Billington Holdings Plc Annual Report 2019

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FY2019 Annual Report · Billington Holdings Plc

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Report and
Financial Statements

Y EA R END ED 31 DECEMBER 2019

Contents

Chairman’s Statement

Operating Divisions

Five Year Summary

Operational Review

Financial Review

Board Profile and Registered Office

Report of the Directors

Strategic Report

Sustainable and Responsible Business

Governance Report

Independent Auditor’s Report

Consolidated Income Statement

Consolidated Statement of Comprehensive Income

Consolidated Balance Sheet

Consolidated Statement of Changes in Equity

Consolidated Cash Flow Statement

Principal Accounting Policies

Notes Forming Part of the Group Financial
Statements

Parent Company Statement of Financial Position

Parent Company Statement of Changes in Equity

Notes Forming Part of the Parent Company
Financial Statements

London School of Economics, London

Chairman’s Statement

I am pleased to report that in 2019 Billington achieved
a record performance. Strong cash generation provides
a solid foundation for the Group to progress.

Revenue increased by 35.7 per cent to £104.9 million (2018: £77.3

offer our clients. The conclusion of 2019 noted an increasingly

million) and profit before tax increased by 20.4 per cent to £5.9

competitive market and as Covid-19 has become more prevalent a

million (2018: £4.9 million).

small number of contract commencements have been deferred.

The overall Earnings Per Share (EPS) for the year amounted to

The easi-edge perimeter edge protection and fall prevention

39.8 pence compared with 33.6 pence in 2018, an 18.5 per cent

business had its best ever year, with further investment in stock,

increase. Our balance sheet continued to strengthen with Net

high utilisation and new customer wins. The business entered

Assets of £28.1 million at 31 December 2019 (31 December 2018:

2020 with a good degree of forward visibility although more

£23.5 million), driven by strong cash generation leading to a gross

recently has noted some project delays that could impact the

cash balance of £17.9 million at 31 December 2019 (31 December

utilisation of its products during 2020.

2018: £9.3 million), providing a solid foundation for the Group to
progress.

Peter Marshall Steel Stairs again achieved a strong performance,

continuing to focus on securing larger contracts with our partner

Sadly, after such a positive year we are now faced with the serious

clients. We continue to invest in the business and while the

potential consequences of the Covid-19. Since the escalation

orderbook remains satisfactory a number of contract delays have

of the pandemic, the Board has been focused on taking actions

been noted.

to preserve cash and protect liquidity in a way that does not

compromise the long-term prospects of the business. These

hoard-it continued to grow and in 2019 recorded its best

include deferral of all non-essential capital expenditure, a hiring

performance to date. With an excellent market position and a

freeze, cost reductions, agreed additional banking facilities,

focus on expanding the business into the residential construction

deferral of VAT payments and utilisation of the Government’s Job

market, the outlook remains positive in what is a competitive and

Retention Scheme. In addition, the Board has decided to suspend

price sensitive market.

payment of the dividend which would ordinarily have been paid to

shareholders in July 2020. We understand the importance of the

dividend to our shareholders and will keep our dividend policy

under review in the coming months.

Pension Scheme
The defined benefit pension (closed to future accrual in 2011) has

performed well in the period with an increased surplus, despite

a backdrop of continued volatility in the equity market. At 31

The Board believe these actions to be prudent with the uncertain

December 2019 a surplus of £2,205,000 (2018: £1,630,000) along

economic outlook, notwithstanding the non-discretionary nature

with a corresponding deferred tax liability of £375,000, has resulted

of much of our work and the covenant strength of our customers.

Nevertheless, at this stage we are not able to quantify the impact

on our full year results and consequently the Board does not

believe it would be appropriate to provide forward looking financial
guidance until greater clarity returns.

In 2019 there was a slight reduction in the Group operating margin

to 5.7 per cent (2018: 6.3 per cent), reflecting the nature of the

contracts undertaken during the year and some pricing pressure

in the structural steel business, particularly in the later part

of the year. However, we continue to seek cost savings and the

opportunity for margin improvement where appropriate. Whilst

margin pressures remain in the structural steel market, we

believe our continued focus on and delivery of larger contracts

leaves the Company well positioned for the future.

During the year our structural steel businesses, Billington

Structures and Shafton Steel Services operated at near full

capacity, delivering a number of exceptional projects, improving

productivity and further increasing the range of services we can

in a net recognised surplus of £1,830,000 (2018: £1,353,000).

Dividend
2019 was an exceptional year for the Group and the Board,

under ordinary circumstances would have sought to maintain its

progressive dividend policy. However, prudently, we have resolved

to suspend the dividend at this time.

Liquidity and capital reserves
There has been a significantly increased net cash inflow of £8.5

million during the year (2018: £1.2 million) resulting in gross

cash balances of £17.9 million at the year end. Going forward the

Group’s cash performance provides strong cover for its working

capital requirements and a robust position from which to take

the Group forward. Capital expenditure for 2020 is forecast to

increase as the Group seeks to further enhance its manufacturing

capabilities, and to replace some aged capital equipment when it

is prudent to do so.

The Wave - Coventry

Board movements and Our People
2019 was my first full year as Chairman of the Company and

I have been extremely impressed by the skills, dedication and

commitment to Billington shown by our people. I would like to take

this opportunity to thank all our workforce for their efforts in 2019

and I know they will continue to deliver exceptional performances

for Billington, particularly in the light of the new challenges we are

facing.

During the year we increased our workforce by 5.3 per cent.

Through hard work and appropriate utilisation of the available
resources we were able to deliver a 35.7 per cent increase in

revenue.

Economic Outlook
Whilst the General Election in December 2019 and the UK’s

departure from the European Union (EU) at the end of January

2020 has reduced some uncertainty, a measure will remain until

the nature of the UK’s future trading relationship with the EU is

resolved.

The Group does source some products from Europe, either directly

or indirectly via its network of suppliers and subcontractors, but

we are conscious of not relying on one source for key supplies

to mitigate the inherent risks to an acceptable level. The recent

purchase of British Steel by Jingye on 9 March 2020 provides the

Company and the wider steel industry with stability and increased

certainty of uninterrupted supply moving forward.

Current forecasts for the UK structural steelwork industry are for

the market to increase by 3.9 per cent in 2020 and a further 3.6 per

cent in 2021 following a fall of 2.4 per cent in 2019. These forecasts

are likely to be subject to revision as the impact of Covid-19 is

assessed.

Opportunities exist across Europe and are being actively pursued

by the Company. The successful delivery of the Company’s largest

project to date in Europe in 2019 demonstrates the ability of the

Group to successfully deliver significant projects outside of the

United Kingdom.

Ian Lawson

Non Executive Chairman
20 April 2020

The Company remains alert and adaptable to the constantly

evolving industry, political, health and economic environment

and seeks to take measures, taking advice where appropriate, to

mitigate risks to the business as far as possible.

Current trading and outlook
The current environment is dominated by the global Covid-19

pandemic and I am pleased to report that all our facilities

currently remain operational in line with Government advice.

Whilst there has been an inevitable reduction in volumes of certain

products and services, we have taken measures to mitigate the

effect of these. Our priority is the health, safety and wellbeing of
our employees, suppliers and customers. We have taken a number

of actions, in line with government guidance, to facilitate this and

continue to monitor the situation to ensure we are employing best

practice.

Whilst the ultimate impact of the Covid-19 pandemic on industry,

the economy and Billington is uncertain, we have a robust

business, supported by a healthy balance sheet and committed

workforce. Billington remains well placed to deal with the

uncertain future ahead.

Aldi, Darlington

Operating Divisions
LO CAT I ONS

Billington Structures
Wombwell, Barnsley
Shafton, Barnsley
Yate, Bristol

Nationally recognised and awardwinning steelwork
contractor, with over 70 years’ experience. Plants in
Barnsley and Bristol with capability to process over
40,000 tonnes of steel per annum.

www.billington-structures.co.uk

Shafton Steel Services
Shafton, Barnsley

State-of-the-art steel processing
and profiling facility acquired in 2015.

www.shaftonsteel.co.uk

Tubecon
Wombwell, Barnsley
Yate, Bristol

Tubecon is a specialist in complex steel structures.
Operates primarily in the UK construction and rail
infrastructure markets.

www.tubecon.co.uk

hoard-it
Wombwell, Barnsley

hoard-it provides re-usable
and eco-friendly site hoarding
solutions.

www.hoard-it.co.uk

1. Gildersome, Leeds
2. Shafton, Barnsley
3. Wombwell, Barnsley
4. Tuxford, Nottinghamshire
5. Yate, Bristol

Peter Marshall Steel Stairs
Gildersome, Leeds

easi-edge
Tuxford, Nottinghamshire

Specialist company engaged in the
design, fabrication and installation
of highly engineered steelwork,
staircases and balustrade systems.

Leading provider of safety solutions to
the UK construction industry. Primarily
supplies perimeter edge protection
and fall prevention systems.

www.marshallstairs.com

www.easi-edge.co.uk

Five Year Summary

110

100

Revenue (£m)

9
.
4
0
1

Net Assets (£m)

3
.
7
7

5
.
3
7

3
.
3
6

8
.
6
5

2015

2016

2017

2018

2019

Profit Before Tax (PBT) (£m)

9
.
5

9
.
4

4
.
4

8
.
3

1
.
3

1
.
8
2

5
.
3
2

0
.
2
2

8
.
8
1

4
.
6
1

2015

2016

2017

2018

2019

Earnings Before Interest, Tax, Depreciation
and Amortisation (EBITDA) (£m)

8
.
7

5
.
6

1
.
6

1
.
5

2
.
4

2015

2016

2017

2018

2019

2015

2016

2017

2018

2019

Earnings per Share (EPS) (pence)

8
.
9
3

6
.
3
3

0
.
9
2

4
.
5
2

1
.
1
2

2015

2016

2017

2018

2019

400

350

300

250

200

150

100

Average Number of Employees

0
6
3

9
7
3

9
9
3

0
4
3

6
9
2

2015

2016

2017

2018

2019

Operational Review

2019 was another record year for Billington, reflecting
the number of large projects that have been undertaken,
resulting in revenues increasing by 36 per cent to £104.9
million and profit before tax increasing by 20.4 percent to
£5.9 million. This exceptional performance is a real credit to
the tireless dedication of our employees and I would like to
thank them all for their efforts.

All the businesses across the Group performed well and whilst
we expect a good performance to continue, we recognise that
due to the number of large contracts undertaken, 2019 was an
exceptional year.

Billington Structures and Shafton Steel Services
Billington Structures is one of the UK’s leading structural

steelwork contractors with a highly experienced workforce capable

of delivering projects from simple building frames to complex

structures in excess of 12,000 tonnes to all market sectors. With

facilities in Barnsley and Bristol and a heritage dating back over

80 years, the business is well recognised and respected in the

industry with the capacity of processing over 40,000 tonnes of steel

per annum.

The Shafton facility was acquired in 2015 and has been fully

integrated into Group operations. Alongside the successful

integration, two separate business areas have been developed on

the site. The first undertakes activities for Billington Structures
and has continued to enjoy a strong performance driven by high

production volumes. The second, Shafton Steel Services, offers

a complete range of steel profiling services to a large number

of diverse engineering and construction companies, providing

further opportunities to increase the capacity of the current

business units as well as allowing for the development of new,

value added, complementary products and services to enhance the

comprehensive offering of the Group.

During the year the business has traded very strongly, particularly

through the execution of the £41 million of contracts announced

in November 2018 and the further £30 million of large contracts

secured in June 2019.

The larger projects undertaken by Billington Structures during 2019

included:

•

Circle Square, Manchester

4 Wellington Place, Leeds

Large Data Centre development, Europe

Barnsley town centre redevelopment scheme – “The

Glassworks”

First Way, Wembley

Pinewood Studios, Buckinghamshire

Large Fulfilment Centre, North East of England

I am pleased that Billington Structures was again recognised for a

number of national awards being the public vote winner of the 2019

Tekla Awards for the Wellington Place development in Leeds and

receiving a commendation for the Ingenuity House development in

Birmingham at the 2019 Structural Steel Design Awards.

Billington Structures maintains a satisfactory order book, providing

a good degree of visibility for the remainder of the current year and

the focus is both on the successful completion of existing contracts

and the securing of new business for the remainder of 2020 and

beyond. A very good number of opportunities exist, although there

remains pricing pressure and uncertainty within the market. It is

possible that projects anticipated for construction during the latter

part of 2020 could be impacted by delays as developers and main

contractors seek a period of review and are able to complete current

projects under construction.

Wellington Place, Leeds

During the period Billington Structures
received a Tekla Award for multiple
plots at Wellington Place in Leeds.

Peter Marshall Steel Stairs
Based in Leeds, Peter Marshall Steel Stairs is a specialist

Under the new leadership introduced in 2018 the business

continues to grow. The momentum gained in 2018 continued in

designer, fabricator and installer of bespoke steel staircases,

2019, producing a record result.

balustrade systems and secondary steelwork. It has the capability

to deliver stair structures for the largest construction projects and

Notable projects in 2019 included:

operates in sectors spanning retail, commercial offices, education,

healthcare, rail and many more.

During the year the business delivered another good performance,

fulfilling a smaller number of larger contracts than has historically

been the case, for principal contractors, Billington and other

steelwork companies.

• Wembley Stadium

• Circle Square, Manchester

• Northgate House, Oxford

• Princes Quay Street, Hull, Liverpool

• Centenary Square, Birmingham, Liverpool

• Edinburgh Airport

Notable projects undertaken in 2019 included:

• 100 Liverpool Street, London

• Ada Lovelace School, London

• Bardon Hill, Leicestershire

• Pinewood Studios, Buckinghamshire

• Cobalt, Didcot

• Large data centre development, Europe

• Battersea development, London

easi-edge
easi-edge is a leading site safety solutions provider of perimeter

edge protection and fall prevention systems for hire within the

construction industry. Health and safety is at the core of the

business which operates in a legislation driven market.

In 2019 the business enjoyed its best ever year, carrying on

the momentum from 2017 and 2018. The investment in stock

available for hire continued, with a new improved barrier design

implemented. easi-edge enjoyed high utilisation rates reflecting

the market demand for their solutions, one of the higher margin

segments for the Group.

Projects undertaken by easi-edge on 2019 included:

• 4 Wellington Place, Leeds

• Large data centre development, Europe

• Circle Square, Manchester

• Ark Blake, London

• Blundell Street, Liverpool

• Merseyside Police, Liverpool

• Two New Bailey, Manchester

Significant progress continues to be made to establish the product

as the number one choice for main contractors, housebuilders

and developers in the construction industry. There has been

a particular focus on growing the business in the residential

construction market, where hoard-it’s range of printed boards

and panels are proving attractive to developers looking for a

professional site image.

Our People
Our workforce is at the heart and drive of everything we do, and

we continue to strive to make Billington the best employer. During

the year the Group increased its workforce by a further 5.3 per

cent to 399. They were able to deliver a 36 per cent increase in

turnover, reflecting the hard work undertaken, productivity gains

and improved utilisation of resources.

Attracting sufficient, experienced, quality people remains a

challenge across the industry. The Group therefore continues

its focus on developing its people and has a number of training

initiatives to assist in overcoming this issue. Billington maintains

close relationships with local education providers, supporting

both Barnsley College and the University of Sheffield Engineering

Department. The Company regularly attends educational career

days, hosts school visits to its sites and seeks to develop talent

from a young age with its range of internal training programmes

across all departments of the business.

Wage pressures continue to be an issue in the industry as

companies compete for talent in a limited pool. To help

mitigate against this Billington continues to actively promote its
apprenticeship and graduate schemes, which are particularly

focused on fabricator welders and technical staff. These

programmes are geared to help the business maintain the

necessary skills and expertise to meet both its current and future

requirements.

The business brought a strong forward order book into 2020.

Recently, as a result of Covid-19, the company has noted a number

Billington is an advocate, promotor and contributor to the British

of project delays which are anticipated to affect the hire utilisation

Constructional Steelwork Association’s CRAFT apprentice

of its products throughout the duration of the pandemic.

programme. The scheme has become the default path for the

hoard-it
hoard-it produces a unique range of re-usable temporary hoarding

Company to train, educate and progress structural steelwork

fabricators. The scheme ensures that the Company possesses

the necessary and appropriate skills to enable it to deliver for its

solutions which are environmentally sustainable and available

clients and be at the forefront of new processes and techniques,

on both a hire and sale basis tailored to the requirements of its

driving manufacturing efficiencies.

customers.

Health, Safety, Sustainability, Quality and the
Environment
Billington remains committed to health, safety, sustainability,

quality and the environment. Across the Group we continue to

be actively involved in a number of initiatives both locally and

The Company strives to develop positive relationships with

suppliers to ensure both parties understand each other’s problems

and requirements. It will not use current or potential contracts to

coerce suppliers into unsustainable offers.

nationwide. The Group aims to be proactive in the identification,

reporting and resolution of risks both on site and in our production

facilities to ensure that we are able mitigate the risks and promote

The Company treats its staff fairly in all aspects of their

employment, valuing their contribution to the achievement of

Company objectives and providing them with opportunities for

safe ways of working.

training and development.

The safety and welfare of our employees and subcontractors is of

paramount importance and is at the centre of all operations across

the Group. During 2019 the Health and Safety department was

further strengthened to ensure that continued progress can be

achieved in enhancing working practices and improving the safety

culture at all facilities and our on-site activities.

The Company is proud of its long standing and committed partner

relationships with its supply chain and in turn seeks to treat them

fairly with timely payment for works and the implementation of a

‘no retention’ policy.

