Structural steel fabricator Billington Holdings has revealed that its pre-tax profit dropped by almost a fifth in 2024 – with an even steeper fall expected this year.
The Yorkshire firm cited a “very challenging market” characterised by “reduced demand” and “increasing pricing pressures”.
Billington saw its pre-tax profit slip from £13.4m in the 12 months to 31 December 2023 to £10.8m in the 2024 calendar year.
It added that it expected this slide to gather pace, with a forecast figure of £7.25m for the 2025 calendar year.
Revenue fell by 15 per cent from £132.5m in 2023 to £113.1m last year and is only expected to be “slightly ahead” of this in the current period, the steel specialist said on 15 April in a stock exchange announcement.
Its margin narrowed to 9.5 per cent from 10 per cent the year before.
Based on its 2023 accounts, Billington finished fourth in the most recent CN Specialists Index of structural steel contractors.
“The overall structural steel market currently remains subdued, with poor overall business confidence and increasing pricing pressure on projects being tendered,” non-executive chairman Ian Lawson said in the latest accounts.
“Order placement delays and contract deferments are increasingly being noted as a result of poor consumer and business confidence.”
Lawson said Billington was “very well placed” to cope with these issues, but added that expectations for 2025 had been reduced “to reflect current market conditions”.
UK consumption of structural steelwork fell by more than 4 per cent last year, he pointed out.
“Some of the markets in which Billington operated continue to see reduced levels of activity from historic levels, particularly large office developments and industrial warehousing development,” Lawson added.
He said the firm took “the maximum available cover” against contractor collapse and had “materially restricted” the impact of ISG’s high-profile administration to the excess on its credit insurance policy.
Lawson referenced British Steel’s intention to close its UK blast furnaces but said “there is not anticipated to be any impact” in the producer’s ability to service the construction sector.
The situation with British Steel escalated rapidly in recent days with business secretary Jonathan Reynolds telling parliament during an emergency recall on Saturday (12 April) that the Chinese owner of the company’s Scunthorpe operations wanted to “refuse to purchase sufficient raw materials” to keep them operational.
“The company would, therefore, have irrevocably and unilaterally closed down primary steelmaking at British Steel,” said the minister.
However, in an update this morning (15 April), Reynolds said the immediate threat had abated.
“We have moved decisively to secure the raw materials we need to help save British Steel,” he announced.
“It is important for the UK as a whole that we maintain the ability to manufacture steel, either via virgin steel making or electric arc production rather than being restricted or constrained to obtain the raw product from the worldwide market,” Billington chief executive Mark Smith told Construction News.
“This provides economic security in a number of sectors like defence, construction, and infrastructure.”
Chief financial officer Trevor Taylor said structural steelwork consumption is forecast to rise by less than 2 per cent in both this year and next.
He added that the firm’s revenue dropped last year “principally as a result of an increased mix of complex, labour-intensive contracts with a lower proportion of steel content relative to productive labour requirements”.
However, “forecast reductions in interest rates and a more stable economic landscape in the UK in second half of 2025 are anticipated to have a positive impact across the sector,” Taylor added, saying this “allows the company to look forward with optimism”.
Billington’s cash at hand at the end of 2024 was £21.7m, down from £22.1m a year earlier. There were no loan borrowings.
“The strong cash position leaves the group well placed to achieve both its short- and long-term objectives to maximise returns, while providing financial security and providing the ability to invest and seek opportunities for further diversification,” said Taylor.
The firm’s average monthly staff headcount increased by 8 per cent to 488 last year and it has recommended a 25p per share dividend payout, up from 20p the previous year.
Billington also said it will complete a “programme of capital additions” in 2025 within its structural steel operations.
“The additional capital expenditure will support both an increase in the range of services the company can offer, as well as replacing a number of aged machines with more efficient models,” it added.
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Greg Pitcher