Billington Holdings Plc, which is one of the UK's largest structural steel and construction safety companies, has announces its audited results for the year ended 31 December 2020.
As a consequence of the impact of the Covid-19 pandemic, combined with completing a number of large projects in 2019, group revenue decreased by 37.1 per cent to £66.0 million.
The statement said: "The group remained profitable, but profit before tax decreased 71.2 per cent to £1.7 million."
The group said it had a strong cash balance of £15.1 million at the year end with an average gross cash balance of £15.3 million throughout 2020.
The group said the current market outlook remained competitive as a result of the continuing impact of Covid-19, but significant contracts have been 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."
While the result of the General Election in December 2019 and the UK's departure from the European Union 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, Billington said.
The statement to accompany the results said: "UK gross domestic product 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 said it had faced a significant increase in structural steel costs during the year.
The statement added: "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."
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