Structural steel and construction safety specialists Billington Holdings (AIM:BILN) saw its shares slide by over 6% on Tuesday, with half year results severely impacted by ‘exceptional’ pandemic trading conditions.
With severe restrictions on construction sector activity, company revenues fell 30.5% year-on-year, to £32.78 million. This led a 55.2% on-year decline in EBITDA, down to £1.59 million, and a 77.2% free-fall in profit before tax, from £2.68 million to £0.61 million.
The situation was equally bleak for Billington shareholders, with earnings per share slipping by 77.0%, from 17.8p, to 4.1p. Further, the company declared a final dividend of 13.0p at the end of H1 2019, and at the end of H1 2020 declared they would be cancelling the dividend in order to conserve cash.
One piece of positive news was that its cash and cash equivalents were up 74.6%, to £17.48 million, likely due to reduced opportunities for investment and reduced operational activity. This, along with yesterday’s news that the company had secured £21m in contracts, gives it a pipeline of future potential, save for further lockdown disruption.
Billington response
Commenting on a difficult period of trading, company CEO, Mark Smith, said:
“Following an exceptional 2019, the first half of the year has been dominated by the impact of the Covid-19 pandemic on the construction sector and the consequential restrictions on site access, project delays and cancellations.”
“We have seen a significant impact on our first half revenue, however with all Group operations having now returned to near full capacity and with the majority of projects having restarted, we look forward to the remainder of the year with cautious optimism. We anticipate improved Group financial performance in the second half of the year, before hopefully moving to more normal trading conditions in 2021 assuming the economy stabilises and commences its recovery from the pandemic.”
Investor notes
Following the announcement, Billington shares took a chunk out of their 10% Monday rally, falling 6.35% or 20.00p, to 295.00p 22/09/20 10:20 BST. It currently has a 59.28% ‘outperform’ rating set by a poll of Marketbeat‘s community, with 115 votes for ‘outperform’ and 79 for ‘underperform’.
It has a p/e ratio of 7.91, which means it is trading at a less expensive rate than most of its industrial sector products peers, who have an average p/e ratio of 21.06.