Billington: focus on steelwork lifts profit level

Billington Holdings, the structural steel specialist, has lifted its interim pre-tax profit to £2.3m.

Peter Hems, executive chairman, said: “The orderbook is at a record high at £55m which will see us through 2008 and well into 2009.”

Last year, the non-core construction operation was sold to its management in a £7m buy-out.

Billington’s latest figures (six months to 30 June 2008) show turnover of £36m, a rise of £9m. There was a pre-tax profit of £1.8m in the first half of last year.

“We are delighted that the group’s restructuring has returned such favourable results,” said Hems. “The core businesses which we have chosen to focus on have profited from our emphasis on the public sector and in health and safety equipment.”

“Billington is still working for its regular customers. We were not too exposed to the residential market.

“Typically, we are working in 99 cases out of 100 for main contractors. Some new major BSF contracts in the education sector are  about to break and we are working back-to-back with a main contractor on a few of these.

“On a lot of BSF’s we get involved months, and on some years, before they come to fruition.

“Early involvement is improving as more major contractors look to tie up their supply chain. We’ve worked quite hard in getting ourselves approved by these people.

“Sure, the bid costs are higher when you have an early involvement but you hope that the strike rate will rise.”

Billington Structures, the name of the trading company, describes its ‘bread and butter’ projects as those falling into the £1m to £6m band. It has six of these on the go at the moment.

At the top end of the scale, Billington has three projects each with a value of more than £7m.

The money from the MBO has boosted Billington’s cash balance to £12m.

“Some is being used to meet the normal call for working capital,” said Hems. “The balance will be invested in the existing business, either to buy another company or invest in new equipment.

“We’re not rushing to do anything as basically, these days, we’d prefer to have a cash balance.”