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magazineBillington remains cheap despite decent profit growth
Billington (BILN:AIM) 260.55p
Gain to date: 3.4%
Original entry price: Buy at 252.2p, 24 August 2017
Given the volatile performance of the wider market, the fact our positive call on structural steel specialist Billington (BILN:AIM) is in positive territory at all is some achievement.
Full year results (27 Mar) revealed a 16% increase in pre-tax profit to £4.4m in 2017 and a maintained margin performance. The company also has a strong forward order book and boosted its dividend by 15% to 11.5p.
Crucially the company was largely unaffected by the fall-out from the collapse of Carillion with a hit of just £106,000.
The cost of structural steel sections, the main raw material for the business, has risen 40% in the last two years but management are hopeful prices will now begin to stabilise. The completion of improvement works at its Shafton site, acquired in 2016, should help it control costs.
Profitability has been somewhat pressured as contract decisions are delayed thanks to the uncertainty created by Brexit.
A small number of projects were completed in mainland Europe in 2017 and the company is pursuing further opportunities outside its core UK market.
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