Billington Share News (BILN)

AIM-quoted structural steel supplier Billington Holdings has reported lower revenues and profit for 2010 but there is hope for the longer-term. Management says that there are signs of an upturn in the structural steel market but margins are coming under continued pressure. Revenues from continuing operations slumped from £57.2m to £42.3m in 2010, mainly due to lower structural steel revenues. Pre-tax profit slumped from £5.34m to £1.37m. Many of the contracts fulfilled in the period were gained when margins were better but these have been worked through and more recent contracts are at lower margins. Group revenues are likely to grow this year but margins are coming under even more pressure. Steel costs are rising which is putting even more pressure on margins. The new tubular steel business has done even better than expects. There is less competition in this area because of the complex and small nature of contracts. The easi-edge steel barrier edge protection systems supplier continues to add to its market share and it has developed a similar product for timber structures. The business is investing in more systems to rent to customers and it is opening a new depot in Bristol. The interim dividend was cut from 3.25p a share to 2.75p a share and there is no final dividend. It is possible that there will be no dividend in 2011 because Billington wants to conserve its cash. Net cash has fallen from £8.49m to £4.85m in the year to December 2010. There is a small pensions surplus at the end of 2010. New house broker WH Ireland forecasts a small loss for 2011.