AIM-quoted steel structures supplier Billington (LON: BILN) has increased its full year dividend from 3p a share to 15.5p a share on the back of a sharp recovery in profit.
In 2022, revenues edged up from £82.7m to £86.6m, but pre-tax profit jumped from £1.3m to £5.8m. The dividend is 2.5 times covered by earnings. There is £11.6m in cash. There is a £1.63m pension surplus, net of deferred tax.
The steel structures division went from an operating profit of £98,000 to £4.44m. The new specialist protective coatings business is making a contribution. Projects were undertaken at Shepperton Film Studios and Sandwell Aquatics Centre. The order book is strong and there have been new orders and opportunities for energy-to-waste facilities, warehousing and battery factories.
Capital spending is helping to improve efficiency and margins. Energy prices were fixed, but this is coming to an end. Prices are falling back. Order margins are improving.
There was also a significant improvement in the profit from Easi-Edge and Hoard-it businesses. Weaker construction markets may hold back progress.
Management is considering opening a sales office in Europe and using some of its cash to make acquisitions. This could diversify the range of services offered.
The 2023 pre-tax profit forecast has been trimmed, but an increase to £8m is still expected. The cash pile should continue to grow.
The share price dipped 1.3% to 390p, which is still near to the three-year high. The prospective multiple is less than eight and the forecast yield is more than 5%.
