Restructure pays off for Billington

STRUCTURAL steel company Billington Holdings said this morning it has made a positive start to the year and is now trading ahead of market expectations.

In a trading statement for the six months to June 30, the Barnsley-based business attributed the improvement to a combination of the group benefiting from a restructuring process and an improvement in underlying trading performance.

Following a “wide-ranging” operational review, Billington said annualised costs savings of £2.8m have been delivered in order to appropriately right size group operations to market conditions.

“The benefit of this action is now being realised,” the company said.

“Encouragingly, the group’s trading performance has also improved. Margins in the company’s core structural steel business have improved albeit from historically low levels, partly as a result of capacity exiting the market and tenders now being bid for at more realistic levels.

“Additionally, the group’s efforts to diversify its business offering, reducing the company’s historic reliance on its traditional construction related structural steel business, and focus on new sectors including rail and energy, has enhanced trading performance and presented new areas of opportunity for the business.”

Billington also said that is has broadened its geographic scope and this financial year has, for the first time, won tenders in Northern Europe.

Chief executive Steve Fareham said: “The group’s balance sheet remains robust and the group’s order book is healthy, leaving the board confident that the improvement in trading will continue throughout the remainder of the current financial year.”

“While market conditions remain challenging, the board is confident that the combination of restructuring action taken by the group and genuine, if tentative, signs of sustainable market improvement should ensure that Billington is well placed to deliver sustainable growth throughout 2013 and beyond.”

Billington expects to release its interim results at the end of September.

For 2012, Billington posted annual results in the red but said the performance had been expected.

Revenues were £38.2m, down from £53.9m the previous year while the company posted a loss before tax of £500,000, an improvement from a loss of £2.2m last time.

The loss before tax for the year, excluding redundancy costs, improved by £1.6m to £100,000.