Profits collapsed at the steel specialist but it is still in the black and has £4.9m in the bank
Billington bosses have called the bottom of the cycle after a tough year in 2010, which saw revenues fall 26% to £42.3m, compared to £57.2m in 2009, while profits fell from £5.3m in 2009, to £1.4m in 2010.
Billingtom chief executive Steve Fareham said: “I now believe we have reached the bottom of the cycle. We have seen a number of major and minor competitors removed from the sector either voluntarily or as a result of financial collapse.
“Recent and forecast increases in raw material prices will add further pressures and I have no doubt that further consolidation will be inevitable. Unsustainable bids below real cost remain a threat to many.”
Clearly, risks still remain but in an attempt to win work from the resurgent commercial sector in London, the Barnsley based firm has formed a joint venture, BS2, thought to include its rival, Bourne Steel.
Fareham added: “We are particularly encouraged by the resurgence of interest in our specialist tubular steelwork contractor ’Tubecon’.
“Other initiatives include the signing of a co-operation agreement with a similar sized steelwork contractor with a view to offering a joint venture to be known as BS2, thereby providing an alternative major competitor to the UK market place.
“BS2 is intended to focus on the high rise London commercial market, which appears to be an increasing opportunity in 2012 and beyond.”
Commenting on the results, Billington chairman Peter Hems said: “2010 was another challenging year for the construction and structural steelwork industry.
“Despite this we have remained profitable and ended the year with a net cash balance of £4.9 million.
“The disposal of our loss making non-core assets, Dosco and Hollybank last year, allowed us to focus on our main business of structural steel and related building safety systems, which we believe leaves us better placed for recovery.”