BILLINGTON HOLDINGS PLC

Earnings Release • Sep 10, 2013

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RNS Number : 5533N

Billington Holdings PLC

10 September 2013

Press Release                                                                                10 September 2013

Billington Holdings Plc

Billington Holdings Plc

("Billington" or "the Group")

Interim Results

Billington Holdings Plc (AIM:BILN), one of the UK's leading structural steel and construction safety solutions specialists, today announces its interim results for the six months ended 30 June 2013.

	Unaudited  six months to 30 June 2013	Unaudited  six months to  30 June 2012	Change
Revenue	£17.2m	£20.1m	-14.7%
Adjusted EBITDA¹	£817,000	£638,000	+28.1%
Profit / (loss) before tax	£252,000	(£200,000)	+226%
Cash and cash equivalents	£417,000	£1,119,000	-62.7%
Earnings / (loss) per share from continuing operations	1.6p	(1.3p)	+223%

¹ Adjusted EBITDA is EBITDA adjusted for redundancy costs

Highlights

·     Results in line with current market expectations but ahead of original market expectations at the start of the financial year

·     Adjusted EBITDA¹ increased by £179,000 to £817,000 (2012: £638,000); Profit before tax of £252,000 (2012: loss of £200,000), an improvement of £452,000

·     Successful delivery of first projects into strategically targeted new business sectors, including rail and energy.  First overseas project, in Scandinavia, delivered

·     Balance sheet strength remains, with cash and cash equivalents of £417,000; cash reduction due to increased inventory and work in progress levels

·     Market remains challenging, although there are encouraging signs of stability and tentative improvement; Billington's pipeline of opportunities is increasing

Steve Fareham, Chief Executive, commented:

"I am pleased to report a set of results that exceed original market expectations from the start of this financial year and demonstrate the progress that Billington has made in recent years.

"The combination of the restructuring action that we completed in 2012, success in securing work in new sectors and early, albeit tentative, signs of market recovery have led to a return to profitability for the Group.

"Prospects for the sectors in which we operate are beginning to show slight improvement and, although we remain cautious, we look forward to exploiting the opportunities our markets present in the second half of the year and beyond."

For further information please contact:

Billington Holdings Plc                                                                                                  Tel:        01226 340666

Peter Hems, Non-Executive Chairman

Steve Fareham, Chief Executive

Blythe Weigh Communications                                                                                                Tel:        020 7138 3204

Paul Weigh                                                                                                                         Mob:     07989 129658

W H Ireland Limited                                                                                                       Tel:        0161 819 8875

Katy Mitchell

Chief Executive's Statement

Introduction

I am pleased to report results for Billington Holdings plc for the six months ended 30 June 2013 which, as reported in our trading statement dated 9 July 2013, exceed original market expectations at the start of our financial year. Trading conditions continue to marginally improve, albeit from a very low point, and our 'stability and return to profitability' initiative continues to yield further improvements in the business.

Results

I am happy to report that the trading position of the Group for the six months to June 2013 yielded a trading profit of £0.3 million after adjusting for redundancy costs of £0.1 million. The equivalent period in 2012 was a trading profit of £0.1 million after adjusting for redundancy costs incurred in the period of £0.3 million.

Group revenue decreased by 15% on the equivalent period in 2012, primarily as a result of our continuing policy of targeting added value work and not production volumes in our core Billington Structures business.

Businesses

Structural Steel

Based in Barnsley and Bristol, Billington Structures' primary activity is the design, fabrication and erection of structural steelwork for a wide variety of sectors, primarily to the UK construction industry. During the first half of 2013 we have successfully delivered projects into new markets including rail and energy. A significant fast track project was also secured and completed in Scandinavia during the spring, with the potential to further progress the Group's activities in overseas markets.

Tubecon, our specialist tubular and complex steelwork division, has undertaken a number of high profile and technically challenging projects during the period, including a roof garden structure in the heart of the City of London.