Steel Industry
We have been closely monitoring developments at British Steel,

There were regrettably two lost time reportable accidents in the

particularly since it was placed in the hands of the Official Receiver

year. However, the Group continued to outperform the industry

in May 2019. We welcome the news that the sale of British Steel

average Accident Frequency Rate (AFR), relating to our employees,

to Chinese firm Jingye has now been completed and we welcome

at 0.22.

Charity
Billington continues to be a significant advocate and supporter

of both local and national charities. In 2017 we established the

Billington Charity Foundation in order to focus efforts. Billington

has actively supported many charity programs for social

innovation, the fight against cancer, education and aiding sports

facilities.

Throughout 2019 Billington donated to the likes of Brain Tumour

Research, Weston Park Cancer Charity, Macmillan, The Grand

Appeal and the Alzheimer’s Society. The Company has continued

its annual sponsorship of RSPB Old Moor and sponsored a good

number of other local sports clubs. Billington continued their

efforts through sponsoring the Barnsley College Student Awards

and University of Sheffield Engineering Department.

the stability that a concluded sale provides to the British steel

industry. Minimal disruption was noted throughout the year as the

operations were smoothly transitioned from Greybull to the Official

Receiver.

Anticipated investment upon the completion of the purchase by

Jingye is expected to be significant as they process a number of

furnace upgrades. These investments are not only expected to

safeguard the long-term viability of the company, they will also see

them improve their products within a competitive global market.

Throughout 2019, ongoing uncertainty about near-term business

conditions as well as fairly high UK steel stock levels at the end

of the first quarter of 2019 prompted a larger than expected stock

decrease in the second quarter. Throughout Q3 and Q4 2019 UK

steel stock and consumption levels continued to fall, although as

the market begins to stabilise; consumption levels are expected

to recover during 2020 which may have a consequential impact on

Billington actively supports a diverse range of charitable and social

price.

Coking Coal, Iron Ore and ‘scrap steel’, the key input costs for steel

manufacturing, also remained unpredictable throughout 2019,

leading to some fluctuations in price throughout the year for the

wide range of steel products that the Group sources from a variety

of steel producers worldwide. As stated previously, Billington

keeps its steel supply options under constant review and employs

a variety of measures to allow the Company to reduce its exposure

to unpredictability in steel prices and any variability in supply over

the short term.

causes its employees are involved with. The Group encourages

involvement in initiatives intended to improve the local areas in

which our people live.

Customers and Suppliers – Ethical Trading
The Company recognises the need to maintain a supply chain

that adheres to and is aligned with our environmental, social and

commercial objectives and policies.

Billington is committed to carrying out all dealings with clients,

suppliers, sub-contractors and its own staff in a fair, open

and honest manner. It is also committed to complying with all

legislative and regulatory requirements that are relevant to its

business activities.

The Company communicates fully and openly with customers

regarding costs of work undertaken and will provide accurate

and honest guidance and advice to customers to ensure their

requirements are met.

Prospects and Outlook
We are delighted with the results we have achieved in 2019, an

exceptional year for the Group. However, 2020 has been dominated

by the impact of the Covid-19 pandemic.

To date, Billington has been able to remain operational, with

the majority of construction sites open and customer projects

continuing after some temporary interruptions. The health, safety

and wellbeing of all our employees, suppliers and customers has

been our primary concern and we have undertaken a full review

of our operations and working practices, making changes and

implementing new procedures where appropriate, following the

latest government guidance on tackling Covid-19.

Whilst we remain operational the Covid-19 outbreak has inevitably

led to some reductions in volumes across the Group although

more prevalently in our easi-edge, hoard-it and Peter Marshall

Steel Stairs businesses. To minimise the impact on the Company

we have taken the decision to furlough a number of staff in these

businesses as well as within Billington Structures.

Securing additional suppliers of key outsourced components and

services has been a priority, to mitigate, as far as possible, any

impact from business interruptions and closures in our supply

chain. However, it remains uncertain whether we will remain

unhindered by any issues with our supply chain as the pandemic

reaches its peak and moves to resolution.

The Covid-19 pandemic will inevitably have an impact on our

industry and customers, and whilst the ultimate outcome is

uncertain, Billington is in a strong position to navigate the

difficulties ahead and remain a significant player in the structural

steel and safety solutions markets.

Mark Smith

Chief Executive Officer
20 April 2020

Audley Retirement Village, Surrey

Financial Review

Revenue

EBITDA

Profit before tax

Operating profit margin

£104.9m

£7.8m

£5.9m

5.7%

Operating cash inflow

Cash and cash equivalents

Earnings per share from
continuing operations

£8.5m

£17.9m

39.8p

Consolidated income statement

Revenue

Operating profit

Profit before tax

Profit after tax

Profit for shareholders

Operating profit margin

Return on capital employed

Earnings per share (basic)

2019

£’000

104,911

5,936

5,931

4,796

5.7%

49.1%

39.8p

2018

£’000

77,266

5,001

4,943

4,049

6.5%

35.2%

33.6p

Revenue increased 35.8 per cent year on year primarily as a

Earnings per share improved from 33.6 pence in 2018 to

result of Billington Structures increasing its output, particularly

39.8 pence in 2019 representing an increase in the result for

in relation to its traditional structural steelwork activities. The

shareholders of 18.5 per cent.

Group has seen revenue increase 133 per cent during the five year

period from 2014 to 2019 as a result of consistent investment,

Cash generation was strong during the year, leaving a gross

an improving market environment and, successful penetration

cash balance of £17,856,000 (2018: £9,311,000) at the year end.

into Central European markets. Revenues of £28,896,000 were

The average gross cash balance during the year was £10,688,000

generated from European markets in the year (2018: £784,000).

(2018: £10,011,000). The strong cash generation, following a

positive trading period leaves the Group with a robust cash position

Forecasts indicate that the consumption of structural steelwork

to enable it to achieve both its short and long term objectives,

within the UK marginally declined to 856,000 tonnes in 2019 from

while providing financial security in a cyclical industry.

877,000 tonnes in 2018. Projections indicate that consumption will

increase by 3.9 per cent to 889,000 tonnes in 2020 and a further 3.6

Staff numbers as at December have increased 5.3 per cent,

per cent to 920,000 tonnes in 2021, allowing the Group to continue

from the same period last year, to 399 as the Group continues to

to look forward with optimism in the medium term, although these

increase its activities across all divisions. The increase in turnover

forecasts may be revised as the impact of Covid-19 is assessed.

relative to the increase in employee numbers is an exceptional

achievement and represents a year of hard work across all

Operating margins reduced to 5.7 per cent in the year as a result

divisions of the Group. Industry wide challenges remain in

of a difficult trading environment towards the close of 2019 while

attracting sufficient quality resource across all disciplines.

approaching the UK general election and the UK’s exit from the

European Union. The operating margin achieved within the Safety

The Shafton facility provides the Group with opportunity to

Solutions entities, at 20.2%, was a fantastic result. Strong levels

expand and diversify its operations further optimising the current

of utilisation were noted for the majority of 2019, on an increased
level of hire stock, following continual investment in the hire fleets

resources within the control of the Group.

over recent years.

London School of Economics, London

Earnings per share improved from 33.6
pence in 2018 to 39.8 pence in 2019
representing an increase in the result
for shareholders of 18.5 per cent.

Financial Review Continued

Consolidated balance sheet

Non current assets

Current assets

Current liabilities

Non current liabilities

Total equity

2019

£’000

16,456

33,548

(21,724)

(187)

28,093

2018

£’000

15,711

28,849

(19,609)

(1,500)

23,451

Significant investments were made in the year relate to increasing

Retention balances, contained within trade and other receivables

and renewing the hire fleet at easi-edge and hoard-it, this

outstanding at the year end, were £3,364,000 (2018: £1,970,000). It

accounted for £1,064,000 of the additions in the period.

is anticipated that £3,110,000 will be received within one year and

£254,000 in greater than one year.

Within non-current assets, property, plant and equipment

increased by £209,000, represented by capital additions

The total rise of £2,115,000 in current liabilities principally

of £1,751,000, depreciation charges of £1,814,000 and net

comprised an increase in trade and other payables of £701,000 as

disposals of £10,000. During the year an adjustment relating

the businesses enjoyed increased activity levels during the year.

to the capitalisation of lease obligations in accordance with the

Furthermore, the mortgage relating to the purchase of the Shafton

provisions of IFRS 16 was made of £282,000.

facility in 2015 over a 10 year repayment period is due for renewal

The defined benefit pension scheme has performed well in the

is disclosed within current liabilities (2018: £250,000). A balance of

period against a backdrop of a turbulent equity market. At the year

£1,250,000 will be outstanding at the point of renewal.

end, a surplus of £2,205,000 along with a corresponding deferred

tax liability of £375,000 has resulted in a net recognised surplus of

Total equity increased by £4,642,000 in the year to £28,093,000.

£1,830,000. The scheme was closed to future accrual in 2011.

The financial position of the Group at the end of the year remains

after 5 years and therefore the outstanding balance of £1,500,000

robust and provides a platform from which the Group can further

The net deferred tax liability at the year end was £176,000 (2018:

increase shareholder value.

asset £39,000), being a deferred tax asset of £199,000 (2018:

£316,000) related to temporary timing differences net of a deferred

tax liability of £375,000 (2018: £277,000) related to the defined

benefit pension scheme surplus.

The increase of £4,699,000 in current assets included a decrease

of £3,669,000 in inventories, a decrease of £177,000 in trade

and other receivables, and an increase in the cash balance of

£8,545,000.

Consolidated cash flow statement

Result for shareholders

Depreciation

Capital expenditure

Tax paid

Tax per income statement

(Increase)/decrease in working capital

Dividends paid

Net property loan movement

Others

Net cash inflow

Cash at beginning of year

Cash at end of year

2019

£’000

4,796

1,814

(1,751)

(959)

1,135

5,378

2018

£’000

4,049

1,502

(1,962)

(843)

894

(882)

(1,565)

(1,385)

(250)

8,545

9,311

17,856

(250)

125

1,248

8,063

9,311

Dividends were paid in the year at a cash cost of £1,565,000

The Group remains committed to treating its suppliers and

(2018: £1,385,000), representing 13.0 (2017: 11.5) pence per

subcontractors fairly and to paying them in line with their agreed

share. The ability of the Group to convert profits into cash has

payment terms. It is the Group’s policy not to withhold retentions

been encouraging and provides the Group with cash balances

from members of its valued supply chain.

with which to increase working capital associated with increased

activity levels if required.

Working capital

Inventories and work in progress

Accounts receivable

Accounts payable

Working capital at end of year

2019

£’000

8,342

7,350

2018

£’000

12,011

7,527

(19,433)

(18,732)

(3,741)

806

Cash balances at the year end totalled £17,856,000 and there
were property and hire purchase loans outstanding of £1,500,000

The strong year end cash position allows the Group to further
invest in replacing and upgrading some of its capital assets.

representing a net cash position of £16,356,000 (2018: £7,561,000).

2020 will note a modest increase in capital additions, primarily

It is pleasing to note the strong cash position of the Group.

within the structural steel divisions of the Group. The additional

Consistent and positive trading performances, combined with

capital expenditure shall aid both an increase in the range of

effective working capital management has allowed the Group cash

services the Company can perform as well replacing a number

balance to increase year on year and provides the Group with the

of aged machines when it is prudent to do so. Investment in the

flexibility and ability to capitalise on opportunities as they present

latest technologies will ensure Billington can deliver the most

themselves.

challenging projects, efficiently, for its clients.

Financial Review Continued

Pension scheme

Scheme assets

Current assets

Surplus

Other finance income

Contributions to defined benefit scheme

2019

£’000

2018

£’000

8,552

(6,347)

2,205

(6)

–

7,797

(6,167)

1,630

(36)

–

To limit the Group’s exposure to future potential pension liabilities

the decision was taken to close the remaining Billington defined

Covid-19
As further detailed within the Report of the directors the company

benefit pension scheme to future accrual from 1 July 2011. The

has conducted comprehensive financial modelling for a range

schemes assets have performed well, in a difficult market during

of possible scenarios that may occur during the pandemic. The

the period leaving the scheme is a strong position as at the

company has completed analysis on various scenarios ranging

balance sheet date.

from minor disruption to cessation of all operations for a period

of up to six months. The Board is satisfied it has sufficient cash

The scheme’s triennial valuation for period ended 31 March 2017

resources to meet its obligations as they fall due throughout this

was completed 8 January 2018. The position of the scheme as at

duration.

the date of the valuation was an asset position of £8,207,000 and a

liability position of £6,944,000 resulting in a surplus of £1,263,000.

As a contingency measure the company has successfully secured

The next actuarial valuation is due to be completed as at 31 March

an additional overdraft facility of £3 million for a period of twelve

2020.

Employee Share Option Trust (ESOT)
The Group operates an ESOT to allow employees to share in the

months. Further to securing additional facilities the Group has

reviewed its capital and discretionary expenditure and will only

utilise its resources in these areas when it is prudent to do so.

future, continued success of the Group, promote productivity and

In March the UK Government announced a range of assistance

provide further incentives to recruit and retain employees.

measures for businesses. The Company will seek to utilise these

Options were issued based on seniority and length of service

across all parts of the Group.

schemes where it is eligible and beneficial to do so.

Notwithstanding these positive indications of the financial stability

of the Group, there is a risk that the impact of Covid-19 could

During the year a Long Term Incentive Plan (LTIP) was introduced

be more significant than can be currently anticipated and the

across the Group to assist in the remuneration of management

Directors have concluded that these circumstances represent a

and further align the interests of senior management and

material uncertainty which could cast significant doubt on the

shareholders. Awards are made subjective to achieving

Group’s ability to continue as a going concern.

progressive Group performance metrics over a three year period.

At the year end there were 424,705 share options outstanding at an

resources to enable it to continue to adopt the going concern basis

average exercise price of £1.54 per share (2018: 281,104 shares at

in preparing the financial statements. These financial statements

Nonetheless, the Directors expect that the Group has sufficient

£2.63 per share).

do not include any adjustment that would arise if the going

concern basis of preparation was not considered appropriate.

The charge included within the accounts in respect of issued

options is £97,000 (2018: £84,000).

It is encouraging to note that the position of the scheme as at
the year end continues to show signs of improvement.

Trevor Taylor

Chief Financial Officer
20 April 2020

Board Profile and Registered Office

Ian Michael Lawson
Non Executive Chairman

Appointed: 01/10/2018

Nationality: British

Mark Smith
Chief Executive Officer

Appointed: 01/01/2015

Nationality: British

Experience: Ian is a fellow of both The Royal Institute of Chartered
Surveyors (FRICS) and the Chartered Institute of Building (FCIOB)
and has a wide range of skills and experience from working
within the construction industry for more than 35 years. Ian’s
previous experience includes being a main Board Director of a
tier-1 Principal Contractor where he enjoyed a 13-year career
and subsequently spent four years as Chief Executive Officer for a
prominent Steelwork Contractor.

Experience: Joined Billington Holdings Plc as Chief Operating
Officer on 2 June 2014. Appointed as Chief Executive on the
retirement of Steve Fareham on 1 January 2015, who became a
Non Executive Director. An in depth knowledge of construction
industry for over 30 years driving for growth and profit in
competitive markets.

Trevor Michael Taylor
Chief Financial Officer

Appointed: 31/10/2011

Nationality: British

Experience: Trevor is a fellow of the Institute of Chartered
Accountants in England & Wales (ICAEW) and joined Billingtons in
2008 as Financial Controller from Allotts Chartered Accountants
where he specialised in Construction and Financial Services.

John Stuart Gordon
Non Executive Director

Appointed: 01/04/2007

Nationality: British

Experience: John practised as a barrister from 1989 until 1999
when he re-qualified as a solicitor and was a partner in national
firms for many years. John now provides legal and strategic advice
to individual businesses on a consultancy basis. He was appointed
to the board in 2007, and his legal-commercial background makes
him a valuable member of the team.

Alexander Ospelt
Non Executive Director

Appointed: 01/01/2013

Nationality: Liechtensteiner

Stephen John Wardell
Non Executive Director

Appointed: 14/01/2019

Nationality: British

Experience: Alexander Ospelt has been in independent practice
as a lawyer since 1997 and is Member of the Board of Directors
of Legacon Trust and Ospelt and Partner Attorneys at Law,
Liechtenstein. In addition, he is also a Board Member of a number
of other companies including Ospelt Holding Anstalt; Bergbahen
Malbun AG; Bank Havilland Ltd; Chairman of the Board of Seed X
Liechtenstein Ltd; and Chairman of the Board of ONE Insurance
Ltd. Alex was also appointed Honorary Consul of the Kingdom of
Belgium in 2017.

Experience: Stephen is a member of the Institute of Chartered
Accountants in England & Wales (ICAEW), having qualified in 1988.
He retired from KPMG in 2018 having been a partner for nearly 20
years, having held a number of management roles in the firm and
was most recently a Senior Audit Partner working with FTSE 100
and 250 boards in an audit, advisory and relationship management
capacity. Throughout his career, Stephen has specialised in the
construction and contracting sectors and was a member of the
ICAEW Construction Sector Working Group back in 2014.

Darren Paul Kemplay
Company Secretary

Appointed: 31/12/2017

Nationality: British

Experience: A qualified HR professional with over 29 years
experience across a range of industries. Joined the Group in
February 2001 and has provided support and cover for the Group
Secretarial function since 2016 and was formally appointed to
the role of Company Secretary at the end of 2017 following the
retirement of the previous post holder, Leslie Holloway.

