SHARES in structural steel group Billington Holdings shot up 18 per cent on the news that it will beat full year expectations following a doubling in half year profits.
The Barnsley-based company, which supplied the steel for the Royal Shakespeare Company’s award-winning Stratford-upon-Avon theatre, said the first half of 2014 showed “real signs of improvement” in the structural sector and it believes its specialist divisions will show similar improvements in the second half.
Finance director Trevor Taylor said: “The market has definitely improved and we are seeing work come on stream.
“We are taking market share as price is not the only factor contractors are looking at. They are now looking at the best supplier for the job – not who’s got the cheapest price.”
Billington, like other structural steel firms, was hit hard during the downturn, but while many failed Billington managed to survive after a restructuring that included around 90 job losses, which represented 25 per cent of the workforce.
The group is now recruiting again and is warning there will be an industry-wide shortage of skilled labour unless manufacturers step up their apprenticeship schemes.
Billington said it has taken on just short of 20 apprentices working across the business, from factory floor to project management, and is now looking to fill another five positions.
“We’ll grow our own people with skills so in two or three years’ time we’ll be in a strong position,” said Mr Taylor.
New chief operating officer Mark Smith added: “As we get busier, there will be a skills shortage. We’re trying to breed our own.”
Mr Smith, who joined Billington from William Hare Structural Engineers in June, has a long career in the sector and is seen as a possible successor to the highly regarded CEO Steve Fareham, who has announced his intention to retire next June after steering the group back to health.
The group’s recovery is gathering pace and yesterday the group announced a 35 per cent leap in revenues to £23.2m in the six months to June 30.
Pre-tax profits rose 132 per cent to £790,000. The group’s shares closed up 27.5p at 177.5p, a rise of 18.3 per cent.
Analyst Matthew Davis at WH Ireland said: “Interim results to June 2014 demonstrate a substantial improvement in revenue progression and profitability, the focus on value add contracts combined with swelling order books underpinning the positive momentum.
“Given the strength of the first half results, we further upgrade our 2014 pre-tax profit estimates by 25 per cent to £1.5m from £1.2m, and 2015 estimates by 20 per cent to £1.8m.”
The group has taken on a number of new projects in Yorkshire.
These include an energy from waste project in Wakefield, a new Tesco store in Rotherham, a sixth form college in Barnsley and new office development at Wellington Place in Leeds.
Mr Taylor said the group is cash-generative and this will lead to the re-instatement of the dividend at some point in the future.