Our joint venture, BS2, with Bourne Construction has tendered a number of projects during the period and we remain optimistic that this relationship will continue to develop.

Peter Marshall Steel Stairs has proved difficult to position in the marketplace. However, with new management now in place and a greater effort on improving our offering to clients, we remain cautiously optimistic that improvements seen in the markets in which Billington Structures operates will begin to permeate into Peter Marshall in the second half of 2013.

Safety Solutions

Based in Tuxford, North Nottinghamshire, easi-edge's main business is the hire of our patented safety barriers to the UK steel and timber frame construction industries. After a slow start to 2013 and with a new team leading the business, utilisation of product has slowly increased. Additional recruitment into the sales team and the development of a system to use our products on precast concrete structures has also improved our potential target audience.   

Our innovative and sustainable site hoardings division, hoard-it, with its head office in Barnsley, continues to develop and increase its customer base.  It has expanded its depot facility, by utilising an area of our Bristol site, in order to better service our growing customer base in the South of England and Wales.

Earnings per Share

Earnings per share from continuing operations were 1.6 pence in the period compared with a loss per share of 1.3 pence for the corresponding period in 2012.

Dividend

The Directors have once again reluctantly decided not to pay an interim dividend at the current time (2012 - no interim dividend) in order to maintain cash reserves in what continues to be an unstable market.

Liquidity and Capital Resources

The Group had a cash balance of £0.4 million at 30 June 2013, compared with £1.0 million at 31 December 2012. The net cash flow from operating activities during the period amounted to an outflow of £0.6 million, which was primarily attributable to an increase in the level of inventories and work in progress since 31 December 2012. Capital expenditure continues to remain at a relatively low level with purchases of new assets being £0.1 million in the period.

The Group continues to support its valued supply chain in this difficult trading environment and pay suppliers within agreed terms.

With a marginal return of confidence in the economy as a whole, the Board considers that having a strong balance sheet with adequate available cash resources and funding facilities enables the Group to be well placed to take advantage of the slow but inevitable economic recovery.

Pension

The Group's remaining final salary pension scheme completed its triennial valuation in 2012. No additional pension contributions were paid to the scheme over the six months to June 2013 as compared to £0.2 million in the period to June 2012. The Group remains committed to the scheme and achieving its overall objective of realising the buyout funding level.

Prospects

The first half of 2013 has seen yet more turbulence in the structural steel sector with the market leader having its own well publicised issues and a further major competitor unexpectedly exiting the market.  Prospects for the sectors in which we operate are beginning to show slight improvements but nonetheless they remain fragile and challenging. 

We have increased our business development and marketing team at Group level and intend to better co-ordinate and utilise our combined resources to offer our customer base a wider range of products and service.

The mandatory introduction of CE marking, which is a key indicator of a product's compliance with EU legislation,into the structural steelwork industry from summer 2014, should help to put more stability back into the sector. Some of the more enlightened major contractors are already insisting on restricting their tender lists to CE compliant steelwork contractors, of which Billington was one of the first to achieve this high standard.

Going forward, I firmly believe that the strength of the Billington brand, the quality of our people, the depth of our balance sheet, our vision, our accreditations, our experience and our industry relationships, will all combine to yield the business further improvements in trading performance.

Board and Employees

Finally, I would like to thank my colleagues on the board, together with all of our loyal employees and stakeholders for their continued support through this difficult but rewarding journey towards our ongoing goal of 'Stability and a return to Profitability'.