Auditors

Registrar and Main Transfer Office

Grant Thornton UK LLP,
Registered Auditor, Chartered
Accountants, 2 Broadfield Court,
Sheffield, S8 0XF

Bankers

HSBC Bank Plc, 4th Floor, City
Point, 29 King Street, Leeds, LS1
2HL

Solicitors

Walker Morris LLP, Kings Court,
12 King Street, Leeds, LS1 2HL

Link Asset Services, Northern House,
Woodsome Park, Fenay Bridge,
Huddersfield, HD8 0GA

Nominated Advisor and Broker

W H Ireland, Royal House, 28 Sovereign
Street, Leeds, LS1 4BJ

Registered Office

Steel House, Barnsley Road, Wombwell,
Barnsley, South Yorkshire, S73 8DS

Registered in England.

Company Number: 02402219

Report of the Directors

The directors present their report together with the audited
financial statements for the year ended 31 December 2019.

1. Results and dividends

The consolidated income statement is set out on page 33 and

shows the result for the year.

Liquidity risk
The Group seeks to manage financial risk by ensuring sufficient

liquidity is available to meet foreseeable needs and by investing

A final dividend in respect of 2018 of 13.0 pence per share was paid

cash assets safely and profitably. Primarily this is achieved

on 5 July 2019. No interim dividends were paid in 2019. No final

through a Group treasury function which is charged with ensuring

dividend has been proposed in respect of 2019 as the dividend has

sufficient liquid funds are available to all companies as and when

been suspended to preserve cash resources.

they are required. Short term flexibility is achieved by overdraft

facilities.

2. Financial risk management

objectives and policies

The Group uses financial instruments, other than derivatives,

comprising borrowings, cash and various other items, such

as trade receivables and payables that arise directly from its

operations. The main purpose of these financial instruments is to

raise finance for the Group’s operations. The main risks arising

from the Group’s financial instruments are foreign currency risk,

interest rate risk, liquidity risk and credit risk. The directors review

and agree policies for managing each of these risks and they are

summarised below. The policies have remained unchanged from

previous periods.

Foreign currency risk
To mitigate the Group’s exposure to foreign currency risks non-

Sterling cash flows are monitored and forward exchange contracts

are entered into in accordance with the Group’s risk management

policies.

Interest rate risk
The Group finances its operations through a mixture of retained

profits and bank borrowings on an individual company basis. The

Group’s exposure to interest rate fluctuations on its borrowings is

managed on a Group basis through the use of floating facilities on

individual company accounts.

Billington Holdings Plc ordinary 10p shares

Ian Lawson

Mark Smith

Trevor Taylor

John Gordon

Alexander Ospelt

Stephen Wardell

Credit risk
The Group’s principal credit risk arises from trade receivables.

In order to manage credit risk the directors set credit limits

for customers based on payment history and third party credit

references. In addition, bad debt insurance is maintained to

reduce the risk to an acceptable level (see notes 12 & 17 to the

consolidated financial statements).

3. Directors

During the year Mr P.Hems retired following Mr I.Lawson taking

over the position of Non Executive Chairman in the prior year.

Furthermore, Mr S.Wardell was appointed as a Non Executive

director on 14 January 2019.

In accordance with the Articles of Association Dr A. Ospelt and Mr

J.S. Gordon retire and offer themselves for re-election.

The interests of the directors at the year end in shares of the

company were as follows:

31 December 2019

1 January 2019

No.

17,200

11,408

12,408

282,270

6,500

Options

No.

–

90,508

70,802

–

No.

–

5,000

6,000

307,270

6,500

–

Options

No.

–

41,853

40,382

–

4. Statement of directors’

responsibilities

5. Going concern

The directors are responsible for preparing the Strategic Report,

Annual Report and the financial statements in accordance with

applicable law and regulations.

Company law requires the directors to prepare financial

statements for each financial year. Under that law the directors

have prepared consolidated financial statements in accordance

with International Financial Reporting Standards (IFRSs) as

adopted by the European Union, and have elected to prepare

The consolidated financial statements have been prepared on

a going concern basis. The directors have taken note of the

guidance issued by the Financial Reporting Council on Going

Concern Assessments in determining that this is the appropriate

basis of preparation of the financial statements and have

considered a number of factors.

The financial position of the Group, its record trading performance

in 2019 and cash flows are detailed in the Financial Review and

they demonstrate the robust position of the Group heading into

parent company financial statements in accordance with United

2020.

Kingdom Generally Accepted Accounting Practice (United Kingdom

Accounting Standards and applicable laws), including FRS 102

“The Financial Reporting Standard applicable in the UK and

Republic of Ireland” .

Under company law the directors must not approve the financial

statements unless they are satisfied that they give a true and fair

view of the state of affairs and profit or loss of the Company and

the Group for that period. In preparing these financial statements

the directors are required to:

•

select suitable accounting policies and then apply them

consistently;

The Group has a gross cash balance of £17.9 million at 31

December 2019 and no significant long-term borrowings or

commitments. At the end of March 2020 the Group had a gross

cash balance of £13.0 million and during March 2020 the Group

have secured a 12 month overdraft facility of £3 million, giving the

Group available cash to utilise of £16.0 million.

The directors have prepared forecasts covering the period to April

2021 and approved by the Board in March 2020. The forecasts
reflect the exceptional nature of the 2019 trading performance

and the current political and economic uncertainty and pricing

pressures in the structural steel market, excluding the potential

• make judgements and accounting estimates that are

impact of Covid-19 which is considered below.

reasonable and prudent;

•

state whether applicable International Financial Reporting

Standards as adopted by the European Union/UK Accounting

Standards have been followed, subject to any material

departures disclosed and explained in the financial

statements; and

•

prepare the financial statements on the going concern basis

The uncertainty as to the future impact on the Group of the recent

Covid-19 outbreak has been separately considered as part of the

directors’ consideration of the going concern basis of preparation.

The directors put in a place many positive preventative measures

at an early stage in the outbreak in response to Covid-19 to

minimise the potential impact. Thus far, the measures have been

unless it is inappropriate to presume that the company will

effective.

continue in business.

The directors are responsible for keeping adequate accounting

records that are sufficient to show and explain the Company’s

transactions and disclose with reasonable accuracy at any time

the financial position of the Company and the Group and enable

them to ensure that the financial statements comply with the

Companies Act 2006. They are also responsible for safeguarding

the assets of the Group and the parent company and hence for

taking reasonable steps for the prevention and detection of fraud

and other irregularities.

The directors confirm that:

•

so far as each director is aware, there is no relevant audit

In the downside scenario analysis performed, the directors have

considered the reasonably plausible impact of the Covid-19

outbreak on the Group’s trading and cash flow forecasts. In

preparing this analysis, a number of scenarios were modelled

ranging from a 30% drop in revenue by June 2020 followed by

a gradual recovery from September through to December, to

a total country-wide lockdown and subsequent closure of all

sites for up to six months. In each scenario, mitigating actions

within the control of management, including reductions in areas
of discretionary spend, have been modelled, but no fixed cost

reductions have been assumed. It is difficult to predict the overall

outcome and impact of Covid-19 at this stage and the duration of

disruption could conceivably be longer than anticipated. However,

even under the scenario of the closure of all sites for a significant

information of which the company’s auditor is unaware and;

period, the company has sufficient liquidity and resources to

•

the directors have taken all steps that they ought to have

taken as directors in order to make themselves aware of any

continue to meet liabilities as they fall due, without any additional

funding from either financial institutions or the government, which

relevant audit information and to establish that the auditor is

is considered separately below.

aware of that information.

The directors are responsible for the maintenance and integrity of

the corporate and financial information included on the company’s

website. Legislation in the United Kingdom governing the

preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.

The UK Government has announced a number of funding

initiatives throughout March 2020 to support businesses. The

main scheme that the Group is eligible for is the Coronavirus

Job Retention Scheme. The Scheme grants support from HMRC

to cover up to 80% of salary costs of anyone not working due to

Coronavirus but whose job has been retained, up to a maximum

of £2,500 per month for an initial period up to 31 May 2020, but it

will be extended if necessary. If there was a significant reduction

in operations or if any or all of the sites were required to close, the

scheme would provide a significant amount of support and short-

term cost reduction without impacting the long-term strategy of

the Group.

Notwithstanding these positive indications of the financial stability

of the Group, there is a risk that the impact of Covid-19 could

be more significant than can be currently anticipated and the

Directors have concluded that these circumstances represent a

material uncertainty which could cast significant doubt on the

Group’s ability to continue as a going concern.

Nonetheless, the Directors expect that the Group has sufficient

resources to enable it to continue to adopt the going concern basis

in preparing the financial statements. These financial statements

do not include any adjustment that would arise if the going

concern basis of preparation was not considered appropriate.

6. Stakeholder engagement

Billington’s stakeholders are an integral part of the business,

they consist of: customers, suppliers, employees, shareholders,

advisors and the local communities within which the Group

operates.

Details of how the directors have engaged with these stakeholders

are included within the Governance Report.

7. Auditor

Grant Thornton UK LLP have expressed their willingness to

continue in office. In accordance with Section 489 (4) of the

Companies Act 2006 a resolution to reappoint Grant Thornton UK

LLP will be proposed at the Annual General Meeting.

This report was approved by the Board and signed
on its behalf.

Darren Kemplay

Company Secretary
Billington Holdings Plc
Company Number – 02402219
20 April 2020

Shepherdess Walk, London

Strategic Report for the year ended
31 December 2019

The directors present their report together with the audited
financial statements for the year ended 31 December 2019.

1. Business review

The business model of the Group is to operate as a designer,

On a Group basis the business review and future prospects for

manufacturer and installer of structural steelwork through its

the business are contained within the Operational Review and

subsidiaries Billington Structures Limited and Peter Marshall

Financial Review (see pages 5 to 15), including an analysis using

Steel Stairs Limited, and as a supplier of safety solutions and

key financial and non-financial performance indicators.

barrier systems to the construction industry, through its subsidiary

easi-edge Limited as well as providing site hoarding systems

through hoard-it Limited. The parent Company acts as a holding

company providing management services to its subsidiaries.

2. Key non-financial performance indicators

Production efficiency

Hire stock utilisation

Accidents (own employees) – reportable

Employee numbers

Apprentice intake

Staff turnover (excluding restructuring)

2019

114%

87%

399

12%

2018

110%

90%

379

14%

Paradise Circus, Birmingham

3. Principal risks and uncertainties

Contract risk
The principal risk for each of the subsidiaries is contract risk,

either agreeing inappropriate contract terms at the beginning of

the contract process or failing to deliver contractual obligations.

In order to mitigate these risks, significant senior management

effort is invested in the agreement of contractual terms and the

monitoring of performance against budget.

Health and safety
Health and safety within the Billington Group is of paramount

importance. The protection of both our employees and those

who may be affected by our business remains a key concern and

priority. The ethos throughout the Group is to ensure the welfare

of all employees is at the forefront of every decision and not only to

meet legal requirements but to go far beyond.

Economic environment
The economic environment in which the Group trades continues

to be challenging with both macro and micro economic pressures.

These risks are largely outside of the control of the Group,

however the directors monitor the economic environment closely

and this informs decision making within the Group.

Credit risk
Current economic conditions have impacted on the Group’s ability

to maintain full credit protection on all customers. This will

remain an important issue for the foreseeable future that will be

constantly monitored to ensure the Group is not exposed to an

unacceptable level of risk.

Failure to manage the above principal risks, as far as the Group

is able, could lead to significant impact to profitability and to the

reputation of the Group.

Foreign currency
Foreign currency cash flows present the Group with uncertainty

relating to the timing and quantum of cash flow receipts. Where

contract receipts are denominated in a foreign currency the risk

associated with conversion into Sterling are mitigated through the
utilisation of appropriate, effective hedging instruments.

Brexit
2019 saw a great amount of economic and political uncertainty

as a result of the continuation of efforts in attempting to agree a

‘deal’ with the European Union (EU). Whilst performing activities

within the EU throughout 2019 uncertainties as to the timing and

implications of leaving the EU presented a number of challenges

to the Company. Periodic reviews into the Company’s overseas

commercial operations as well as the sourcing of input materials

were, and, continue to be conducted until the outcome of

negotiations is concluded.

Uncertainty throughout 2019 and into 2020 and their associated

impact on the UK economy and in particular the construction

industry is being closely monitored and regularly reviewed.

Covid-19
The worldwide outbreak of Covid-19 in early 2020 has created

significant uncertainty throughout the globe. It has had a

significant impact upon the UK and it is difficult to predict the

overall outcome and impact of Covid-19. The directors are closely

monitoring and reviewing the latest situation on a daily basis and

are taking all necessary steps and actions to reduce the risk and

impact on the Group.

4. Section 172 (1) statement

The directors of the Company consider that they have acted in the

way they consider, in good faith, would be most likely to promote

the success of the Company for the benefit of its members as a

whole, having regard to Section 172 (a)-(f) of the Companies Act

2006.

5. Disabled persons

The Group’s policy is to give sympathetic consideration, in both

recruitment and training, to the problems of the disabled, and to

assist them in developing their knowledge and skills to undertake

greater responsibilities wherever possible.

6. Employee involvement

It is Group policy to disseminate relevant information about Group

affairs amongst employees. The Group operates an Employee

Share Ownership Plan (see note 10).

This report was approved by the Board and signed
on its behalf.

Darren Kemplay

Company Secretary
Billington Holdings Plc
Company Number – 02402219
20 April 2020

The directors have a reasonable
expectation that the parent company and
the Group have adequate resources to
continue in operational existence for the
foreseeable future.

Sustainable and Responsible Business

Billington believes that operating in a sustainable and responsible manner is key
to the growth and success of the Group. The Company has a number of policies in
place that underpin its day-to-day operations, ensuring the safeguarding of both
the environment and its stakeholders. This highlights Billington’s fundamental
commitment to delivering responsible business growth and development.

Health and Safety

Overview
Billington operates within an industry whereby if risks are not

programme of sustainability objectives is reviewed annually as a

appropriately identified, monitored and mitigated could present

means of demonstrating continuous improvement.

risks to its employees and wider stakeholders. The Chief Executive

Officer is ultimately responsible for the implementation and

enforcement of the Company’s policies and procedures.

To ensure the successful implementation of the Company’s

environmental policies, Billington educates and informs its

The Health and Safety risks are mitigated through the constant

employees of the environmental impact of their work activities,
and encourages staff to seek methods to reduce these impacts. It

review of the Company’s procedures by an appropriately resourced

also provides employees with the necessary resources to deliver

and trained Health and Safety department who operate on a Group

the Company’s environmental objectives.

level and are able to cross pollinate good practices across all

Group entities. The Group Health and Safety manager acts as Vice

Additionally, the Group works in partnership with sub-contractors

Chairman for the British Constructional Steelwork Associations

to identify and develop procedures to reduce the environmental

(BCSA) Health and Safety Committee to enable the company to

impact of its onsite project work to a practicable minimum and

maintain and improve its knowledge of industry observations,

ensure optimum efficiency of onsite operations.

trends and best practice.

The Company adheres to BS EN ISO 45001 and is audited annually

reviewing these policies to ensure the programme is adapted and

through the Steel Construction Certification Scheme (SCCS) to

improved. This will ultimately save the Company money, improve

ensure compliance.

brand reputation and reduce Billington’s environmental footprint.

The Board is responsible for continuously monitoring and

The Heath and Safety of the Groups employees, subcontractors

and its wider stakeholders is of paramount importance and is at

the heart of every decision when considering activities that could

have an impact on individuals.

Environment

Social

Overview
Billington’s stakeholders are an integral part of the business,

they consist of: customers, suppliers, employees, shareholders,

advisors and the local communities within which the Group

operates.

Overview
Due to the industry in which Billington operates, the Company

recognises that its business activities can impact the wider

Employees
Employee engagement, development and satisfaction is key

environment, and therefore, has an obligation to reduce the

to building a successful business. Billington invests in the

direct negative impact of these activities. In order to manage the

development of its staff, adopting a number of policies aimed at

environmental risk, the Company has adopted policies that comply

recruiting and rewarding employees, including operating effective

with the ISO BS EN 14001 - Environmental Management System.

training and award-winning apprenticeship schemes.

The policies implemented by Billington manage the Company’s

Billington keeps an open line of communication with employees

environmental impact by reducing pollution, improving energy

through regular briefings and the production of company literature

efficiency and reusing and recycling waste (where possible), in

including a bi-annual newsletter. Board members frequently

order to achieve its long-term environmental goals.

attend management briefings with Group companies to ensure

active engagement at all levels.

The Company also maintains the Gold Standard awarded by the

British Constructional Steel Association (“BCSA”) for meeting the

The Company implements an Employee Share Option Trust (ESOT)

requirements of the Steel Construction Sustainability Charter. The

to allow employees to share in the future and continued success of
the Group.

Employee health and welfare is of utmost importance and a

and Risk Committee continues to review these procedures and

range of schemes and initiatives have been implemented and

their effectiveness in order to positively enhance the working

communicated to employees to assist in the promotion of an active

environment.

and healthy lifestyle. Mental health and the recognition of a need

to ensure employees are adequately supported has resulted in a

range of initiatives being implemented during the year to further

Health and Safety
Health and safety issues are monitored and reviewed on a monthly

promote employee welfare. The Company was recognised for its

basis by senior management and the Board.

promotion of employee welfare in the “Be Well at Work” awards in

the local region.

