 16,700
Depreciation 1,911 1,814
Other operating charges 1,926 2,845
(64,296) (98,975)
---------
Operating profit 5 1,659 5,936
Share of post tax profit in joint
ventures - -
Net finance income/(expense) 8 (5)
Profit before tax 1,667 5,931
Tax (298) (1,135)
Profit for the year 1,369 4,796
========= =========
Profit for the year attributable
to equity holders of the parent
company 1,369 4,796
========= =========
11.3 39.8
Earnings per share (basic and diluted) 3 p p
========= =========
All results arose from continuing operations.
Consolidated statement of comprehensive income for the year
ended 31 December 2020
2020 2019
-------- --------
GBP'000 GBP'000
Profit for the
year 1,369 4,796
Other comprehensive
income
Items that will not be reclassified subsequently
to profit or loss
Remeasurement of net defined benefit surplus (526) 581
Movement on deferred tax relating to pension
liability 100 (98)
-------- --------
(426) 483
Items that will be reclassified subsequently
to profit or loss
Cash flow hedging
- current year
gains - 831
- 831
Other comprehensive income,
net of tax (426) 1,314
Total comprehensive income for the year
attributable to equity holders of the
parent company 943 6,110
======== ========
Consolidated balance sheet as at 31 December 2020
2020 2019
------------------ ------------------
GBP'000 GBP'000 GBP'000 GBP'000
Assets
Non current assets
Property, plant and equipment 14,536 14,251
Pension asset 1,683 2,205
Investments in joint ventures - -
Total non current
assets 16,219 16,456
Current assets
Inventories and work in
progress 5,078 8,342
Trade and other receivables 12,876 7,350
Current tax receivable 260 -
Cash and cash equivalents 15,126 17,856
Total current
assets 33,340 33,548
Total assets 49,559 50,004
-------- --------
Liabilities
Current liabilities
Current portion of long term
borrowings 250 1,500
Trade and other payables 18,607 19,433
Lease liabilities 9 105
Current tax payable - 686
Total current liabilities 18,866 21,724
-------- --------
Non current liabilities
Long term borrowings 1,000 -
Lease liabilities - 11
Deferred tax liabilities 476 176
Total non current
liabilities 1,476 187
-------- --------
Total liabilities 20,342 21,911
Net assets 29,217 28,093
======== ========
Equity
Share capital 1,293 1,293
Share premium 1,864 1,864
Capital redemption
reserve 132 132
Other components of equity (783) (820)
Accumulated profits 26,711 25,624
Total equity 29,217 28,093
======== ========
Consolidated cash flow statement for the year ended 31 December
2020
2020 2019
-------- --------
GBP'000 GBP'000
Cash flows from operating activities
Group profit after tax 1,369 4,796
Taxation paid (844) (959)
Interest received 41 43
Depreciation on property, plant and
equipment 1,911 1,814
Share based payment charge 181 97
Profit on sale of property, plant
and equipment (274) (331)
Taxation charge recognised in income
statement 298 1,135
Net finance (income)/expense (8) 5
Decrease in inventories and work in
progress 3,264 3,669
(Increase)/decrease in trade and other
receivables (5,526) 177
(Decrease)/increase in trade and other
payables (826) 1,532
Net cash flow from operating activities (414) 11,978
-------- --------
Cash flows from investing activities
Purchase of property, plant and equipment (2,216) (1,751)
Proceeds from sale of property, plant
and equipment 294 341
Net cash flow from investing activities (1,922) (1,410)
-------- --------
Cash flows from financing activities
Interest paid (37) (42)
Proceeds of bank and other loans 1,250 -
Repayment of bank and other loans (1,500) (250)
Capital element of leasing payments (107) (166)
Dividends paid - (1,565)
-------- --------
Net cash flow from financing activities (394) (2,023)
-------- --------
Net (decrease)/increase in cash and
cash equivalents (2,730) 8,545
Cash and cash equivalents at beginning
of period 17,856 9,311
Cash and cash equivalents at end of
period 15,126 17,856
======== ========
Consolidated statement of changes in equity for the year ended
31 December 2020
Capital Other
Share Share redemption components Accumulated
capital premium reserve of equity profits Total 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 - - - - (1,565) (1,565)
Credit relating to
equity-settled
share based
payments - - - - 97 97
ESOT 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
============= ========= ============ ============= ============ =============
Capital Other
Share Share redemption components Accumulated
capital premium reserve of equity profits Total equity
------------- --------- ------------ ------------- ------------ -------------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2020 1,293 1,864 132 (820) 25,624 28,093
Transactions with
owners
Credit relating to
equity-settled
share based
payments - - - - 181 181
ESOT movement in
year - - - 37 (37) -
Transactions with
owners - - - 37 144 181
------------- --------- ------------ ------------- ------------ -------------
Profit for the
financial
year - - - - 1,369 1,369
Other
comprehensive
income
Actuarial loss
recognised
in the pension
scheme - - - - (526) (526)
Income tax
relating to
components of
other
comprehensive
income - - - - 100 100
Total
comprehensive
income
for the year - - - - 943 943
============= ========= ============ ============= ============ =============
At 31 December
2020 1,293 1,864 132 (783) 26,711 29,217
============= ========= ============ ============= ============ =============
The Group accumulated profits reserve includes a surplus of GBP1,363,000 (2019
- GBP1,830,000) relating to the net pension surplus.
