Billington Holdings Plc posted a pre-tax profit of £4.6m in the first half of the year, up from £1.3m in the equivalent period in 2022.
The Barnsley-based group of structural steel and safety solutions companies attributed its performance to the softening of rising energy prices and falling steel prices.
Billington chief executive Mark Smith said: “While we are mindful of continued inflationary pressures and an uncertain macroeconomic outlook, we anticipate a robust performance in the second half of the year for the group.
“I believe Billington is very well positioned to meet the challenges in the market and I now expect the group to deliver full-year profits ahead of the previous board’s expectations.”
In the first half of 2023, the company saw a 30% increase in year-on-year revenue from £46.2m to £60.2m. Its group-wide operating profit margin stood at 7.6 percent.
Billington grew its workforce by about 10 percent in the first half of the year, hiring about 40 people. Many of them were recruited from overseas, which Smith said reflected a shortfall in UK training.
He said the company’s pipeline had been boosted by work on energy-from-waste facilities, data centers and online retail distribution warehouses, although he noted that demand for this last was decreasing.
Smith added that developers were more likely to aim to pre-let significant parts of new schemes, meaning fewer speculative projects were being given the green light. It also reported a decrease in demand for offices.
Smith said the company had managed to dodge the impact of industry insolvencies over the past year, largely by targeting business with the more stable prime contractors.
Billington had worked at a large distribution center for the Buckingham Group, but completed the contract on the spot the contractor collapsed.
The company had been affected by the delays ISG’s £700m film studio project, and Smith acknowledged the difficulties in securing credit insurance for customers amid high levels of construction insolvencies. “In times of uncertainty, insurers are as nervous as anyone and seek to mitigate their risk by reducing the number of contracts they sign,” he remarked.
Billington has also been supplying sections of heavy steel plates to contractors working on HS2, although Smith said the company would not be greatly affected if the Stage Birmingham-Manchester they were to be removed, as recently rumored.
Withholding payments throughout the supply chain continues to be an issue for Billington. “Sometimes the retention that’s held is more than the full benefits of the plan — when it’s held for 12 months, or even 24 months, it’s unacceptable,” Smith said.
He added that his team had been looking into retention bonds, although their cost had increased due to the insolvency of the contractor and the client.