The Group has a well-developed management system for the

internal and external control of health and safety which is

These policies help to foster employee communication and

managed by the Group Health & Safety Manager. This includes the

development, and help to deliver long-term Company growth.

use of risk management systems for the identification, mitigation

Customer and Suppliers – Ethical Trading
The Company recognises the need to maintain a supply chain

Billington’s onsite teams have received numerous awards and

that adheres to and is aligned with our environmental, social and

recognition for their dedication to health and safety practices and

commercial objectives and policies.

the Company aims to continue this success.

and reporting of health and safety management information.

Billington is committed to carrying out all dealings with clients,

suppliers, sub-contractors and its own staff in a fair, open

Charity
The Company is actively involved in supporting local and national

and honest manner. It is also committed to complying with all

charities, and has established the Billington Holdings Charity

legislative and regulatory requirements that are relevant to its

Foundation through which it directs all charitable donations. It

business activities.

The Company communicates fully and openly with customers

regarding costs of work undertaken and will provide accurate

and honest guidance and advice to customers to ensure their

requirements are met.

The Company strives to develop positive relationships with

hosts charitable events for employees and donates funds to its

local communities, sports teams and other worthwhile causes.

Training
Billington recognises the importance of training and development

in maintaining and growing the success of the business, especially

considering the skills shortage within the industry.

suppliers to ensure both parties understand each other’s problems

and requirements. It will not use current or potential contracts to

The Group has a long history of providing apprenticeship

programmes throughout the business, and these form a key

coerce suppliers into unsustainable offers.

The Company treats its staff fairly in all aspects of their

employment, valuing their contribution to the achievement of

Company objectives and providing them with opportunities for

training and development.

element of the overall recruitment and development strategy for

Billington. As part of this strategy, the Company was instrumental

in developing the BCSA CRAFT Certificate that covers training for a

range of steelwork operations.

The Group also supports local colleges and universities, providing

young people with knowledge of, and giving them an insight into,

The Company is proud of its long standing and committed partner

the industry.

relationships with its supply chain and in turn seeks to treat them

fairly with timely payment for works and the implementation of a

‘no retention’ policy.

Equal opportunities
Billington is an equal opportunity employer, it adheres to the

Equality Act 2010, and believes that all individuals should be

treated fairly and equally. The Group strives to create a supportive

and welcoming environment where diversity is valued and

employees have the ability to progress and prosper without

prejudice or discrimination.

Whistleblowing
The Group is committed to the highest standards of openness,

honesty and accountability, and has a strong whistleblowing

policy in place that allows all employees to confidently raise any
concerns they have internally, without fear of reprisal. The Audit

Additionally, the Company provides various training opportunities

to existing employees, enabling them to grow, develop and reach

their full potential.

Modern Slavery
Modern slavery is a growing concern in the UK and, therefore,

Billington considers its responsibilities regarding this with the

upmost importance. It complies with the Modern Slavery Act 2015

and recognises its duties in relation to the Company’s employees

and supply chain. The Group implements a number of processes

and procedures within the business and reviews these practices on

an ongoing basis.

Sustainable and Responsible Business Continued

Governance

Ethical principles

Overview
Good corporate governance is one of the Company’s core values

Overview
The Group values its reputation for ethical behaviour and has a set

and, as an AIM listed entity, it is something that the Group takes

of values that are at the core of its business philosophy.

very seriously, ensuring that the Board implements the Quoted

Companies Alliance Corporate Governance Code for Small

To conduct business ethically, maintaining the Company’s

and Mid-Sized Quoted Companies throughout the Company’s

integrity

operations.

Bribery and corruption policy
Billington has a strict, zero tolerance Bribery and Corruption

The Company will communicate fully and openly in its dealings

with employees, clients, suppliers and the community, ensuring

Billington meets its obligations to the best of its ability. The

Policy, which complies with the Bribery Act 2010, to ensure the

Group will conduct its business operations in an honest, fair and

integrity and transparency of the Group is maintained. All Group

transparent manner. The Company will strive to meet the highest

employees are informed of the Company’s Bribery and Corruption

industry standards across all Group companies and ensure

Policy and the Board is responsible for ensuring that all sectors of

all employees are in the position to successfully deliver these

the business comply with these obligations.

requirements.

Appropriate internal and external training is given to employees

To value the welfare of its employees and ensure they have a

who may be exposed to situations whereby bribery, corruption and

safe, healthy and productive working environment

collusion could occur to ensure they are able to identify, act and

report instances as they arise.

Billington values its employees and understands they are key to

delivering the sustained growth and development of the Company.

The Group ensures every employee has the opportunity to fulfil

their potential in a supportive and inclusive environment.

To be regarded as a good neighbour and operate in a sustainable

manner

The Group is highly regarded in the industry and aims to maintain

this positive reputation. It engages openly and effectively with

stakeholders and communities, and adopts the highest standards

of environmental and suitability guidelines to minimise its impact

within the areas it operates.

Supporting CALM Charity

Governance Report

The Board is authorised to manage the business of the Company

on behalf of the shareholders and in accordance with the

Communication with shareholders
The Company encourages two-way communication with both its

Company’s Articles of Association. This is achieved by delegating

institutional and private investors and attempts to respond quickly

responsibilities to the Board Committees and designating

to all queries received verbally or in writing.

authority to manage the business to the Chief Executive Officer.

The Board is responsible for overseeing the management of the

communication with institutional shareholders and with analysts

business and for ensuring high standards of corporate governance

covering the Group’s activities, its performance and strategy.

are maintained throughout the Group. The Board is currently

comprised of two Executive Directors, three Non Executive

The Executive Directors formally meet with institutional

The Executive Directors undertake a programme of regular

Directors and a Non Executive Chairman.

shareholders at least twice a year, after the half year and full

year results are released. In addition, site visit’s for current and

The Board is accountable for the long-term success of the Group.

prospective shareholders are conducted throughout the year when

The Directors meet on a regular basis and the Executive Directors

requested to allow the operations and capabilities of the Group to

are in continual discussion with the operational management to

demonstrated and observed.

ensure that the business objectives of the Group are achieved.

Non Executive Directors have a particular responsibility to ensure

The Board has sought to use the AGM to communicate with private

that the strategies proposed by the Executive Directors are fully

investors and encourages their participation. The notice of the

challenged and supported.

To enable the Board to fulfil its duties, all Directors receive

appropriate information and are allowed sufficient time to

discharge their responsibilities effectively. Briefing papers

are distributed by the Company Secretary in advance of Board

Meetings and the members of the Group Board attend the

monthly meetings of subsidiary companies. The Company’s Non

AGM, detailing all proposed resolutions, is notified to shareholders
at least 20 working days before the meeting.

Culture and ethics
Billington is committed to carrying out all dealings with clients,

suppliers, sub-contractors and employees in a fair, open and

honest manner. It is also committed to complying with all

legislative and regulatory requirements that impinge on its

Executive Directors are considered by the Board to be independent

business activities.

of the management, and bring a breadth of experience which is

welcomed by the Executive Directors.

Dealing code
The Company follows the guidelines and procedures outlined

in the Quoted Companies Alliance Code for Directors’ Dealings,

as applicable to AIM companies, and all Directors and relevant

employees comply with this.

The Board provides strong leadership and ensures that the

Company’s ethical values are delivered through the business

by regularly engaging with Directors and members of senior

management, and consistently reviewing and updating policies.

Blundell Street, Liverpool

How Billington is governed

Each Board member has a direct responsibility to Billington, its employees and
its investors, and aims to ensure the success of the Group.

Board

Each Board member has a direct responsibility to

Billington, its employees and its investors, and aims to

ensure the success of the Group.

The Board comprises a Non Executive Chairman, two

Executive Directors and three Non Executive Directors.

The Board members have different backgrounds

and bring a varied range of skills and experience

to the Company. Between them, members have in

depth knowledge of engineering, operations, finance,

investment and Billington itself, ensuring there is strong

balance of expertise at Board level.

Board meeting attendance

Mark Smith – 11/11

Trevor Taylor – 11/11

John Gordon – 11/11

Alexander Ospelt – 7/11

Ian Lawson – 10/11

Stephen Wardell – 11/11
(appointed 14 January 2019)

Audit Committee
Chaired by Stephen Wardell

Remuneration Committee
Chaired by Ian Lawson

The Audit Committee comprises the Non Executive
Directors and meets no less than twice each year.

It is normal practice to invite the Chief Financial
Officer and the Chief Executive Officer to attend those
meetings when considered appropriate.

The Audit Committee is responsible for the financial
reporting of the Company and the Group, as well as
detailed findings arising from external audit reviews.

The Committee reports to the Board on the Group’s
full and half year results, having examined the
accounting policies on which they are based and
ensured compliance with relevant accounting
standards. In addition, it reviews the scope of the
external audit, the effectiveness, independence
and objectivity of the auditors, taking into account
relevant regulatory and professional requirements.

The Remuneration Committee comprises the
Non Executive Directors and meets bi-annually,
plus additional meetings when required. Its
primary responsibility is to review salary levels,
discretionary variable remuneration and the terms
and conditions of service of the Executive Directors
and other members of senior management where
their financial remuneration package is above
predetermined fiscal limits. The Remuneration
Committee also reviews the compensation decisions
made in respect of all other senior executives.

The Committee is also responsible for reviewing and
determining, along with the Executive Directors, the
overall Remuneration Policy applied to the Group
and its subsidiaries. This includes the quantum of
variable remuneration and the method of delivery,
taking into account relevant regulatory and corporate
governance developments.

The Remuneration Committee is authorised to seek
any information it requires in order to perform its
duties and obtain external legal or other professional
advice that it considers necessary from time to time.

Independent Auditor’s Report

Independent Auditor’s Report to the members of Billington
Holdings Plc.

Opinion

Our opinion on the financial statements is unmodified
We have audited the financial statements of Billington Holdings

Plc (the ‘parent company’) and its subsidiaries (the ‘group’) for the

The impact of uncertainties arising from the UK exiting
the European Union on our audit
Our audit of the financial statements requires us to obtain an

year ended 31 December 2019, which comprise the consolidated

understanding of all relevant uncertainties, including those arising

income statement, the consolidated statement of comprehensive

as a consequence of the effects of Brexit. All audits assess and

income, the consolidated balance sheet, the consolidated

challenge the reasonableness of estimates made by the directors

statement of changes in equity, the consolidated cash flow

and the related disclosures and the appropriateness of the going

statement, the parent company statement of financial position,

concern basis of preparation of the financial statements. All of

the parent company statement of changes in equity, and notes

these depend on assessments of the future economic environment

to the financial statements, including a summary of significant

and the group’s future prospects and performance.

accounting policies. The financial reporting framework that has
been applied in the preparation of the group financial statements

Brexit is one of the most significant economic events for the

is applicable law and International Financial Reporting Standards

UK, and at the date of this report its effects are subject to

(IFRSs) as adopted by the European Union. The financial reporting

unprecedented levels of uncertainty, with the full range of possible

framework that has been applied in the preparation of the parent

outcomes and their impacts unknown. We applied a standardised

company financial statements is applicable law and United

firm-wide approach in response to these uncertainties when

Kingdom Accounting Standards, including Financial Reporting

assessing the group’s future prospects and performance.

Standard 102 ‘The Financial Reporting Standard applicable in the

However, no audit should be expected to predict the unknowable

UK and Republic of Ireland’ (United Kingdom Generally Accepted

factors or all possible future implications for a group associated

Accounting Practice).

with a course of action such as Brexit.

In our opinion:
•

the financial statements give a true and fair view of the state

Material uncertainty related to going concern
We draw attention to the disclosure on page 39 of the financial

of the group’s and of the parent company’s affairs as at 31

statements, which details the factors that the directors have

December 2019 and of the group’s profit for the year then

considered in making their going concern assessment. The

ended;

uncertainty as to the future impact of the recent Covid-19 outbreak

•

the group financial statements have been properly prepared

has been included as part of the directors’ consideration, and they

in accordance with IFRSs as adopted by the European Union;

have considered the reasonably plausible impact of the outbreak

•

the parent company financial statements have been properly

on the group’s trading and cash flow forecasts.

prepared in accordance with United Kingdom Generally

Accepted Accounting Practice; and

While the directors consider the group to be a going concern, the

•

the financial statements have been prepared in accordance

uncertainty around the magnitude of the impact of the outbreak

with the requirements of the Companies Act 2006.

Basis for opinion
We conducted our audit in accordance with International

Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our

responsibilities under those standards are further described in the

‘Auditor’s responsibilities for the audit of the financial statements’

section of our report. We are independent of the group and the

indicates the existence of a material uncertainty which may cast
significant doubt about the group’s ability to continue as a going

concern. The financial statements do not include the adjustments

that would result if the company was unable to continue as a going

concern. Our opinion is not modified in respect of this matter.

Overview of our audit approach

parent company in accordance with the ethical requirements

•

Overall materiality: £301,000, which represents 5% of the

that are relevant to our audit of the financial statements in the

group’s profit before taxation;

UK, including the FRC’s Ethical Standard as applied to listed

•

Key audit matters were identified as revenue and profit

entities, and we have fulfilled our other ethical responsibilities in

recognition in relation to construction contracts; and

accordance with these requirements. We believe that the audit

• We have performed full scope audit procedures on the

evidence we have obtained is sufficient and appropriate to provide

financial statements of Billington Holdings Plc and on the

a basis for our opinion.

financial information of all non-dormant subsidiaries.

Key audit matters
Key audit matters are those matters that, in our professional

audit of the financial statements as a whole, and in forming our

judgement, were of most significance in our audit of the financial

opinion thereon, and we do not provide a separate opinion on

statements of the current period and include the most significant

these matters. In addition to the matter described in the material

assessed risks of material misstatement (whether or not due to

uncertainty related to going concern section, we have determined

fraud) that we identified. These matters included those that had

the matters described below to be the key audit matters to be

the greatest effect on: the overall audit strategy; the allocation of

communicated in our report.

resources in the audit; and directing the efforts of the engagement

team. These matters were addressed in the context of our

Key Audit Matter – Group

How the matter was addressed in the audit – Group

Revenue and profit recognition in
relation to construction contracts

Under International Standard on Auditing
(ISA 240) ‘The Auditor’s Responsibilities
Relating to Fraud in an Audit of Financial
Statements’, there is a rebuttable presumed
risk that revenue may be misstated due to
the improper recognition of revenue.

In respect of contractual arrangements with
customers there is a risk that revenue is
misstated as each contract’s outcome and
stage of completion requires management
judgement.

There is a risk that the profit recognised in
the year may not be appropriate. Profit is
recognised on contracts when a particular
percentage of the revenue associated with
a contract has been received. Management
review all contracts at specific stages
of completion at the year end to identify
whether any additional profit could be
reliably estimated and recognised.

In addition, management review all
contracts at the year end to identify loss
making contracts, for which the full loss is
recognised as soon as it is foreseen. The
assessment of the outcome of the contract
and the calculation of the amount of any
loss requires management judgement.

We therefore identified revenue and profit
recognition as a significant risk, which was
one of the most significant assessed risks of
material misstatement.

Our audit work included, but was not restricted to:

•

Assessing whether the revenue and profit recognition accounting policies
are in accordance with International Financial Reporting Standard (IFRS)
15 ‘Revenue from Contracts with Customers’;
Selecting a sample of contracts and assessing whether revenue has been
recognised in accordance with the group’s accounting policies;
Selecting a sample of contracts and agreeing to original signed
documentation, contract variations and valuation certificates prepared by
either the group’s internal quantity surveyors or those appointed by the
customer and agreed with the group’s internal quantity surveyors;
Identifying contracts at specific stages of completion to assess
whether profit could be reliably estimated and whether profit has been
appropriately recognised;
Identifying contracts where losses could be expected to be incurred to
assess whether any loss has been appropriately recognised;
Assessing the ability of management to predict the outcome of ongoing
projects by comparing the expected outcome of a sample of projects that
were ongoing at the prior year end to the final position on the contract, or
updated expectation if the project was incomplete;
Challenging management regarding their assumptions in assessing the
progress and expected outcome of a sample of projects; and
Agreeing a sample of revenue transactions to application for payments
and valuation certificates.

The group’s accounting policy on revenue and profit recognition, including the
key sources of estimation uncertainty, are shown in the Principal accounting

policies section and related disclosures are included in note 2.

Key observations
Based on our audit work, we did not identify any material misstatement in
revenue and profit recognition. Revenue was recognised in accordance with
the group’s accounting policy and IFRS 15 ‘Revenue from Contracts with
Customers.’

Our application of materiality
We define materiality as the magnitude of misstatement in the
financial statements that makes it probable that the economic
decisions of a reasonably knowledgeable person would be

changed or influenced. We use materiality in determining the
nature, timing and extent of our audit work and in evaluating
the results of that work.

Independent Auditor’s Report Continued

Materiality was determined as follows:

Materiality measure

Group

Parent

Financial statements as a
whole

Performance materiality
used to drive the extent of
our testing

Specific materiality

£301,000 which is 5% of profit before
taxation. This benchmark is considered
the most appropriate because profit
before tax is a key performance indicator
for the group.

Materiality for the current year is higher
than the level that we determined for the
year ended 31 December 2018 to reflect
the year on year increase in profit before
tax.

£141,000 which represents 0.5% of the
company’s total assets. This benchmark
is considered the most appropriate given
the activities of the parent company,
primarily being that of a holding
company and its major activities relate
to fixed assets included in the financial
statements.

Materiality for the current year is higher
than the level that we determined for the
year ended 31 December 2018 to reflect
the year on year increase in total assets.

75% of financial statement materiality.

We determined a lower level of specific
materiality for certain areas such as
directors’ remuneration and related party
transactions.

Communication of
misstatements to the audit
committee

£15,100 and misstatements below that
threshold that, in our view, warrant
reporting on qualitative grounds.