Steve Fareham, Chief Executive

Billington Holdings plc

Condensed consolidated interim income statement
Six months ended 30th June 2013
		Unaudited		Unaudited		Audited
		Six months		Six months		Twelve months
		to 30th June		to 30th June		to 31st December
		2013		2012		2012
		£000		£000		£000
Continuing operations
Revenue		17,156		20,108		38,171
Increase/(decrease) in work in progress		1,310		(1,805)		(1,824)
		18,466		18,303		36,347
Raw material and consumables		10,274		10,783		21,402
Other external charges		1,475		1,412		2,946
Staff costs		5,109		5,067		10,027
Redundancy		88		251		322
Depreciation		467		570		1,080
Other operating charges		791		403		1,008
		18,204		18,486		36,785
Group operating profit/(loss)		262		(183)		(438)
Share of post tax profit in joint ventures		0		0		0
Total operating profit/(loss)		262		(183)		(438)
Net finance cost		(10)		(17)		(17)
Profit/(loss) before tax		252		(200)		(455)
Tax		(63)		52		40
Profit/(loss) for the period from continuing operations and attributable to equity holders of the parent company		189		(148)		(415)
Earnings/(loss) per share (basic and diluted) from continuing operations		1.6 p		(1.3 p)		(3.6 p)
Dividends per share		0.00 p		0.00 p		0.00 p
Earnings/(loss) per ordinary share has been calculated on the basis of the result for the period after tax, divided by the weighted average number of ordinary shares in issue in the period, excluding those held in the ESOP Trust, of 11,580,808. The comparatives are calculated by reference to the weighted average number of ordinary shares in issue which were 11,581,408 for the period to 30 June 2012 and 11,581,358 for the year ended 31 December 2012.

Condensed consolidated interim balance sheet
As at 30th June 2013
	Unaudited		Unaudited		Audited
	30th June		30th June		31st December
	2013		2012		2012
	£000		£000		£000
Assets
Non current assets
Property, plant and equipment	7,670		8,389		8,069
Pension assets	384		327		384
Investment in joint ventures	0		0		0
Deferred tax asset	878		862		878
Total non current assets	8,932		9,578		9,331
Current assets
Inventories and work in progress	7,246		5,996		5,897
Trade and other receivables	3,973		4,332		4,218
Cash and cash equivalents	417		1,119		1,012
Total current assets	11,636		11,447		11,127
Total assets	20,568		21,025		20,458
Liabilities
Current liabilities
Current portion of long term borrowings	45		49		45
Trade and other payables	7,626		7,921		7,746
Current tax payable	63		9		0
Total current liabilities	7,734		7,979		7,791
Non current liabilities
Long term borrowings	346		397		368
Total non current liabilities	346		397		368
Total liabilities	8,080		8,376		8,159
Net assets	12,488		12,649		12,299
Equity
Share capital	1,293		1,293		1,293
Share premium	1,864		1,864		1,864
Capital redemption reserve	132		132		132
Other reserve	(909)		(909)		(909)
Accumulated profits	10,108		10,269		9,919
Total equity	12,488		12,649		12,299

Condensed consolidated interim statement of comprehensive income
Six months ended 30th June 2013
		Unaudited		Unaudited		Audited
		Six months		Six months		Twelve months
		to 30th June		to 30th June		to 31st December
		2013		2012		2012
		£000		£000		£000
Profit/(loss) for the period		189		(148)		(415)
Other comprehensive income
	Actuarial loss recognised in the pension scheme	0		0		(110)
	Movement on deferred tax relating to pension liability	0		0		(14)
	Current tax relating to pension liability	0		0		41
Other comprehensive income, net of tax		0		0		(83)
Total comprehensive income for the period attributable to equity holders of the parent company		189		(148)		(498)