Notes forming part of the Group financial statements for the
year ended 31 December 2020
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 2020.
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 2020, 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 2020 statutory financial statements upon
which the auditor's opinion is unqualified and did not contain a
statement under either sections 498(2) or 498(3) of the Companies
Act 2006. The audit report for the year ended 31 December 2019 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 2019 have been delivered to the Registrar of
Companies. The 31 December 2020 accounts were approved by the
directors on 12 April 2021, 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 GBP1,369,000 (2019: profit - GBP4,796,000) by 12,082,548
(2019: 12,052,554) 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) Reports, Accounts & AGM
The Annual Report and Accounts for the year ended 31 December
2020 will be available on the Company's website
www.billington-holdings.plc.uk from no later than 11 May 2021.
The Annual General Meeting will be held on 1 June 2021 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 Structural Safety
2020 Steelwork Solutions Central Total
------------------------ ------------------------ ------------------------- -------------------------
Revenue
From external
customers 62,099 7,364 - 69,463
Decrease in work
in
progress (3,508) - - (3,508)
Segment
revenues 58,591 7,364 - 65,955
Raw materials
and consumables (38,534) (1,980) - (40,514)
Other external
charges (2,748) (1,169) - (3,917)
Staff costs (12,811) (1,612) (1,605) (16,028)
Depreciation (636) (972) (303) (1,911)
Other operating
charges (3,475) (389) 1,938 (1,926)
Segment
operating
profit 387 1,242 30 1,659
======================== ======================== ========================= =========================
31 December Structural Safety
2019 Steelwork Solutions Central Total
------------------------ ------------------------ ------------------------- -------------------------
Revenue
From external
customers 100,233 8,124 - 108,357
Decrease 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
======================== ======================== ========================= =========================
6) Dividend
No final dividend was proposed in respect of 2019 as the
dividend was suspended to preserve cash resources.
A final dividend has been proposed in respect of 2020 of 4.25
pence per ordinary share (GBP550,000). As the distribution of
dividends by Billington Holdings Plc requires approval at the
shareholders' meeting, no liability in this respect is recognised
in the consolidated financial statements.
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 continued positive
trading performance in 2020 and cash flows are detailed in the
Financial Review and they demonstrate the robust position of the
Group heading into 2021.
The Group has a gross cash balance of GBP15.1 million at 31
December 2020 and no significant long-term borrowings or
commitments.
The Directors have prepared forecasts covering the period to
April 2022 and approved by the Board in March 2021. The uncertainty
as to the future continued impact on the Group and the Company of
the Covid-19 outbreak has been separately considered as part of the
Directors' consideration of the going concern basis of
preparation.
The continued support of the construction industry by the UK
Government and the ability shown by the business to react and adapt
to the challenges of the last twelve months provides a degree of
confidence that the Group will be able to maintain its output
throughout the current and any future lockdowns. Furthermore, the
current orderbook secured for 2021 allows the Group to look forward
with an increasing degree of optimism.
The Directors expect that the Group has sufficient resources to
enable it to continue to adopt the going concern basis in preparing
the financial statements.
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END
FR DKBBKABKDQQD
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