Billington Regulatory News (BILN)

Press Release 11 September 2012

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 2012.

¹ EBITDA adjusted for redundancy costs of £251,000

Highlights

·; Results in line with management's expectations

·; Adjusted EBITDA¹ increased by £554,000 to £638,000 (2011: £84,000)

·; Reduced loss before tax of £200,000, an improvement of £355,000 against a loss of £555,000 in the corresponding period last year

·; Reduced loss per share of 1.3p, an improvement of 2.2p against loss per share of 3.5p in the corresponding period last year

·; Balance sheet strength remains, with cash and cash equivalents of £1.1m

·; Market remains challenging, although tentative signs of margin recovery; Billington well placed to capitalise on expected, gradual market recovery from 2013 onwards

Steve Fareham, Chief Executive, commented:

"Although the markets in which we operate remain challenging, the Board feels that the actions taken this year and last, in response to the strategic review that the Group carried out, have resulted in a more efficient business that is well placed to build on the strong position we hold in the structural steel market.

"While we continue to monitor our cost base carefully, and having achieved a pleasing improvement in underlying profitability, our focus now turns to restoring the Group to post-tax profitability by gaining market share and seeking additional, alternative markets that offer our Group growth potential.

"We look to the future with cautious optimism and are confident that the combination of our robust balance sheet, experience and strong industry relationships leave us well placed to benefit from the expected medium-term recovery."

For further information please contact:

Billington Holdings Plc Tel: 01226 340666

Peter HemsExecutive Chairman

Steve FarehamChief Executive

Blythe Weigh Communications Tel: 020 7138 3204

Paul Weigh Mob: 07989 129658 Tim Blythe Mob: 07816 924626

W H Ireland Limited Tel: 0161 819 8875

Katy Mitchell

Chief Executive's Statement

Introduction

I am able to report results for Billington Holdings plc for the six months ended 30 June 2012 which are broadly in line with market expectations. Trading conditions continue to remain difficult, however, our stability and return to profitability initiative is beginning to yield improvements in the business.

Results

I am happy to report that the trading position of the Group for the six months to June 2012 yielded a trading profit of £0.1 million after adjusting for redundancy costs incurred in the period of £0.3 million. The equivalent period in 2011 resulted in a loss being incurred of £0.6 million.

Group revenue decreased by 12% on the equivalent period in 2011, primarily as a result of reverting back to a single shift arrangement within the Group's main business of Billington Structures Limited in a conscious effort to target added value work and not production volumes whilst there remains overcapacity within the structural steel market.

Businesses

Structural Steel

Based in Barnsley and Bristol, Billington Structures' main business is the design, fabrication and erection of structural steelwork for a wide variety of sectors, including supermarkets, education, commercial buildings, waste and military establishments. Investigation of alternative markets and products remains firmly on track and we are hopeful that some of these will come to fruition in the second half of 2012. After a difficult start to the year with significant redundancies and changes in positions the new management team have settled well into their respective roles. The disputed contracts that severely affected our 2011 performance have all been satisfactorily resolved.

The transition to single shift operations at both factories has significantly reduced our output but there have been notable improvements in operational efficiencies. Tubecon, our specialist tubular and complex steelwork division, has undertaken a number of high profile technically challenging projects during the period.

Our joint venture, BS2, with Bourne Construction remains focussed and a number of large projects have been bid to date with further expected to follow.

Peter Marshall Steel Stairs has re-established itself as a major player in the UK steel staircase market and order intakes through recent weeks have been encouraging.

Safety Solutions

Based in Tuxford, North Nottinghamshire, easi-edge's main business is the hire of patented safety barriers to the UK steel and timber frame construction industries. Pressure has been growing on the use of such barriers with contractors clearly cutting costs and in some cases standards. This, when coupled with a reduction in intra Group orders, has seen a significant reduction in its utilisation.

Our hoard-it site hoardings division, based in Wombwell, after a slow start to 2012 has seen a period of rapid expansion. The percentage of products hired to major contractors has increased, necessitating a revision to its former business model that anticipated the product would be primarily sale.

Earnings per Share

Loss per share from continuing operations was 1.3 pence in the period compared with a loss per share of 3.5 pence for the corresponding period in 2011.

Dividend

The Directors have once again reluctantly decided not to pay an interim dividend at the current time (2011 - 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 £1.1 million at 30 June 2012, compared with £1.8 million at 31 December 2011 and £2.7 million at 30 June 2011. The net cash flow from operating activities during the period amounted to an outflow of £0.6 million, which was primarily attributable to a decrease in the level of trade and other payables, net of smaller decreases in trade and other receivables and inventories and work in progress since 31 December 2011. The net cash flow from investing activities amounted to an outflow of £0.1 million, with the majority of the capital expenditure related to additional hire products for easi-edge.

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

In the current climate of uncertainty for the construction industry generally, the Board considers that having a strong balance sheet with adequate available cash resources and bank 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 the period. Additional pension contributions were paid to the scheme over the six months to June 2012 of £0.2 million. The Group remains committed to the scheme and achieving its overall objective of realising the buyout funding level.

Prospects

Prospects for the sectors in which we operate remain challenging. We expect current margins on contracts to be slender throughout the remainder of 2012, with a further small element of recovery in 2013. 

There have been a number of business failures in the steelwork contracting sector during the period and we would be surprised not to see more in Q3 and Q4. TATA's forecast for the sector does indicate some slight growth for both 2012 and 2013².

We are mid way through a full review of how we market and promote all of the Group's activities. We anticipate that by the end of 2012 we will be in a better position to offer our various customers a wider range of products and services and to gain entry into alternative market sectors.

I believe that Billington possesses the balance sheet, vision, experience and expanding industry relationships to enable it to move forward, further increase market share and become the preferred supplier of structural steelwork and related activities across the industry.

Board and Employees

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

May I also wish Darren Kemplay, our HR manager, and Les Holloway, our Company Secretary, speedy recoveries and returns to work after protracted periods of illness.

² Page 29 BCSA annual review 2011-12