Billington Holdings – despite a tougher year in 2025 this steel sector player offers excellent value and its shares, after today’s reactive 20% fall to 365p, offer a great buying opportunity, TP 510p

15.04.2025

This morning’s announcement from Billington Holdings (LON:BILN) covered its Final Results for the challenging year to end-December 2024, they were disappointing but could soon offer investors a cheap opportunity to buy into the equity of a ‘class-company’ – but let the market settle a bit before spending your money.

The Results

Reflecting the ‘challenging market backdrop’ group revenues were down 14.6% at £113.1m (£132.5m), pre-tax profits were 19.4% lower at £10.8m (£13.4m), earnings eased 21.6% to 66.2p (84.4p), while the dividend was reduced to 25.0p (33.0p) per share.

It also declared that it was debt-free and had maintained a strong cash balance by the year-end, at some £21.7m.

Net assets were improved at £53.0m (£47.8m), worth about 410p a share.

There is even a £1.9m Pension Surplus.

Management Comment

CEO Mark Smith stated that:

"2024 was a strong performance by Billington, across all its business units, with benefits being seen from the Group's capital investment programme, and our specialist skills and innovative approach, against a very challenging market backdrop, particularly in the second half.

The Group has a strong level of contracts secured for delivery during 2025 and into 2026, combined with a significant pipeline of opportunities. 

However, the overall reduction in industry demand is leading to pricing pressure, particularly as competitors look to secure work to contribute to fixed overhead recovery, and the precise timing of certain projects remains uncertain. 

Despite these challenges Billington remains extremely well positioned within its industry, with a strong balance sheet, strong product offerings and an ability to weather downturns in a way that many of its peers cannot.

We are optimistic that the market will see some recovery later in 2025, although the timing and nature of any upturn in economic confidence is uncertain. 

Billington is very well positioned to take advantage of improved market conditions when they arise and our financial stability and strong orderbook provides cautious optimism for the future."

The Business

The £48m-capitalised group is one of the UK's leading structural steel and construction safety solutions specialists, focused on structural steel and engineering activities throughout the UK and European markets.

Based in Barnsley, the group was set up in 1989 and was previously known as the Amco Corporation.

It changed its name to Billington Holdings in 2008.

Employing nearly 520 people through its various subsidiaries, the group designs, manufactures, and installs structural steel works in the UK, Europe, and internationally.

The company also designs, fabricates, and installs bespoke steel staircases, balustrade systems, and secondary steelwork.

Additionally, it provides safety solutions and barrier systems to the construction industry; protection and fall prevention systems; complex steel structures primarily for the construction and rail infrastructure markets; and site hoarding solutions.

It provides services to construction projects across various sectors, including defence, commercial, education, health, industrial, infrastructure, leisure, residential, retail, distribution, energy, and data centres. 

Billington declares that it is becoming the steelwork contractor of choice for its clients.

The group’s operations are split into two main divisions – Structural Steel, some 89% of group sales; and Safety Solutions, about 9% of revenues.

Strong Order Book

That order book spans multiple market sectors, with the group having been successful in securing a number of significant, good-quality contracts particularly in sectors that require more complex solutions such as energy from waste, high-tech manufacturing and data centres.

The group reported that it has a strong order book for the remainder of 2025, and into 2026, and whilst certain project timings remain uncertain and pricing pressures have increased in recent times, in what is becoming a very challenging market, the group is well placed for the future.

Billington has grown market share in all its areas of focus and is well placed for the future to navigate challenging economic times and take advantage of opportunities. 

In particular, Billington's market position, historic and ongoing investment programme, and substantial order book means that the group is well positioned to cope with increasing pricing pressures being experienced in a market suffering from reduced demand, reflective of the current lack of UK economic confidence.

The Equity

There are 13,334,327 shares in issue.

The larger holders include Gutenga Investments (19.40%), Trinity Bridge (10.64%), Charles Stanley Group (10.50%), GPIM (5.60%), Ocorian Trustees Jersey (5.14%), Otus Capital Management (4.12%), IG Markets (3.83%), Canaccord Genuity Wealth (3.32%), HSBC Global Asset Management (1.22%), Hargreaves Lansdown Asset Management (0.98%), Morgan Stanley (0.57%), KW Investment Management (0.17%) and Evelyn Partners Investment Management (0.16%).

Broker’s View

Analyst David Buxton, at Cavendish Capital Markets, has today reduced his Target Price from 610p to 510p for the group’s shares, however he still rates them as a Buy.

His current year estimates to end-December 2025 are for slightly increased revenues to £115.0m (£113.1m), but with adjusted pre-tax profits lower at £7.3m (£10.0m), dropping earnings to 40.5p (61.9p) and lowering its dividend to 16.5p (25.0p) per share.

For next year he sees a sales increase to £125.0m to lift slightly its profits to £8.3m, with 44.8p of earnings and paying out a dividend of 18.5p a share.

My View

Despite its recent challenges Billington remains extremely well positioned within its industry, with a strong balance sheet, strong product offerings and an ability to weather downturns in a way that many of its peers cannot.

It may well take some time for the hassles within the steel sector to smooth down, but I believe that Billington will pull through and motor ahead in due course.

However, the pull-back in this group’s shares to the current 365p offers risk-tolerant investors, taking a medium-term view, an excellent buying opportunity.

(Profile 02.04.19 @ 266p set a Target Price of 314.5p*) 

(Profile 13.06.22 @ 217.5p set a Target Price of 295p*) 

Billington invests in Laser Cutting Technology

(Asterisks * denote that Target prices have been achieved since Profile publication)