Condensed consolidated interim statement of changes in equity
(Unaudited)		Share	Share	Capital	Other	Accumulated	Total
		capital	premium	redemption	reserve -	profits	equity
			account	reserve	ESOP
		£000	£000	£000	£000	£000	£000
	At 1st January 2012	1,293	1,864	132	(909)	10,417	12,797
	Transactions with owners	0	0	0	0	0	0
	Loss for the six months to 30th June 2012	0	0	0	0	(148)	(148)
	Total comprehensive income for the period	0	0	0	0	(148)	(148)
	At 30th June 2012	1,293	1,864	132	(909)	10,269	12,649
	At 1st July 2012	1,293	1,864	132	(909)	10,269	12,649
	Transactions with owners
	ESOP movement in period	0	0	0	0	0	0
	Transactions with owners	0	0	0	0	0	0
	Loss for the six months to 31st December 2012	0	0	0	0	(267)	(267)
	Other comprehensive income
	Actuarial loss recognised in the pension schemes	0	0	0	0	(110)	(110)
	Income tax relating to components of other comprehensive income	0	0	0	0	27	27
	Total comprehensive income for the period	0	0	0	0	(350)	(350)
	At 31st December 2012	1,293	1,864	132	(909)	9,919	12,299
	At 1st January 2013	1,293	1,864	132	(909)	9,919	12,299
	Transactions with owners	0	0	0	0	0	0
	Profit for the six months to 30th June 2013	0	0	0	0	189	189
	Total comprehensive income for the period	0	0	0	0	189	189
	At 30th June 2013	1,293	1,864	132	(909)	10,108	12,488

Condensed consolidated interim cash flow statement
Six months ended 30th June 2013
		Unaudited		Unaudited		Audited
		Six months		Six months		Twelve months
		to 30th June		to 30th June		to 31st December
		2013		2012		2012
		£000		£000		£000
Cash flows from operating activities
Group profit/(loss) after tax		189		(148)		(415)
Tax paid		0		0		(10)
Interest received		0		0		0
Depreciation on property, plant and equipment		467		570		1,080
Difference between pension charge and cash contributions		0		(167)		(167)
(Profit)/loss on sale of property, plant and equipment		(58)		28		(28)
Taxation charge/(credit) recognised in income statement		63		(52)		(40)
Net finance expense		10		17		17
(Increase)/decrease in inventories and work in progress		(1,349)		1,798		1,897
Decrease in trade and other receivables		245		1,790		1,737
Decrease in trade and other payables		(120)		(4,393)		(4,568)
Net cash flow from operating activities		(553)		(557)		(497)
Cash flows from investing activities
Purchase of property, plant and equipment		(74)		(135)		(347)
Proceeds from sale of property, plant and equipment		64		5		83
Net cash flow from investing activities		(10)		(130)		(264)
Cash flows from financing activities
Interest paid		(10)		(17)		(17)
Repayment of bank and other loans		(22)		(16)		(49)
Net cash flow from financing activities		(32)		(33)		(66)
Net decrease in cash and cash equivalents		(595)		(720)		(827)
Cash and cash equivalents at beginning of period		1,012		1,839		1,839
Cash and cash equivalents at end of period		417		1,119		1,012

Notes to the interim accounts - as at 30th June 2013

Segmental Reporting

The continuing operations of Billington Holdings plc operate only in Structural Steel. The Structural Steel segment includes the activities of Billington Structures Limited, Peter Marshall Steel Stairs Limited and easi-edge Limited. The Group activities, comprising services and assets provided to Group companies and a small element of external property rentals and management charges, are considered incidental to the activities of Billington Structures Limited and have therefore not been shown as a separate operating segment but have been subsumed with Structural Steel.  All assets of the Group reside in the UK.

Basis of preparation

These consolidated interim financial statements are for the six months ended 30 June 2013.  They have been prepared with regard to the requirements of IFRS. The financial information set out in these consolidated interim financial statements does not constitute statutory accounts as defined in S434 of the Companies Act 2006.  They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 December 2012 which contained an unqualified audit report and have been filed with the Registrar of Companies.  They did not contain statements under S498 of the Companies Act 2006.

These consolidated interim financial statements have been prepared under the historical cost convention. The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these consolidated interim financial statements.  

Dividends

In the first half of 2013 Billington Holdings Plc has not declared a final dividend in respect of 2012 to its equity shareholders (2012: nil).  No interim dividend for 2013 has been declared (2012: nil).

These results were approved by the Board of Directors on 09 September 2013.

This information is provided by RNS

The company news service from the London Stock Exchange

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