25th Mar 2014 15:11
LONDON (Alliance News) - Billington Holdings PLC Tuesday said it swung to a pretax profit in 2013 as cost cutting lifted margins and offset a decline in revenues, and the company said it entered this year with its strongest order book for five years relative to its output capacity.
Billington said its structural steel business improved significantly last year, as it benefited from restructuring it did in 2011 and 2012 and as trading conditions improved throughout 2013. It is now going after high-margin business rather than volume.
The structural steel and construction safety technology company said it swung to a pretax profit of GBP720,000 in 2013 compared with a pretax loss of GBP455,000 in 2012, despite a 1.6% drop in revenues to GBP37.6 million, from GBP38.2 million.
Billington said the results were in line with current market expectations, although its pretax profit excluding redundancy costs was more than double the market expectations that were in place at the start of 2013. That figure was GBP929,000 compared with a loss of GBP133,000 in 2012.
"There is no doubt the market will remain challenging in 2014 but management is of the view that we should continue to see further improvement during the course of the year and, as we are starting from a much healthier position than twelve months ago, this will translate into a further improvement in profitability," the company said in a statement.
Billington, which is backed by Henderson Global Investors among other investors, said it has decided not to pay a dividend again as it needs its cash to support an anticipated increase in its activity. However, it also said it remains committed to paying a dividend at the earliest opportunity.
Its cash balance stood at GBP2.6 million at the end of 2013 after it booked a net cash inflow of GBP1.6 million during the year. It said this should be enough to cover its projected working capital requirements.
"The requirement to fund higher levels of work in progress and debtors and to manage the expectations of suppliers will require careful management, as will the need to ensure that funds are set aside for replacement and improvement of capital equipment to maintain and improve the quality of output," it said.
Billington shares were up 1.9% to 137.00 pence Tuesday.
By Tom McIvor; [email protected]; @TomMcIvor1
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