Billington "cautiously optimistic" about future trading

The Barnsley-based firm said the first half of 2020 was dominated by the impact of the Covid-19 pandemic on the construction sector and the consequential restrictions on site access, project delays and cancellations.

The group anticipates an improved financial performance in the second half of the year, before hopefully moving to more normal trading conditions in 2021 assuming the economy stabilises and commences its recovery from the pandemic.

In the six months to June 30, revenue fell 31 per cent to £33m, down from £47m the previous half year as the Covid-19 pandemic resulted in delayed and cancelled projects.

Pre-tax profit fell 77 per cent to £610,000.

The group has seen improved trading conditions over the summer, although margin pressure remains across the industry.

Mark Smith, chief executive of Billington, said: "Whilst all the group companies have been operational and have traded during the period, all have experienced varying levels of delays, postponements and associated pricing pressures.

"Many projects have been subject to delays and restrictions to site access, resulting in revenue decreasing by 30.5 per cent to £32.78m for the period. The reduction in revenue is as a result of two significant projects being completed in the prior period along with the impact of contract delays.

"Whereas margin pressure remains evident across the industry, we anticipate an improved performance in the second half whilst mindful of the continuing disruption caused by the Covid-19 pandemic and consequential ongoing project delays."

Analyst John Cummins at WH Ireland said: "While the lack of published estimates, the suspension of the dividend (which will be temporary in our view) and lingering Covid uncertainties are likely to weigh on short-term sentiment, Billington is in an incredibly strong strategic position.

"As such, although 2020 is likely to be a less profitable affair, the medium-term outlook is one of opportunity in our view.

"With its strong balance sheet likely to be a significant comfort to clients, the medium-term prospects for Billington, in our view, continue to be strong."