Billington profit upgrade after strong first-half

Aaron Morby 2 years ago

Stock market-listed steelwork contractor Billington has raised its full-year profit forecast on the back of a strong first six months of trading.

Chief executive Mark Smith says despite economic headwind there is a stream of opportunities at improved margins
Chief executive Mark Smith says despite economic headwind there is a stream of opportunities at improved margins

The firm has benefited from rising orders and ploughed available cash into stockpiling steel to mitigate sharp hikes in steel prices.

Chief executive Mark Smith said Billington had a strong start to the year and invested heavily in new machinery and forward ordering steel to protect the firm and its customers.

Revenue over the first six months rose 22% to £46m generating a 71% hike in pre-tax profit to £1.3m.

Smith said orders from online retailers, energy from waste plants, data and film industry clients had driven activity beyond expectations in the first half and continued to offer a strong pipeline of work ahead.

He added: “While macroeconomic headwinds are likely to remain for some time, particularly with regard to material availability, price volatility and continuing inflationary pressures, we are seeing a consistent stream of opportunities at better margins.

“Billington continues to be a robust business with a strong balance sheet, with limited borrowings and has weathered the pandemic well.

“I now expect the group to deliver profits for the full year and for FY23, ahead of previous board expectations.”

He said that Billington would also now look to expand into growing infrastructure markets using its Shafton Steel Services operation, which specialises in heavy plate.

Billington also invested in its newly formed Specialist Protective Coatings arm formed following the purchase of Orrmac Coatings Ltd out of administration in January.

It will service all of Billington’s work and offer a service to the wider structural steel sector.

Smith said the weaker pound would reopen export markets.

“We see there is a real opportunity to reignite opportunities in Europe where Billington has previously worked

“We’ve previously worked on projects in France, Belgium, Holland and Finland with success and see opportunities for retail warehouses, data centres and energy from waste projects, where we would fabricate in the UK and ship to Europe for installation.”

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