News blog
Billington Holdings
- BY: Andrew Hore |
- POSTED: 15/09/2008 |
Structural steel and mining equipment supplier Billington Holdings increased its interim profits.
An improved contribution from the structural steels division and a reduced loss from mine tunnelling equipment manufacturer Dosco meant that profits on continuing activities rose 31% to £2.32m. Revenues increased from £28m to £35.5m in the six months to June 2008.
Billington Holdings was formerly known as AMCO Corporation. It has a structural steel business that includes structural steel products, arches for underground mining and safety solutions for people working at height. Billington also owns Dosco, which supplies mine tunnelling equipment.
The structural steel business is benefiting from investment in schools, while there is additional demand for underground arches because of additional investment in the UK coal industry. Longer-term, management believes that the investment in new safety products by the easi-edge subsidiary will increase its profit contribution.
Dosco reduced its loss from £661,000 to £339,000. Dosco made a profit for 2007 as a whole and the current order book suggests that it will be profitable this year. Orders can be lumpy so the revenues of the business are difficult to predict. It does appear that the order book stretches into next year, though.
The sale of non-core activities raised £7m in the period. Billington had net cash of £11.7m at the end of June. Executive chairman Peter Hems is in no hurry to spend the cash but there may be acquisition opportunities in the future.
The interim dividend was increased by 0.25p to 3.75p a share.
The interim figures sparked some interest in the shares and they rose 10p to 175p. A bid/offer spread of 150p-200p does not help liquidity.
Billington is cautious about a possible downturn but at the moment it is still trading strongly. It is valued at £22.6m.
A forecast profit of £5m for this year puts the shares on less than six times prospective 2008 earnings. The forecast yield is 6.6%.
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