£7,100 and misstatements below that
threshold that, in our view, warrant
reporting on qualitative grounds.

Overview of the scope of our audit

Our audit approach was a risk-based approach founded on a

•

we performed a full-scope audit of the financial statements

thorough understanding of the group’s business, its environment

of the parent company, and of the financial information of

and risk profile and in particular included:

the subsidiary undertakings representing all of the group’s

operations. The operations that were subject to full-scope

•

documentation of the processes and controls covering all of

audit procedures made up 100 per cent of consolidated

the significant risks;

revenues and 100 per cent of total profit before tax. This

•

evaluation by the group audit team of identified components
to assess the significance of that component and to

approach was consistent with the prior year. In the light of the
knowledge and understanding of the group and the parent

determine the planned audit response based on a measure of

company and its environment obtained in the course of the

materiality;

audit, we have not identified material misstatements in the

strategic report or the directors’ report.

Other information

The directors are responsible for the other information. The other

information comprises the information included in the annual

Responsibilities of directors for the financial statements
As explained more fully in the directors’ responsibilities

report, other than the financial statements and our auditor’s report

statement set out on page 18, the directors are responsible for

thereon. Our opinion on the financial statements does not cover

the preparation of the financial statements and for being satisfied

the other information and, except to the extent otherwise explicitly

that they give a true and fair view, and for such internal control as

stated in our report, we do not express any form of assurance

the directors determine is necessary to enable the preparation of

conclusion thereon.

financial statements that are free from material misstatement,

whether due to fraud or error.

In connection with our audit of the financial statements, our

responsibility is to read the other information and, in doing so,

In preparing the financial statements, the directors are

consider whether the other information is materially inconsistent

responsible for assessing the group’s and the parent company’s

with the financial statements or our knowledge obtained in

ability to continue as a going concern, disclosing, as applicable,

the audit or otherwise appears to be materially misstated. If

matters related to going concern and using the going concern

we identify such material inconsistencies or apparent material

basis of accounting unless the directors either intend to liquidate

misstatements, we are required to determine whether there

the group or the parent company or to cease operations, or have

is a material misstatement in the financial statements or a

no realistic alternative but to do so.

material misstatement of the other information. If, based on the

work we have performed, we conclude that there is a material

misstatement of this other information, we are required to report

that fact.

We have nothing to report in this regard.

Our opinion on other matters prescribed by the
Companies Act 2006 is unmodified
In our opinion, based on the work undertaken in the course of the

audit:

•

the information given in the strategic report and the

Auditor’s responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether

the financial statements as a whole are free from material

misstatement, whether due to fraud or error, and to issue an

auditor’s report that includes our opinion. Reasonable assurance

is a high level of assurance, but is not a guarantee that an audit

conducted in accordance with ISAs (UK) will always detect a

material misstatement when it exists. Misstatements can arise

from fraud or error and are considered material if, individually or

in the aggregate, they could reasonably be expected to influence

the economic decisions of users taken on the basis of these

directors’ report for the financial year for which the financial

financial statements.

statements are prepared is consistent with the financial

statements; and

•

the strategic report and the directors’ report have been

A further description of our responsibilities for the audit of

the financial statements is located on the Financial Reporting

prepared in accordance with applicable legal requirements.

Council’s website at: www.frc.org.uk/auditorsresponsibilities. This

description forms part of our auditor’s report.

Matters on which we are required to report under the
Companies Act 2006
In the light of the knowledge and understanding of the group and

the parent company and its environment obtained in the course

of the audit, we have not identified material misstatements in the

strategic report or the directors’ report.

Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in

relation to which the Companies Act 2006 requires us to report to

you if, in our opinion:

•

adequate accounting records have not been kept by the

parent company, or returns adequate for our audit have not

been received from branches not visited by us; or

•

the parent company financial statements are not in

agreement with the accounting records and returns; or

•

certain disclosures of directors’ remuneration specified by

law are not made; or

•

we have not received all the information and explanations we

require for our audit.

Use of our report
This report is made solely to the company’s members, as a body,

in accordance with Chapter 3 of Part 16 of the Companies Act

2006. Our audit work has been undertaken so that we might

state to the company’s members those matters we are required

to state to them in an auditor’s report and for no other purpose.
To the fullest extent permitted by law, we do not accept or

assume responsibility to anyone other than the company and the

company’s members as a body, for our audit work, for this report,

or for the opinions we have formed.

Donna Steel

Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Sheffield
20 April 2020

Consolidated income statement for
the year ended 31 December 2019

Revenue, excluding movements in work in progress

(Decrease) / increase in work in progress

Revenue

Raw materials and consumables

Other external charges

Staff costs

Depreciation

Other operating charges

Group operating profit

Share of post tax profit in joint ventures

Total operating profit

Net finance expense

Profit before tax

Tax

Profit for the year

Note

2019

2018

£’000

108,357

(3,446)

104,911

76,462

804

77,266

73,995

3,621

16,700

1,814

2,845

49,826

3,296

15,258

1,502

2,383

(98,975)

(72,265)

5,936

–

5,936

(5)

5,931

(1,135)

4,796

5,001

–

5,001

(58)

4,943

(894)

4,049

Profit for the year attributable to equity holders of the parent company

4,796

4,049

Earnings per share (basic and diluted)

39.8p

33.6p

All results arose from continuing operations.

The statement of accounting policies and notes 1 to 24 form part of these Group financial statements.

Consolidated statement of
comprehensive income for the year
ended 31 December 2019

Profit for the year

Other comprehensive income

Items that will not be reclassified subsequently to profit or loss

Remeasurement of net defined benefit surplus

Movement on deferred tax relating to pension liability

Current tax relating to pension liability

Items that will be reclassified subsequently to profit or loss

Cash flow hedging

Current year gains / (losses)

Note

2019

£’000

2018

£’000

4,796

4,049

581

(98)

483

831

(532)

(7)

(442)

(831)

Other comprehensive income, net of tax

1,314

(1,273)

Total comprehensive income for the year attributable to equity holders of the parent company

6,110

2,776

The statement of accounting policies and notes 1 to 24 form part of these Group financial statements.

Shafton Steel Services

Consolidated balance sheet as at
31 December 2019

Assets

Non current assets

Property, plant and equipment

Pension asset

Investments in joint ventures

Deferred tax asset

Total non current assets

Current assets

Inventories and work in progress

Trade and other receivables

Cash and cash equivalents

Total current assets

Total assets

Liabilities

Current liabilities

Current portion of long term borrowings

Trade and other payables

Lease liabilities

Current tax payable

Total current liabilities

Non current liabilities

Long term borrowings

Lease liabilities

Deferred tax liabilities

Total non current liabilities

Total liabilities

Net assets

Equity

Share capital

Share premium

Capital redemption reserve

Other components of equity

Accumulated profits

Total equity

Note

2019

2018

£’000

9, 23

14,042

1,630

15,711

28,849

44,560

14,251

2,205

16,456

33,548

50,004

12,011

7,527

9,311

250

18,732

627

21,724

19,609

1,500

8,342

7,350

17,856

1,500

19,433

105

686

176

187

21,911

28,093

1,293

1,864

132

(820)

25,624

28,093

1,500

21,109

23,451

1,293

1,864

132

(1,675)

21,837

23,451

The Group financial statements were approved and authorised for issue by the Board of Directors on 20 April 2020.

Ian Lawson

Non executive Chairman

Trevor Taylor

Chief Financial Officer

The statement of accounting policies and notes 1 to 24 form part of these Group financial statements.

Consolidated statement
of changes in equity

for the year ended 31 December 2019

At 1 January 2018

Transactions with owners

Dividends (note 6)

Credit relating to equity-settled
share based payments

ESOP movement in year

Transactions with owners

Profit for the financial year

Other comprehensive income

Actuarial gain recognised in the pension scheme

Income tax relating to components
of other comprehensive income

Financial instruments

Total comprehensive income for the year

Share
Capital
£’000

Share
premium
account
£’000

Capital
redemption
reserve
£’000

Other
components
of equity
£’000

Accumulated
profits
£’000

Total
equity
£’000

1,293

1,864

132

(844)

19,531

21,976

–

(831)

(1,385)

–

(1,301)

4,049

(1,301)

4,049

(532)

–

3,607

(532)

(831)

2,776

At 31 December 2018

1,293

1,864

132

(1,675)

21,837

23,451

At 1 January 2019

Transactions with owners

Dividends (note 6)

Credit relating to equity-settled
share based payments

ESOP movement in year

Transactions with owners

Profit for the financial year

Other comprehensive income

Actuarial gain recognised in the pension scheme

Income tax relating to components
of other comprehensive income

Financial instruments

Total comprehensive income for the year

Share
Capital
£’000

Share
premium
account
£’000

Capital
redemption
reserve
£’000

Other
components
of equity
£’000

Accumulated
profits
£’000

Total
equity
£’000

1,293

1,864

132

(1,675)

21,837

23,451

–

831

(1,565)

(24)

–

(1,492)

(1,468)

4,796

581

(98)

–

5,279

25,624

581

(98)

831

6,110

28,093

At 31 December 2019

1,293

1,864

132

(820)

The Group accumulated profits reserve includes a surplus of £1,830,000 (2018 – £1,353,000) relating to the net pension surplus (note 21).

The statement of accounting policies and notes 1 to 24 form part of these Group financial statements.

Consolidated cash flow statement

for the year ended 31 December 2019

Cash flows from operating activities

Group profit after tax

Taxation paid

Interest received

Depreciation on property, plant and equipment

Share based payment charge

Profit on sale of property, plant and equipment

Taxation charge recognised in income statement

Net finance expense

Decrease / (increase) in inventories and work in progress

Decrease / (increase) in trade and other receivables

Increase in trade and other payables

Net cash flow from operating activities

Cash flows from investing activities

Purchase of property, plant and equipment

Proceeds from sale of property, plant and equipment

Net cash flow from investing activities

Cash flows from financing activities

Interest paid

Repayment of bank and other loans

Capital element of leasing payments

Dividends paid

Net cash flow from financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

The statement of accounting policies and notes 1 to 24 form part of these Group financial statements.

Note

2019

£’000

4,796

(959)

1,814

(331)

1,135

2018

£’000

4,049

(843)

1,502

(274)

894

3,669

(999)

177

(1,827)

1,532

11,978

1,944

4,611

(1,751)

(1,962)

341

283

(1,410)

(1,679)

(42)

(250)

(166)

(45)

(250)

(4)

(1,565)

(1,385)

(2,023)

(1,684)

8,545

9,311

17,856

1,248

8,063

9,311

First Way, Wembley

Principal accounting policies

These consolidated financial statements have been prepared
under the historical cost convention and in accordance with the
accounting policies set out below which comply with IFRS in
issue as adopted by the European Union and are effective at 31
December 2019.

The accounting policies have been applied consistently
throughout the Group for the purposes of preparation of these
consolidated financial statements.

Going Concern

The consolidated financial statements have been prepared on

outbreak on the Group’s trading and cash flow forecasts. In

a going concern basis. The directors have taken note of the

preparing this analysis, a number of scenarios were modelled

guidance issued by the Financial Reporting Council on Going

ranging from a 30% drop in revenue by June 2020 followed by

Concern Assessments in determining that this is the appropriate

a gradual recovery from September through to December, to

basis of preparation of the financial statements and have

a total country-wide lockdown and subsequent closure of all

considered a number of factors.

sites for up to six months. In each scenario, mitigating actions

within the control of management, including reductions in areas

The financial position of the Group, its record trading performance

of discretionary spend, have been modelled, but no fixed cost

in 2019 and cash flows are detailed in the Financial Review and

reductions have been assumed. It is difficult to predict the overall

they demonstrate the robust position of the Group heading into

outcome and impact of Covid-19 at this stage and the duration of

2020.

disruption could conceivably be longer than anticipated. However,

even under the scenario of the closure of all sites for a significant

The Group has a gross cash balance of £17.9 million at 31

period, the company has sufficient liquidity and resources to

December 2019 and no significant long-term borrowings or

continue to meet liabilities as they fall due, without any additional

commitments. At the end of March 2020 the Group had a gross

funding from either financial institutions or the government, which

cash balance of £13.0 million and during March 2020 the Group

is considered separately below.

have secured a 12 month overdraft facility of £3 million, giving the

Group available cash to utilise of £16.0 million.

The UK Government has announced a number of funding

initiatives throughout March 2020 to support businesses. The

The directors have prepared forecasts covering the period to April

main scheme that the Group is eligible for is the Coronavirus

2021 and approved by the Board in March 2020. The forecasts
reflect the exceptional nature of the 2019 trading performance

Job Retention Scheme. The Scheme grants support from HMRC
to cover up to 80% of salary costs of anyone not working due to

and the current political and economic uncertainty and pricing

Coronavirus but whose job has been retained, up to a maximum

pressures in the structural steel market, excluding the potential

of £2,500 per month for an initial period up to 31 May 2020, but it

impact of Covid-19 which is considered below.

will be extended if necessary. If there was a significant reduction

in operations or if any or all of the sites were required to close, the

The uncertainty as to the future impact on the Group of the recent

scheme would provide a significant amount of support and short-

Covid-19 outbreak has been separately considered as part of the

term cost reduction without impacting the long-term strategy of

directors’ consideration of the going concern basis of preparation.

the Group.

The directors put in a place many positive preventative measures

at an early stage in the outbreak in response to Covid-19 to

Notwithstanding these positive indications of the financial stability

minimise the potential impact. Thus far, the measures have been

of the Group, there is a risk that the impact of Covidd-19 could

effective and the Group has not observed any material impact in

be more significant than can be currently anticipated and the

operations due to Covid-19.

Directors have concluded that these circumstances represent a

material uncertainty which could cast significant doubt on the

In the downside scenario analysis performed, the directors have

Group’s ability to continue as a going concern.

considered the reasonably plausible impact of the Covid-19

Nonetheless, the Directors expect that the Group has sufficient

Instead of performing an impairment review on the right-of-use

resources to enable it to continue to adopt the going concern basis

assets at the date of initial application, the Group has relied

in preparing the financial statements. These financial statements

on its historic assessment as to whether leases were onerous

do not include any adjustment that would arise if the going

immediately before the date of initial application of IFRS 16 and

concern basis of preparation was not considered appropriate.

has benefited from the use of hindsight for determining lease

(a) Changes in accounting policies

New and revised standards that are effective for annual
periods beginning on or after 1 January 2019

IFRS 16 ‘Leases’
IFRS 16 Leases replaces IAS 17 Leases along with three

Interpretations (IFRIC 4 Determining whether an Arrangement

contains a Lease, SIC 15 Operating Leases-Incentives and SIC

27 Evaluating the Substance of Transactions Involving the Legal

Form of a Lease). The standard is mandatory for reporting periods

beginning on or after 1 January 2019. Under the new standard,

an asset (the right-of-use asset) and a financial liability are

recognised. The only exceptions are short term and low value

leases.

Billington Holdings Plc has applied the modified retrospective

approach to the transition to IFRS 16, recognising the cumulative

effect at the date of initial application (1 January 2019) as an

adjustment to the opening balance of retained earnings for the

term when considering options to extend and terminate leases.

The Group has also elected not to reassess whether a contract

is, or contains, a lease at the date of initial application. Instead,

for contracts entered into before the transition date the Group

relied on its assessment made applying IAS 17 Leases and IFRIC 4

Determining whether an arrangement contains a lease.

On transition to IFRS 16 the weighted average incremental

borrowing rate applied to lease liabilities recognised under IFRS

16 was 2.5%.

The below is a reconciliation of the financial statement line items

from IAS 17 to IFRS 16 at 1 January 2019.

Other pronouncements
Other accounting pronouncements which have become effective

from 1 January 2019 and have therefore been adopted do not have

a significant impact on the Group’s financial results or position

(b) Basis of consolidation

current period. The adjustment amounted to £nil. Prior periods

The Group financial statements consolidate those of the Parent

have not been restated. On transition, for leases previously

company and all of its subsidiary undertakings. Subsidiaries

accounted as operating leases with a lease term of less than 12

are entities over which the Group has the power to control the

months and for leases of low-value assets, the Group has applied

financial and operating policies so as to obtain benefits from its

the optional exemptions in the standard to not recognise right-of-

activities. The Group obtains and exercises control through voting

use assets but to account for the lease expense on a straight-line

rights.

basis over the remaining lease term.

Income, expenditure, unrealised gains and intra-group balances

The Group has elected not to include initial direct costs in the

arising from transactions within the Group are eliminated.

measurement of the right-of-use asset for operating leases

Unrealised losses are also eliminated unless the transaction

in existence at the date of initial application of IFRS 16. The

provides evidence of an impairment of the assets transferred.

Group also elected to measure the right-of-use assets at an

Amounts in the financial statements of subsidiaries have been

amount equal to the lease liability adjusted for any prepaid or

adjusted where necessary to ensure consistency with the

accrued lease payments that existed at the date of transition.

accounting policies adopted by the Group.

