Billington sees uncertainty loom as steel industry holds its breath

BILLINGTON Holdings yesterday warned of continued market uncertainty in the structural steel sector as it posted a fall in half year revenue and profits.

In the six months ended June 30, the Barnsley-based company achieved revenue of 21.3m, compared to 29.7m in the same period last year.

Profit before tax from continuing operations was 1.1m, which is less than half the 2.6m recorded in the first six months of 2009.

Hide Ad
Hide Ad

Steve Fareham, the company's chief executive, said he was "relatively pleased" with the performance and hoped to see more opportunities in the supermarket and waste sectors.

He said the industry was holding its breath to see what happened with regards to public spending cuts.

Billington provided steel for the Royal Shakespeare Company's new theatre in Stratford-upon-Avon. It has also been awarded the contract to provide the steelwork in connection with the Cafe Royal Project in London.

Billington is helping to transform the historic cafe, which was once the haunt of Virginia Woolf, Oscar Wilde and Winston Churchill, into a five-star hotel. It also recently secured a contract to work on the civic centre in Rotherham.

Hide Ad
Hide Ad

Over the half year, the company launched hoard-it safety solutions, which provides an environmentally friendly hoarding system.

The company has also revived its specialist tubular steel division Tubecon, following increased enquiries for tubular steel structures.

Production activity had been restored in recent months as a result of contract wins, including a number in the retail sector.

The pension deficit reduced from 5.2m to 200,000 in May 2010 as a result of the disposal of non-core operations. Peter Hems, the company's executive chairman, said: "We remain cautious going forward but possess the balance sheet, industry relationships and successful businesses to provide a degree of security in the current challenging market conditions and look to the future with confidence."

Hide Ad
Hide Ad

Billington believes its new division – hoard it – could revolutionise the way UK companies use hoardings. The re-usable hoarding system uses concrete 'counterbalances' and includes a digitally printed or painted panel.

Hoard-it has been particularly successful in winning contracts in inner city areas, where it is hard to build conventional hoardings.

The division has grown so quickly that it has moved to additional premises in Barnsley, Billington said.

In a statement to accompany the results, Billington said: "The company has been successful in winning a reasonable number of new contracts in the retail sector, and this along with other contracts helped restore production activity levels in recent months.

Hide Ad
Hide Ad

"However, the ongoing uncertain market conditions continue to impact on margins."

Billington said its easi-edge subsidiary, which is based in Tuxford, Nottinghamshire, had not been as badly affected by the downturn in the construction industry as other parts of the business.

Easi-edge is involved in the design, logistics management and hire of safety barriers for the UK steel and concrete frame construction industry.

Mr Fareham said: "Prospects for the sectors in which the group operate remain challenging for the foreseeable future.

Hide Ad
Hide Ad

"The number and value of contracts being awarded remains well below that of recent years and as a result new work is only won on very competitive terms.

"We expect that this will continue to have an adverse effect on our margins and working capital in 2010 and 2011. The overall result for 2010 is likely to be in line with expectations, with the results for the second six months benefiting from a positive contribution from the final completion of contracts won in 2009."

The group has 330 staff which is around 20 less than this time last year.

Shares were unchanged at 150p.

Expansion in the tubular market

The Billington Holdings group includes Billington Structures which is one of the biggest structural steel contractor businesses in the UK.

Hide Ad
Hide Ad

From its production facilities in Barnsley and Bristol, it supplies customers across the UK with a range of structures, from portal frame and beam and column buildings, to complex structures. Between the two sites, the company is able to process in the region of 25,000 tonnes of steel per year.

Earlier this year, Steve Fareham, the group's chief executive, said the structural steel market had suffered its worst conditions since the late 1980s.

Mr Fareham has high hopes for its revived specialised tubular steel division, Tubecon.

He said yesterday: "An increase in the number of enquiries for tubular steel structures has led to our decision to market, expand and source alternative types of specialist structural steelwork in the UK and hopefully the export market."

Related topics: