(Alliance News) - Bilby PLC on Monday said it swung to a profit in its most recent financial year under its new chief executive, who led the board in its restructuring of a loss-making subsidiary.
Shares in Bilby were up 20% at 20.95 pence in London in morning trading.
The London-headquartered gas heating, electrical and building services firm reported a GBP1.7 million pretax profit for its year ended March 31, swinging from a GBP10.4 million loss the year before.
Revenue was 1.7% lower at GBP65.4 million compared to GBP66.5 million the year before. However, cost of sales fell more sharply to GBP48.8 million from GBP57.1 million. This 15% cost of sales drop meant that gross profit was much higher at GBP16.6 million from GBP9.5 million.
On top of lower cost of sales, Bilby also reported a 27% fall in administrative expenses to GBP14.3 million compared to GBP19.6 million the previous year, helping the company swing to an operating profit of GBP2.3 million from a GP10.1 million operating loss in financial 2019.
David Bullen came on board as new CEO at the start of Bilby's financial year and "accelerated an operational and financial review" of the company. The board then took steps to restructure Bilby's loss-making P&R subsidiary where, as Chair Sangita Shah explained, "historical governance failings had led to the group's poor financial performance in the previous year".
Shah noted that the "residual profitable services within P&R" have now been integrated into Bilby's profitable Purdy subsidiary. Alongside this, the company has invested in financial and accounting systems.
Shah also commented on the Covid-19 outbreak, stating that it "has presented immense challenges to Bilby".
"At this stage, whilst it is difficult to forecast the medium to long-term impact of the pandemic on the business, with the strengthened board and the measures taken in our underlying business processes, we continue to build in resilience and agility to ensure that impacts are mitigated," Shah said.
CEO Bullen said: "I am pleased with the progress that was made last year in addressing the loss-making divisions and implementing the organisational changes required within the group. Our strong financial recovery reflects the extent of what has been achieved at an operational level, building a solid foundation upon which to grow the business and create long-term sustainable value for all stakeholders."
He added: "The group is in a far stronger position than it was a year ago, and I am confident that our collaborative culture and focus on high-quality customer service will ensure Bilby emerges in a strong position to deliver sustainable, profitable growth that creates value for our investors, customers and stakeholders alike."
By Anna Farley; annafarley@alliancenews.com
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