Property, plant and equipment

Lease liability

Carrying amount
at 31 December 2018
£’000

Remeasurement
£’000

IFRS 16 carrying amount at 1
January 2019
£’000

14,042

–

282

(282)

14,324

(282)

The following is a reconciliation of total operating lease commitments at 31 December 2018 (as disclosed in the financial statements to 31

December 2018) to the lease liabilities recognised at 1 January 2019:

Total operating lease commitments disclosed at 31 December 2018

Assets not recognised as low value or short term

Discounted using incremental borrowing rate

Total lease liabilities recognised under IFRS 16 at 1 January 2019

361

(72)

(7)

282

Principal Accounting Policies Continued

Acquisitions of subsidiaries are dealt with by the acquisition

To depict the progress by which the Group transfers control of

method. The acquisition method involves the recognition at fair

the construction to the customer, and to establish when and to

value of all identifiable assets and liabilities, including contingent

what extent revenue can be recognised, the Group measures

liabilities of the subsidiary, at the acquisition date, regardless of

its progress towards complete satisfaction of the performance

whether or not they were recorded in the financial statements

obligation by use of qualified quantity surveyors and progress

of the subsidiary prior to acquisition. On initial recognition,

certificates received from customers. This output method provides

the assets and liabilities of the subsidiary are included in the

the most faithful depiction of the transfer of goods to each

consolidated balance sheet at their fair values, which are also

customer.

used as the bases for subsequent measurement in accordance

with the Group accounting policies. Goodwill is stated after

The construction of structural steel frames normally takes 6–12

separating out identifiable intangible assets. Goodwill represents

months from commencement of design through to completion of

the excess of the fair value of the consideration transferred to the

installation. As the period of time between customer payment and

vendor over the fair value of the Group’s share of the identifiable

performance will always be one year or less, the Group applies the

net assets of the acquired subsidiary at the date of acquisition.

practical expedient in IFRS 15.63 and does not adjust the promised

amount of consideration for the effects of financing.

In obtaining these contracts, the Group incurs a number of

Revenue arises mainly from contracts for the design, fabrication

incremental costs, such as commissions paid to sales staff. As the

and erection of structural steelwork. To determine whether to

amortisation period of these costs, if capitalised, would be less

recognise revenue, the Group follows a 5-step process:

than one year, the Group makes use of the practical expedient in

IFRS 15.94 and expenses them as they incur.

Identifying the contract with a customer

Identifying the performance obligations

3. Determining the transaction price

Safety solutions
Revenue from the sale or hire of safety solutions for a fixed fee is

Allocating the transaction price to the performance

recognised when or as the Group transfers control of the assets to

obligations

the customer. Invoices for goods or services transferred are due

5. Recognising revenue when/as performance obligation(s) are

upon receipt by the customer.

satisfied.

The Group often enters into transactions involving a range of the

point in time the installation is complete and hand-over is signed

For stand-alone sales of safety solutions, control transfers at the

Group’s products and services, for example for the design and

by the customer.

construction of a steel frame, along with secondary steelwork

packages and edge protection. In all cases, the total transaction

In the case of asset rentals relating to the use of the Group’s safety

price for a contract is allocated amongst the various performance

solutions products, revenue is charged to customers on a time

obligations based on their relative stand-alone selling prices.

accrual basis.

Revenue is recognised either at a point in time or over time, when

(or as) the Group satisfies performance obligations by transferring

Other sales
In all other cases, revenue represents the fair value of

the promised goods or services to its customers.

The Group recognises contract liabilities for consideration received

in respect of unsatisfied performance obligations and reports

consideration received or receivable for goods supplied in the

period, excluding VAT and other discounts. Revenue is recognised

when or as the Group transfers control of the assets to the
customer, which is when the customer takes undisputed delivery

these amounts within trade and other payables in the statement of

of the goods.

financial position. Similarly, if the Group satisfies a performance

obligation before it receives the consideration, the Group

The Group does not recognise the revenue and profit attributable

recognises either work in progress or a receivable in its statement

to claims and disputed amounts on contracts until the recovery of

of financial position, depending on whether something other than

these amounts is considered probable and when the outcome can

the passage of time is required before the consideration is due.

be estimated reliably.

Construction of structural steelwork
The Group enters into contracts for the design, fabrication and

erection of structural steel frames in exchange for a fixed fee

and recognises the related revenue over time. Due to the high

degree of interdependence between the various elements of

these projects, they are accounted for as a single performance

obligation.

(d) Property, plant and equipment

Property, plant and equipment is stated at cost, net of depreciation

and any provision for impairment.

The gain or loss arising on the disposal of an asset is determined

as the difference between the disposal proceeds and the carrying

amount of the asset and is recognised in the income statement.

Depreciation is calculated to write off the cost of property, plant

and equipment (other than freehold land) less estimated residual

(f) Taxation

value by equal annual instalments over their expected useful lives.

The expected useful lives and material residual value estimates

are updated as required, but at least annually.

Current tax is the tax currently payable based on taxable profit for

the year.

The rates applicable are:

Freehold and long leasehold property

Plant, equipment and vehicles

2% to 4%

5% to 40%

Investment property is carried at fair value determined annually by

the directors by reference to current market rents and investment

property yields for comparable properties. No depreciation

is provided. Changes in fair value are recognised in retained

earnings.

Impairment testing of property, plant and equipment
For the purposes of assessing impairment, assets are grouped

at the lowest levels for which there are separately identifiable

cash flows (cash-generating units). As a result, some assets are

tested individually for impairment and some are tested at a cash-

generating unit level.

Individual assets or cash-generating units are tested for

impairment whenever events or changes in circumstances indicate

that the carrying amount may not be recoverable.

An impairment loss is recognised for the amount by which the

asset’s or cash-generating unit’s carrying amount exceeds its

recoverable amount. The recoverable amount is the higher of fair

value, reflecting market conditions less costs to sell, and value

in use based on an internal discounted cash flow evaluation.

All assets are subsequently reassessed for indications that an

impairment loss previously recognised may no longer exist.

(e) Inventories and work in progress

Inventories and work in progress are valued at the lower of cost,

including applicable overheads, and net realisable value. Costs of

ordinarily interchangeable items are assigned using the first in,
first out cost formula.

Contract work in progress is included in revenue. If the Group

satisfies a performance obligation before it receives the

consideration, the Group recognises either a contract asset or

receivable in its statement of financial position, depending on

whether something other than the passage of time is required

before consideration is due.

Provision is made for probable losses on all contracts based on

the loss which is currently estimated to arise over the duration of

any contract, irrespective of the amount of work carried out at the

balance sheet date.

Deferred income taxes are calculated using the liability method on

temporary differences. Deferred tax is generally provided on the

difference between the carrying amounts of assets and liabilities

and their tax bases. However, deferred tax is not provided on

the initial recognition of goodwill, nor on the initial recognition of

an asset or liability unless the related transaction is a business

combination or affects tax or accounting profit. Deferred tax on

temporary differences associated with shares in subsidiaries is

not provided if reversal of these temporary differences can be

controlled by the Group and it is probable that reversal will not

occur in the foreseeable future. In addition, tax losses available to

be carried forward as well as other income tax credits to the Group

are assessed for recognition as deferred tax assets.

Deferred tax liabilities are provided in full, with no discounting.

Deferred tax assets are recognised to the extent that it is probable

that the underlying deductible temporary differences will be able

to be offset against future taxable income. Current and deferred

tax assets and liabilities are calculated at tax rates that are

expected to apply to their respective period of realisation, provided

they are enacted or substantively enacted at the balance sheet

date.

Changes in deferred tax assets or liabilities are recognised as

a component of tax expense in profit or loss, except where they

relate to items that are recognised in other comprehensive income

(i.e. actuarial gains and losses) in which case the related deferred

tax is also recognised in other comprehensive income.

(g) Retirement benefits

Defined Contribution pension schemes
The pension costs charged against operating profits represent the

amount of the contributions payable to the schemes in respect of

the accounting period.

Defined Benefit pension schemes
Scheme assets are measured at fair values. Scheme liabilities are

measured on an actuarial basis using the projected unit method

and are discounted at appropriate high quality corporate bond

rates that have terms to maturity approximating to the terms of

the related liability. Past service cost is recognised as an expense

on a straight-line basis over the average period until the benefits

become vested. To the extent that benefits are already vested the

Group recognises past service cost immediately.

Actuarial gains and losses are recognised immediately in other

comprehensive income. The gross surplus or deficit is presented

on the face of the statement of financial position. The related

deferred tax is shown with other deferred tax balances. A surplus

is recognised only to the extent that it is recoverable by the Group.

Principal Accounting Policies Continued

The current service cost, past service cost and costs from

Lease payments included in the measurement of the lease liability

settlements and curtailments are charged against other operating

are made up of fixed payments (including in substance fixed),

charges. Interest on the scheme liabilities and the expected return

variable payments based on an index or rate, amounts expected to

on scheme assets are included in other finance income/costs.

be payable under a residual value guarantee and payments arising

Short-term employee benefits, including holiday entitlement, are

from options reasonably certain to be exercised.

included in current pension and other employee obligations at the

undiscounted amount that the Group expects to pay as a result of

Subsequent to initial measurement, the liability will be reduced

the unused entitlement.

(h) Leased assets

for payments made and increased for interest. It is remeasured to

reflect any reassessment or modification, or if there are changes

in in-substance fixed payments.

As described in Note (a), the Group has applied IFRS 16 using

When the lease liability is remeasured, the corresponding

the modified retrospective approach and therefore comparative

adjustment is reflected in the right-of-use asset, or profit and loss

information has not been restated. This means comparative

if the right-of-use asset is already reduced to zero.

information is still reported under IAS 17 and IFRIC 4.

Accounting policy applicable from 1 January 2019
For any new contracts entered into on or after 1 January 2019,

the Group considers whether a contract is, or contains a lease. A

lease is defined as ‘a contract, or part of a contract, that conveys
the right to use an asset (the underlying asset) for a period of time

in exchange for consideration’. To apply this definition the Group

assesses whether the contract meets three key evaluations which

are whether:

The Group has elected to account for short-term leases and leases

of low-value assets using the practical expedients. Instead of

recognising a right-of-use asset and lease liability, the payments

in relation to these are recognised as an expense in profit or loss

on a straight-line basis over the lease term.

On the statement of financial position, right-of-use assets

have been included in property, plant and equipment and lease

liabilities have been separately disclosed.

•

the contract contains an identified asset, which is either

explicitly identified in the contract or implicitly specified by

Accounting policy applicable before 1 January 2019
The economic ownership of a leased asset is transferred to the

being identified at the time the asset is made available to the

lessee if the lessee bears substantially all the risks and rewards

Group

related to the ownership of the leased asset. The related asset is

•

the Group has the right to obtain substantially all of the

recognised at the time of inception of the lease at the fair value

economic benefits from use of the identified asset throughout

of the leased asset or, if lower, the present value of the minimum

the period of use, considering its rights within the defined

lease payments plus incidental payments, if any, to be borne by

scope of the contract

the lessee. A corresponding amount is recognised as a finance

•

the Group has the right to direct the use of the identified

leasing liability.

asset throughout the period of use. The Group assess

whether it has the right to direct ‘how and for what purpose’

All other leases are regarded as operating leases and the

the asset is used throughout the period of use.

Recognition and derecognition
At lease commencement date, the Group recognises a right-of-

use asset and a lease liability on the balance sheet. The right-

of-use asset is measured at cost, which is made up of the initial

measurement of the lease liability, any initial direct costs incurred

by the Group, an estimate of any costs to dismantle and remove

the asset at the end of the lease, and any lease payments made in

advance of the lease commencement date (net of any incentives

received).

The Group depreciates the right-of-use assets on a straight-line

basis from the lease commencement date to the earlier of the

end of the useful life of the right-of-use asset or the end of the

lease term. The Group also assesses the right-of-use asset for

impairment when such indicators exist.

At the commencement date, the Group measures the lease liability

at the present value of the lease payments unpaid at that date,

discounted using the interest rate implicit in the lease if that rate
is readily available or the Group’s incremental borrowing rate.

payments made under them are charged to profit or loss on

a straight line basis over the period of the lease term. Lease

incentives are spread over the term of the lease.

(i) Employee Share Ownership Trust
(ESOT)

The Group’s Employee Share Ownership Trust (“ESOT”) is a

separately administered trust. The assets of the ESOT comprise

shares in the company and cash. The assets, liabilities, income

and costs of the ESOT have been included in the consolidated

financial statements as the Group exercises control over the

ESOT in accordance with the terms of the trust deed. The shares

in the Company are included at cost to the ESOT and deducted

from equity and dividend income is excluded in arriving at profit

before tax and deducted from the aggregate of dividends paid and

proposed. When calculating earnings per share these shares are

treated as if they were cancelled. The charge relating to share

options is determined using the Black-Scholes model to ascertain

the fair value of the granted options. Details of the charge through

the Consolidated Income Statement can be seen in notes 3 and 10
of the Group financial statements.

(j) Foreign currencies

Transactions in foreign currencies are translated at the exchange

rate ruling at the date of the transaction. Monetary assets and

Subsequent measurement of financial assets
Financial assets at amortised cost

liabilities in foreign currencies are translated at the rates of

Financial assets are measured at amortised cost if the assets

exchange ruling at the balance sheet date. All foreign exchange

meet the following conditions (and are not designated as FVTPL):

differences are dealt with through the income statement, unless

subject to hedging arrangements.

(k) Joint ventures

•

they are held within a business model whose objective is

to hold the financial assets and collect its contractual cash

flows

•

the contractual terms of the financial assets give rise to cash

Joint ventures are entities over which the Group holds a

flows that are solely payments of principal and interest on the

contractual share of joint control. The Group financial statements

principal amount outstanding.

incorporate joint ventures under the equity method of accounting,

supplemented by additional disclosures.

After initial recognition, these are measured at amortised cost

using the effective interest method. Discounting is omitted where

The Group’s share of the profits, losses, finance income, finance

the effect of discounting is immaterial. The Group’s cash and

cost and taxation of joint ventures are included in the Group

cash equivalents, trade and most other receivables fall into this

income statement. The Group balance sheet includes the

category of financial instruments.

investment in joint ventures at the Group’s share of net assets.

(l) Financial instruments

Impairment of financial assets
IFRS 9’s impairment requirements use more forward-looking

information to recognise expected credit losses – the ‘expected

Recognition and derecognition
Financial assets and financial liabilities are recognised when

credit loss (ECL) model’. This replaces IAS 39’s ‘incurred loss

model’. Instruments within the scope of the new requirements

the Group becomes a party to the contractual provisions of the

included loans and other debt-type financial assets measured

financial instrument.

at amortised cost and FVOCI, trade receivables, contract assets

recognised and measured under IFRS 15 and loan commitments

Financial assets are derecognised when the contractual rights

and some financial guarantee contracts (for the issuer) that are

to the cash flows from the financial asset expire, or when the

not measured at fair value through profit or loss.

financial asset and substantially all the risks and rewards

are transferred. A financial liability is derecognised when it is

Recognition of credit losses is no longer dependent on the Group

extinguished, discharged, cancelled or expires.

Classification and initial measurement of financial assets
Financial assets, other than those designated and effective as

hedging instruments, are classified into the following categories:

first identifying a credit loss event. Instead the Group considers

a broader range of information when assessing credit risk and

measuring expected credit losses, including past events, current

conditions, reasonable and supportable forecasts that affect the

expected collectability of the future cash flows of the instrument.

•

amortised cost

In applying this forward-looking approach, a distinction is made

fair value through profit or loss (FVTPL)

between:

fair value through other comprehensive income (FVOCI).

In the periods presented the Group does not have any financial
assets categorised as FVTPL or FVOCI.

The classification is determined by both:

•

financial instruments that have not deteriorated significantly

in credit quality since initial recognition or that have low

credit risk (‘Stage 1’) and

•

financial instruments that have deteriorated significantly in

credit quality since initial recognition and whose credit risk is

not low (‘Stage 2’).

•

the entity’s business model for managing the financial asset

the contractual cash flow characteristics of the financial

asset.

‘Stage 3’ would cover financial assets that have objective evidence

of impairment at the reporting date.

All income and expenses relating to financial assets that are

recognised in profit or loss are presented within finance costs,

‘12-month expected credit losses’ are recognised for the first

category while ‘lifetime expected credit losses’ are recognised for

finance income or other financial items, except for impairment of

the second category.

trade receivables which is presented within other expenses.

Measurement of the expected credit losses is determined by a

probability-weighted estimate of credit losses over the expected

life of the financial instrument.

Principal Accounting Policies Continued

Trade and other receivables and contract assets

All derivative financial instruments used for hedge accounting are

The Group makes use of a simplified approach in accounting for

recognised initially at fair value and reported subsequently at fair

trade and other receivables as well as contract assets and records

value in the statement of financial position.

the loss allowance as lifetime expected credit losses. These are

the expected shortfalls in contractual cash flows, considering

To the extent that the hedge is effective, changes in the fair

the potential for default at any point during the life of the

value of derivatives designated as hedging instruments in cash

financial instrument. In calculating, the Group uses its historical

flow hedges are recognised in other comprehensive income

experience, external indicators and forward-looking information to

and included within the cash flow hedge reserve in equity.

calculate the expected credit losses using a provision matrix.

Any ineffectiveness in the hedge relationship is recognised

immediately in profit or loss.

The Group assess impairment of trade receivables on a collective

basis as they possess shared credit risk characteristics they have

At the time the hedged item affects profit or loss, any gain or

been grouped based on the days past due. Refer to note 17 for a

loss previously recognised in other comprehensive income is

detailed analysis of how the impairment requirements of IFRS 9

reclassified from equity to profit or loss and presented as a

are applied.

reclassification adjustment within other comprehensive income.

However, if a non-financial asset or liability is recognised as a

Classification and measurement of financial liabilities
As the accounting for financial liabilities remains largely the same

result of the hedged transaction, the gains and losses previously

recognised in other comprehensive income are included in the

under IFRS 9 compared to IAS 39, the Group’s financial liabilities

initial measurement of the hedged item.

were not impacted by the adoption of IFRS 9. However, for
completeness, the accounting policy is disclosed below.

If a forecast transaction is no longer expected to occur, any

related gain or loss recognised in other comprehensive income

The Group’s financial liabilities include borrowings, trade and

is transferred immediately to profit or loss. If the hedging

other payables and derivative financial instruments.

relationship ceases to meet the effectiveness conditions, hedge

accounting is discontinued, and the related gain or loss is held in

Financial liabilities are initially measured at fair value, and,

the equity reserve until the forecast transaction occurs.

where applicable, adjusted for transaction costs unless the Group

designated a financial liability at fair value through profit or loss.

(m) Cash and cash equivalents

Subsequently, financial liabilities are measured at amortised

Cash and cash equivalents comprise cash on hand and demand

cost using the effective interest method except for derivatives

deposits.

and financial liabilities designated at FVTPL, which are carried

subsequently at fair value with gains or losses recognised in

profit or loss (other than derivative financial instruments that are

designated and effective as hedging instruments).

(n) Dividends

Dividend distributions payable to equity shareholders are included

in “trade and other payables” when the dividends are approved in

All interest-related charges and, if applicable, changes in an

general meeting prior to the balance sheet date and are debited

instrument’s fair value that are reported in profit or loss are

direct to equity within accumulated profits.

included within finance costs or finance income.

Derivative financial instruments and hedge accounting
Derivative financial instruments are accounted for at fair value

through profit and loss (FVTPL) except for derivatives designated

(o) Equity

Equity comprises the following:

as hedging instruments in cash flow hedge relationships, which

“Called up share capital” represents the nominal value of equity

require a specific accounting treatment. To qualify for hedge

shares.

accounting, the hedging relationship must meet all of the following

requirements:

“Share premium” represents the excess over nominal value of

the fair value of consideration received for equity shares, net of

•

there is an economic relationship between the hedged item

expenses of the share issue.

and the hedging instrument

•

the effect of credit risk does not dominate the value changes

“Capital redemption reserve” represents the purchase cost of

that result from that economic relationship

shares repurchased by the Group in 1998.

•

the hedge ratio of the hedging relationship is the same as

that resulting from the quantity of the hedged item that

“Other components of equity” represents the purchase cost of the

the entity actually hedges and the quantity of the hedging

shares held within the Employee Share Ownership Trust (ESOT)

instrument that the entity actually uses to hedge that quantity

and the cash flow hedge reserve (see note 18).

of hedged item.

“Accumulated profits” represents retained profit, and gains

and losses due to the revaluation of certain property, plant and

equipment prior to the implementation of IFRS.

(p) Segmental reporting

significant non-taxable income and expenses and specific limits

In identifying its operating segments, management follows the

to the use of any unused tax loss or credit. If a positive forecast

Group’s service lines, which represent the main products and

of taxable income indicates the probable use of a deferred tax

services provided by the Group. The disclosure is based on the

asset, especially when it can be utilised without a time limit,

information that is presented to the chief operating decision

that deferred tax asset is recognised in full to the extent that it

maker, which is considered to be the executive board of Billington

is probable taxable profits will be available. The recognition of

Holdings plc. There have been no changes from prior periods in

deferred tax assets that are subject to certain legal or economic

the measurement methods used to determine segment profit or

limits or uncertainties is assessed individually by management

loss.

based on the specific facts and circumstances.

(q) Standards and interpretations

Estimation uncertainty
When preparing the financial statements management undertakes

At the date of authorisation of these financial statements, several

a number of judgements, estimates and assumptions about

new, but not yet effective, Standards, amendments to existing

recognition and measurement of assets, liabilities, income and

Standards, and Interpretations have been published by the IASB.

expenses. The actual results may differ from the judgements,

None of these Standards, amendments or Interpretations have

estimates and assumptions made by management, and will

been adopted early by the Group.

seldom equal the estimated results. Information about significant

judgements, estimates and assumptions that have the most

Management anticipates that all relevant pronouncements will

significant effect on recognition and measurement of assets,

be adopted for the first period beginning on or after the effective

liabilities, income and expenses are discussed below.

date of the pronouncement. New Standards, amendments and

Interpretations not adopted in the current year have not been

disclosed as they are not expected to have a material impact on

the Group’s financial statements.

(r) Significant management judgements
and estimates in applying accounting
policies

The following are significant management judgements in applying

the accounting policies of the Group that have the most significant

effect on the financial statements. Critical estimation uncertainties

are described below.

Construction contract revenue
The stage of completion of any construction contract is assessed

by management by taking into consideration all information

available at the reporting date. In this process management

makes significant judgements about performance obligations

satisfied, costs to complete and the overall contract value. In

identifying the performance obligations satisfied, management

rely on the knowledge and experience of the Group’s quantity

surveyors. Further information on the Group’s accounting policy

for construction contracts is provided in policy c.

Recognition of pension scheme surplus
Management consider that where the pension scheme is in

surplus it is appropriate to recognise this as an asset in the Group

balance sheet. The scheme rules indicate that any surplus will be

returned to the sponsoring company upon cessation.

Useful lives of depreciable assets
Management reviews the useful lives of depreciable assets at

each reporting date. At 31 December management assesses that

the useful lives represent the expected utility of the assets to the

Group. The carrying amounts are analysed in note 8.

Inventories
Inventories are measured at the lower of cost and net realisable

value. In estimating net realisable values, management takes into

account the most reliable evidence of market value available at the

times the estimates are made.

Defined benefit obligation
Management estimates the defined benefit obligation annually

with the assistance of independent actuaries; however, the actual

outcome may vary due to estimation uncertainties. The estimate

of its defined benefit obligation of £6,347,000 (2018: £6,167,000)

is based on standard rates of inflation and appropriate mortality

tables. It also takes into account the Group’s specific anticipation
of future salary increases. Discount factors are determined close

to each year-end by reference to high quality corporate bonds that

are denominated in the currency in which the benefits will be paid

and that have terms to maturity approximating to the terms of the

related pension obligation.

An estimation has been made for the impact of the equalisation of

GMP following the outcome of the Lloyds Banking Group Pension

Trustees Limited vs Lloyds Bank plc (and others) court case.

While further information as to the impact remains unavailable,

management have included a provision further to the specialist

advice received. The impact is not material to these financial

Deferred tax asset
The assessment of the probability of future taxable income against

statements.

which deferred tax assets can be utilised is based on the Group’s

The defined benefit pension scheme was closed to future accrual

latest approved budget forecast, which is adjusted for

in 2011.

Principal Accounting Policies Continued

(s) Capital management policies and
procedures

Billington Holdings’ capital management objectives are to ensure

the Group’s ability to continue as a going concern and provide an

adequate return to shareholders.

The Group and subsidiary companies’ Boards meet regularly to

review performance and discuss future opportunities and threats

with an aim to maximising return and minimising risk.

The Group monitors capital as the carrying amount of equity less

cash and cash equivalents as set out on the face of the balance

sheet. There are no covenants in place over the capital ratio to be

maintained.

TK Maxx, Watford

Notes forming part of the Group
financial statements for the year
ended 31 December 2019

1. Segmental information

The Group trading operations of Billington Holdings plc are in

of easi-edge Limited and hoard-it Limited. The Group activities,

Structural Steelwork and Safety Solutions, and all are continuing.

comprising services and assets provided to Group companies and

The Structural Steelwork segment includes the activities of

a small element of external property rentals and management

Billington Structures Limited and Peter Marshall Steel Stairs

charges, are shown in Other. All assets of the Group reside in the

Limited, and the Safety Solutions segment includes the activities

UK.

31 December 2019

Revenue

From external customers

Increase in work in progress

Segment revenues

Raw materials and consumables

Other external charges

Staff costs

Depreciation

Other operating charges

Segment operating profit

31 December 2018

Revenue

From external customers

Increase in work in progress

Segment revenues

Raw materials and consumables

Other external charges

Staff costs

Depreciation

Other operating charges

Segment operating profit

Structural
steelwork

Safety
solutions

Other

Total

100,233

(3,446)

96,787

(71,846)

(2,460)

(13,523)

(579)

(4,064)

4,315

69,360

804

70,164

(47,910)

(2,187)

(12,338)

(737)

(3,361)

3,631

8,124

–

8,124

(2,149)

(1,161)

(1,624)

(908)

(643)

1,639

7,102

–

7,102

(1,916)

(1,109)

(1,485)

(659)

(565)

1,368

–

(1,553)

(327)

1,862

(18)

–

(1,435)

(106)

1,543

108,357

(3,446)

104,911

(73,995)

(3,621)

(16,700)

(1,814)

(2,845)

5,936

76,462

804

77,266

(49,826)

(3,296)

(15,258)

(1,502)

(2,383)

5,001

2. Revenue and profit before tax

Revenue and profit before tax are attributable to the Group’s

The one contractor with revenue of greater than 10% in 2019 and

continuing operations. One customer included within the

2018 relate to the same customer. Revenue from contracts with

structural steel sector accounted for greater than 10% of the

customers and from operating lease income is recognised over

Group’s revenue. This contractor accounted for 49% (2018: one

time and revenue from other sources is recognised at a point in

contractor greater than 10% with 11%) of Group revenue.

time.

Analysis of revenue (excluding movement in work in progress):

Structural steelwork

Safety solutions

Contracts with
customers

Other sources
of revenue

Operating lease
income

Other sources of
revenue

31 December 2019

United Kingdom

Europe

Rest of the World

31 December 2018

United Kingdom

Europe

Rest of the World

Total

79,461

28,896

–

69,556

28,896

–

98,452

1,781

5,404

2,720

–

1,781

5,404

2,720

108,357

65,943

2,633

4,776

2,326

75,678

784

–

784

–

66,727

2,633

4,776

2,326

76,462

Information about contract balances

Contract liabilities

Contract assets

Contract receivables

There was no revenue recognised in the reporting period that was
included in the contract liability balance at the beginning of the
period.

There was no revenue recognised in the reporting period from
performance obligations satisfied or partially satisfied in previous
periods.

2019
£’000

(2,869)

7,678

4,053

2018
£’000

(5,205)

11,124

4,690

Information about performance obligations and
significant judgements
Contracts with customers are typically for the construction of
structural steelworks. These contracts typically conclude within
twelve months of commencement, with obligations to make good
generally lasting until a building is handed over by the main
contractor. Revenue is recognised over time upon completion of
performance obligations, evidence of the satisfaction of which is
provided by certifications or cash payments received directly from
the client. Judgement is exercised by management in the provision
of contract liabilities to ensure that profit is not recognised on a
contract until it is reasonably certain.

Profit before tax is stated after

An analysis of fees paid to the Group’s auditor

Fees payable to the parent company’s auditor for the audit of the company’s annual accounts

Fees payable to the company’s auditor for other services:

the audit of the company’s subsidiaries

tax compliance

tax advisory

other services

Depreciation

Profit on disposal of property, plant and equipment

Operating lease charges:

short term hire of plant and machinery

operating leases – other

operating leases – property

2019
£’000

2018
£’000

1,814

331

1,502

274

215

Notes forming part of the Group financial statements for the year ended
31 December 2019 Continued
3. Staff costs

Staff costs during the year including directors

Wages and salaries

Social security

Pension costs

Share-based payments

2019
£’000

14,639

1,464

500

2018
£’000

13,254

1,478

442

16,700

15,258

The average number of employees of the Group during the year was 399 (2018: 379).

Key management are only considered to be the directors of Billington Holdings Plc and all are remunerated through this Company.

Remuneration in respect of key management was as follows:

Remuneration in respect of key management

Executive

M. Smith

T.M. Taylor

Non Executive

P.K. Hems

I. Lawson

J.S. Gordon

S.J. Wardell

S.G.T Fareham

A. Ospelt

Employer’s NI

Key management personnel compensation

Short-term employee benefits

Long-term employee benefits

Salary
and fees
£’000

Other
emoluments
£’000

Pension
£’000

212

161

–

Total
2019
£’000

292

223

Total
2018
£’000

266

222

517

129

662

653

744

728

744

732

709

732

Other emoluments received consist of the provision for private medical care, bonuses and motor car allowances.

During the year it was agreed to award Mr M. Smith 68,966 and 4,689 share options and Mr T.M. Taylor 51,724 and 3,696 share options

related to a long term incentive plan and unapproved share option scheme respectively, exercisable at nil value between the third and

tenth anniversary of their grant.

During the year two directors (2018: no directors) exercised share options with total exercise price of £82,500. During the year no directors
(2018: no directors) participated in defined benefit pension schemes and two directors (2018: two directors) participated in a defined

contribution pension scheme.

4. Net finance expense

Payable on bank loans and overdrafts

Interest expense for leasing arrangements

Receivable on bank balances

Other finance income – pension scheme (see note 21)

Net finance expense

5. Tax on profit on ordinary activities

The tax charge represents

Corporation tax at 19% (2018 – 19%)

Adjustment in respect of prior years

Total current tax

Deferred tax charge – (note 16)

Adjustment in respect of prior years – (note 16)

Total tax charge for the year

Tax relating to other comprehensive income:

Corporation tax at 19% (2018 – 19%)

Current tax charge relating to pension liability

2019
£’000

(36)

(6)

(5)

2018
£’000

(45)

–

(36)

(58)

2019
£’000

1,018

114

1,135

2019
£’000

2018
£’000

1,065

(64)

1,001

(107)

894

2018

£’000

–

The tax assessed for the year is at the standard rate of corporation tax in the United Kingdom of 19% (2018: 19%). The differences are

explained as follows:

Differences to standard rate of corporation tax

Profit on ordinary activities before tax

2019
£’000

5,931

2018
£’000

4,943

Profit multiplied by the standard rate of corporation tax in the United Kingdom of 19% (2018: 19%)

1,127

939

Effects of:

expenses not deductible for tax purposes

fixed asset differences

adjustments to tax charge in respect of prior years

rate differences

deferred tax not recognised

other adjustments

Total tax charge for year

(13)

(39)

1 ,135

(64)

(16)

(5)

894

Notes forming part of the Group financial statements for the year ended
31 December 2019 Continued

6. Dividends

7. Earnings per share

A final dividend was paid in July 2019 in respect of 2018 of 13.0

Earnings per share is calculated by dividing the profit for the

pence per ordinary share (£1,565,000).

year of £4,796,000 (2018: profit - £4,049,000) by 12,052,554 (2018:

12,044,508) fully paid ordinary shares, being the weighted average

No final dividend has been proposed in respect of 2019 as the

number of ordinary shares in issue during the year, excluding

dividend has been suspended to preserve cash resources.

those held in the ESOT.

There is no impact on a full dilution of the earnings per share

calculation as there are no potentially dilutive ordinary shares.

8. Property, plant and equipment

Freehold property
£’000

Long
leasehold property
£’000

Investment
property
£’000

Plant, equipment
and vehicles
£’000

Cost

At 1 January 2018

Additions

Reclassification

Disposals

At 1 January 2019

Adjustment on transition to IFRS 16

Additions

Reclassification

Disposals

At 31 December 2019

Depreciation

At 1 January 2018

Charge for year

Disposals

At 1 January 2019

Charge for year

Disposals

At 31 December 2019

Net book value at 31 December 2019

Net book value at 31 December 2018

7,796

600

–

8,460

–

(63)

1,000

–

1,000

125

–

8,414

1,125

680

–

766

–

854

7,560

7,694

–

1,046

1,000

600

–

(600)

–

Total
£’000

26,795

1,962

–

(977)

17,399

1,898

–

(977)

18,320

27,780

157

1,734

(3,455)

16,819

12,524

1,416

(968)

12,972

1,647

(3,445)

11,174

5,645

5,348

282

1,751

–

(3,455)

26,358

13,204

1,502

(968)

13,738

1,814

(3,445)

12,107

14,251

14,042

Freehold property includes £3,994,000 in respect of land which is not subject to depreciation. Long leasehold property represents land
which is not subject to depreciation.

The Group has a contractual commitment to acquire plant of £349,000 payable in 2020. There were no other material contractual

commitments to acquire property, plant and equipment at 31 December 2019 (2018: nil).

All the Group’s freehold properties have been charged to the bank to secure bank facilities.

9. Investments

All Group companies have only ordinary shares in issue and are registered in England and Wales unless otherwise stated.

The subsidiary undertakings and joint ventures are as follows:

Continuing

Billington Structures Limited

easi-edge Limited

Peter Marshall Steel Stairs Limited

hoard-it Limited

Billington Fleet Management Limited

Shafton Steel Limited

Shafton Steel Services Limited

Tubecon Limited

Amco Corporation Limited

Joint ventures

BS2 (2011) Limited

Proportion of shares held by

Activity

Group

Company

Structural steel

Safety solutions

Structural steel

Site hoarding solutions

Vehicle leasing solutions

Dormant

100

Structural steel

–

10. Share based payments

The Employee Share Ownership Trust (“the Trust/ESOT”) was

Dividends have been waived by the Trust.

established by Deed dated 14 December 2015 between Billington

Holdings plc (“the Company”) and Ocorian Trustees (Jersey)

During the year ended 31 December 2019, the Group had

Limited (“the Trustee”) (previously Bedell Trustees Limited). It is

three share-based payment arrangements. Under each of the

an employee benefit trust established for the benefit of the bona

arrangements the options are granted with a fixed exercise price,

fide employees of the Company and other Group companies (“the

are exercisable three years after the date of grant and expire

Beneficiaries”). The Trust is a discretionary trust whose assets at

ten years after the date of grant. Employees are not entitled

present are shares in the Company and cash, although there are

to dividends until the shares are exercised. Employees are

wide investment powers in the hands of the Trustee, who has full

required to remain in employment with the Group, or have left

power to distribute the assets as it deems fit to the Beneficiaries.

in accordance with the ‘good leaver’ provisions until exercise,

The Trust was established to allow for the participation of any

employees the Company issues shares held in trust by the

Inland Revenue approved or unapproved share schemes to

Billington Holdings ESOT.

otherwise the awards lapse. On exercise of the options by the

employees of the Group.

Administration costs amounted to £1,000 during the year (2018:

for those employees who are key to the operations of the Company.

In addition, one of the schemes provides additional remuneration

£14,000).

Vesting of the options for this scheme is also conditional on

meeting agreed growth targets (non-market performance

As of 31 December 2019, the Trust held 869,827 (2018: 893,719)

conditions).

ordinary shares of 10p each in the capital of the company (6.72%

of the allotted share capital (2018: 6.91%)). The market value of the

shares in the ESOT Trusts at 31 December 2019 was £3,151,557

(2018: £2,413,041).

Notes forming part of the Group financial statements for the year ended
31 December 2019 Continued

Brought forward at 1 January

Granted

Exercised

Lapsed

Outstanding at 31 December

Number of shares

Weighted average exercise price

2019
No.

281,104

198,463

(50,000)

(4,862)

424,705

2018
No.

270,203

12,401

–

(1,500)

281,104

2019
£

2.63

–

1.65

0.62

1.54

2018
£

2.75

–

3.03

2.63

The Company is unable to directly measure the fair value of employee services received. Instead the fair value of the share options

granted during the year is determined using the Black-Scholes model. The model is internationally recognised as being appropriate to

value employee share schemes similar to this scheme. The following inputs were used:

Date of grant

Share price at date of grant

Weighted average exercise price

Expected volatility

Expected dividends

Risk free rate

Expected option life

18 January 2016

19 August 2019

303p

263p

25.0%

Nil

1.5%

290p

Nil

n/a

Nil

n/a

3 years

The underlying volatility was determined by reference to historical data of the Company’s shares over a period of time since its flotation.

No special features inherent to the options granted were incorporated into measurement of fair value.

The total charge for the year was £97,000 (2018: £84,000).

11. Inventories and work in progress

Raw materials

Work in progress

2019
£’000

664

7,678

8,342

2018
£’000

887

11,124

12,011

Raw materials and consumables recognised as an expense in the Income Statement for the year ended 31 December 2019 totalled

£73,910,000 (2018: £49,826,000).

The provision against the value of inventories at the balance sheet date was £65,000 (2018: £100,000).

No reversal of previous write-downs was recognised as a reduction of expense in 2019 or 2018. None of the inventories are pledged as

securities for liabilities.

12. Trade and other receivables

Amounts due from structural steel customers:

Trade receivables

Retentions due within one year

Retentions due after one year

Total

Other receivables

Prepayments and accrued income

2019
£’000

2,904

3,110

254

6,268

997

2018
£’000

4,780

1,560

410

6,750

212

565

7,350

7,527

All of the Group’s trade and other receivables have been reviewed for indicators of impairment. Certain trade receivables were found to be

impaired and a loss allowance for lifetime credit losses of £501,000 (2018: £519,000) has been recorded accordingly. The amount charged
to the consolidated income statement for the year in relation to expected credit losses was £227,000 (2018: £53,000).

Movement in the expected lifetime credit losses for trade receivables

Balance at 1 January

Impairment loss

Receivables written off during the year

Balance at 31 December

13. Trade and other payables

Trade payables

Financial Instruments (note 17)

Social security and other taxes

Other payables

Accruals

2019
£’000

519

(20)

501

2018
£’000

538

(117)

519

2019
£’000

2018
£’000

15,248

14,921

–

2,097

108

1,980

831

734

143

2,103

19,433

18,732

2019 revenues relating to
structural steel activities are at
a record level. This we believe
highlights the efforts made
by all involved in transitioning
Billington to become a leader
in its field and ensuring that it
is at the forefront of technical
innovation.

The Glass Works, Barnsley

Notes forming part of the Group financial statements for the year ended
31 December 2019 Continued

14. Long term borrowings

Property loans (note 15)

15. Property loans

Loans at commercial rates

Due within one year

Repayable within five years

2019
£’000

1,500

2018
£’000

1,750

2019
£’000

1,500

–

1,500

2018
£’000

250

1,500

1,750

The bank loan is secured by way of first legal mortgage over certain freehold properties of the Group. The loan is for a three year term

and interest is payable at 1.75% over bank base rate.

16. Deferred tax (liability)/asset

Deferred tax provided in the financial statements is set out below and is calculated using a tax rate of 17% (2018: 17%).

2019
£’000

2018
£’000

316

(117)

199

(167)

366

199

206

110

316

(32)

348

316

(375)

(277)

(176)

Deferred tax asset recognised in income statement

At 1 January

Charged in the year

At 31 December

Accelerated capital allowances

Other temporary differences

Deferred tax liability recognised in other comprehensive income

Pension surplus

Total deferred tax (liability)/asset

The recoverability of the deferred tax asset is dependent on future taxable profits. Group companies are budgeted to make profits in the

next few years which supports the recognition of these assets. There are no unrecognised deferred tax assets.

Movements on the deferred tax asset relating to the pension asset (see statement of comprehensive income) are recognised directly in

equity. All other deferred tax movements are recognised in the income statement.

The Government announced in March 2012 a reduction in the rate of corporation tax to 24% with effect from 1 April 2012, with further

reductions of 1% each year to 20% by 1 April 2016. At the Summer Budget 2015, the Government announced legislation setting the

Corporation Tax main rate at 19% for the years starting 1 April 2017, 2018 and 2019 and 17% for the year starting 1 April 2020.

17. Financial assets and liabilities

Categories of financial assets and financial liabilities
The accounting policies for each category of financial assets and financial liabilities, and a description of each, can be found in the

accounting policies. The carrying amounts of financial assets and financial liabilities in each category are as follows:

31 December 2019

Current financial assets

Trade and other receivables

Cash and cash equivalents

Liabilities

Trade and other payables

Lease liabilities

Current borrowings

31 December 2018

Current financial assets

Trade and other receivables

Cash and cash equivalents

Liabilities

Trade and other payables

Derivative financial instruments

Non-current borrowings

Current borrowings

Amortised cost
£’000

FVTPL
£’000

Derivatives
used for
hedging (FV)
£’000

6,353

17,856

24,209

15,356

116

1,500

16,972

–

Amortised cost
£’000

FVTPL
£’000

Derivatives
used for
hedging (FV)
£’000

6,962

9,311

16,273

15,064

–

1,500

250

16,814

–

831

–

831

Total
£’000

6,353

17,856

24,209

15,356

116

1,500

16,972

Total
£’000

6,962

9,311

16,273

15,064

831

1,500

250

17,645

Notes forming part of the Group financial statements for the year ended
31 December 2019 Continued
Derivative financial instruments
The Group’s derivative financial instruments are measured at fair value and are summarised below:

Foreign currency flexi-forward contracts - cash flow hedge

Derivative financial liabilities

2019
£’000

–

2018
£’000

(831)

The Group uses certain derivative financial instruments to mitigate
foreign exchange rate exposure arising from forecast sales in
Euros. The Group’s policy is to hedge 100% of all contracted future
sales in Euros.

During the current period all flexi forward contracts have matured.

All derivative financial instruments used for hedge accounting are
recognised initially at fair value and reported subsequently at fair
value in the statement of financial position.

Hedge effectiveness is determined at inception of the hedge
relationship and at every reporting period end through the
assessment of the hedged items and hedging instruments to
determine whether there is still an economic relationship between
the two.

To the extent that the hedge is effective, changes in the fair value of
derivatives designated as hedging instruments in cash flow hedges
are recognised in other comprehensive income and included within
the cash flow hedge reserve in equity. Any ineffectiveness in the
hedge relationship is recognised immediately in profit or loss.

The critical terms of the foreign currency flexi-forward contracts
entered into exactly match the terms of the hedged items. As such
the economic relationship and hedge effectiveness are based on
the qualitative factors and the use of a hypothetical derivative
where appropriate.

At the time the hedged item affects profit or loss, any gain or
loss previously recognised in other comprehensive income is
reclassified from equity to profit or loss and presented as a
reclassification adjustment within other comprehensive income.

Hedge ineffectiveness may arise where the critical terms of
the forecast transaction no longer meet those of the hedging
instrument, for example if there was a change in the timing of
the forecast sales transactions from what was initially estimated
or if the volume of currency in the hedged items was below
expectations leading to over-hedging.

If a forecast transaction is no longer expected to occur, any net
related gain or loss recognised in other comprehensive income
is transferred immediately to profit or loss. If the hedging
relationship ceases to meet the effectiveness conditions, hedge
accounting is discontinued, and the related gain or loss is held in
the equity reserve until the forecast transaction occurs.

The hedged items and the hedging instruments are denominated
in the same currency and as a result the hedging ratio is always
one to one.

During 2019 a gain of £831,000 (2018: loss of £831,000) was
recognised in other comprehensive income.

All foreign currency flexi-forward contracts held at the previous
balance sheet date were taken out during the period and have
been designated as hedging instruments in cash flow hedges
under IFRS 9. At the 31 December 2018 reporting date all hedging
relationships continue to meet the criteria for hedge relationships
and as such are regarded as continuing hedging relationships.

A gain of £14,000 (2018: £nil) was recorded for hedge
ineffectiveness during the period.

The effect of hedge accounting on the Group’s financial position
and performance is as follows, including the outline timing and
profile of the hedging instruments:

Carrying amount: EUR flexi-forward contracts

Notional amount: EUR flexi-forward contracts

Hedge ratio

Maturity date

Average forward rate: EUR flexi-forward contracts

Change in the fair value of the currency forward: EUR flexi-forward contracts

2019
£

2018
£

–

(831,000)

n/a

32,000,000

1:1

March to
December
2019

n/a

1.1419

831,000

(831,000)

Change in the fair value of the hedged item used to determine hedge effectiveness: EUR contracted sales

831,000

(831,000)

Amounts in the cash flow hedge reserve: EUR flexi-forward contracts

–

(831,000)

The hedge relationships relate to the foreign exchange risk arising
from contracted sales and the resulting receivable. Reclassification
to profit and loss occurs at the time of the associated sale being
recognised and then further movements to profit and loss to
match the retranslation of the associated receivable. The above
movements relating to the hedging instrument and hedged item
exclude those elements reclassified by the reporting date. No
amounts were reclassified during the financial period.

The potential sources of ineffectiveness include (a) differences
between the timing of the cash flows of the hedged item and
hedging instrument (b) changes in credit risk of the hedging
instrument (c) potential over-hedging should volumes of highly
probable sales fall below hedged amounts.

Due to the use of flexible forward contracts, the small differences
in timing are not considered to give rise to any significant
ineffectiveness. No ineffectiveness has arisen from credit risk and
a gain of £14,000 arose as a result of over-hedging.

Foreign currency sensitivity

Most of the Group’s transactions are carried out in GBP. Exposures

to currency exchange rates arise from the Group’s overseas sales

and purchases, which are primarily denominated in Euros.

To mitigate the Group’s exposure to foreign currency risk, non-GBP

cash flows are monitored and forward exchange contracts are

entered into in accordance with the Group’s risk management

policies. Generally, the Group’s risk management procedures

distinguish short-term foreign currency cash flows (due within

six months) from longer-term cash flows (due after six months).

Where the amounts to be paid and received in a specific currency

are expected to largely offset one another, no further hedging

activity is undertaken. Forward exchange contracts are mainly

entered into for significant long-term foreign currency exposures

that are not expected to be offset by other same-currency

transactions. Hedge accounting disclosures are included above.

Financial instruments risk
Risk management objectives and policies

The Group is exposed to various risks in relation to financial

instruments. The main types of risks are foreign currency risk,

market risk, credit risk and liquidity risk.

The Group’s risk management is coordinated at its headquarters,

in close cooperation with the board of directors, and focuses on

actively securing the Group’s short to medium-term cash flows by

minimising the exposure to volatile financial markets. Long-term

financial investments are managed to generate lasting returns.

The Group does not actively engage in the trading of financial

assets for speculative purposes nor does it write options. The

most significant financial risks to which the Group is exposed are

described below.

The Group enters into derivatives, principally for hedging foreign

exchange risk. Associated disclosures relating to hedge accounting

are included above.

Market risk analysis
The Group is exposed to market risk through its use of financial

instruments and specifically to currency risk and interest rate risk,

which result from both its operating and investing activities.

At the balance sheet date, there were no contracted non-GBP

sales. Therefore, there was no exposure to currency risk or

sensitivity of profit and equity in regard to the exchange rate.

Interest rate sensitivity

The Group’s policy is to minimise interest rate cash flow risk

exposures on long-term financing where commercially viable. At

31 December 2019, the Group is exposed to changes in market

interest rates through bank borrowings at variable interest rates.

The exposure to interest rates for the Group’s money market funds

is considered immaterial.

The following table illustrates the sensitivity of profit and equity

to a reasonably possible change in interest rates of +/- 1%

(2018: +/- 1%). These changes are considered to be reasonably

possible based on observation of current market conditions. The

calculations are based on a change in the average market interest

rate for each period, and the financial instruments held at each

reporting date that are sensitive to changes in interest rates. All

other variables are held constant.

31 December 2019

31 December 2018

Profit for the year

Equity

+1%

(15)

(17)

-1%

+1%

-1%

–

Credit risk analysis
Credit risk is the risk that a counterparty fails to discharge an
obligation to the Group. The group is exposed to credit risk from
financial assets including cash and cash equivalents held at banks,
trade and other receivables.

Credit risk management
The credit risk is managed on a group basis based on the Group’s
credit risk management policies and procedure.

The credit risk in respect of cash balances held with banks and
deposits with banks are managed via diversification of bank
deposits, and are only with major reputable financial institutions.

Notes forming part of the Group financial statements for the year ended
31 December 2019 Continued

The Group continuously monitors the credit quality of customers

In measuring the expected credit losses, the trade receivables

based on a credit rating scorecard. Where available, credit

have been assessed on a collective basis as they possess shared

insurance is obtained on all customers across the Group. External

credit risk characteristics. They have been grouped based on the

credit ratings and/or reports on customers are also obtained

days past due and also according to the geographical location of

and used. The Group’s policy is to deal only with credit worthy

customers.

counterparties. Where credit insurance is not obtainable for a

specific customer, trade is only permissible following director

The expected loss rates are based on the payment profile for sales

approval. Exposure is monitored on an ongoing basis. The credit

over the past 48 months before 31 December 2019 and 1 January

terms range between 30 and 90 days. The credit terms for

respectively as well as the corresponding historical credit losses

customers as negotiated with customers are subject to an internal

during that period. The historical rates are adjusted to reflect

approval process which considers the credit rating scorecard. The

current and forwarding looking macroeconomic factors affecting

ongoing credit risk is managed through regular review of ageing

the customer’s ability to settle the amount outstanding. The Group

analysis, together with credit limits per customer.

has identified gross domestic product (GDP) and unemployment

Security

rates of the countries in which the customers are domiciled to

be the most relevant factors and according adjusts historical

Trade receivables consist of a large number of customers in

loss rates for expected changes in these factors. However given

various industries, predominantly although not exclusively

the short period exposed to credit risk, the impact of these

construction, and geographical areas. The Group does not hold any

macroeconomic factors has not been considered significant within

security on the trade receivables balance.

the reporting period.

In addition, the group does not hold collateral relating to other

Trade receivables are written off (ie derecognised) when there is

financial assets (eg derivative assets, cash and cash equivalents

no reasonable expectation of recovery. Failure to make payments

held with banks).

Trade receivables

within 180 days from the invoice date and failure to engage with the

Group on alternative payment arrangement amongst others are

considered indicators of no reasonable expectation of recovery.

The Group applies the IFRS 9 simplified model of recognising

lifetime expected credit losses for all trade receivables as these

On the above basis the expected credit loss for trade receivables as

items do not have a significant financing component.

at 31 December 2019 was determined as follows:

Expected credit rate loss

Gross carrying amount

Lifetime expected credit loss

Trade receivables days past due

Current

More than 30 days

More than 60 days

More than 90 days

2,048

139

21%

970

201

37%

137

44%

251

110

Total

–

3,406

501

The closing balance of the of the trade receivables loss allowance as at 31 December 2019 reconciles with the trade receivables loss

allowance opening balance as follows:

Opening loss allowance as at 1 January 2019

Loss allowance recognised during the year

Receivables written off during the year

Loss allowance as at 31 December 2019

£‘000

519

(49)

501

Liquidity risk
As at 31 December 2019 the Group’s financial liabilities have contractual maturities which are summarised below:

31 December 2019

Trade payables

Other payables

Lease liabilities

Property loans

Current within 6 months
£’000

Current 6 to 12 months
£’000

Between 1 and 3 years
£’000

15,248

108

125

15,559

–

1,375

1,402

–

This compares to the maturity of financial liabilities for the Group in the previous reporting period which was as follows:

31 December 2018

Trade payables

Other payables

Property loans

Current within 6 months
£’000

Current 6 to 12 months
£’000

Between 1 and 3 years
£’000

14,921

974

125

16,020

–

125

–

1,500

Liquidity risk is the risk that the Group might be unable to meet

borrowing facilities in order to determine headroom or any

its obligations. The Group manages its liquidity needs through

shortfalls. Management believe that levels of cash reserves and

the close control, monitoring and forecasting of cash inflows and

available headroom are sufficient to meet the Group’s needs over

cash outflows. Net cash requirements are compared to available

its forecast period.

18. Equity

Called up share capital

Authorised

Ordinary shares of 10p each

Allotted and fully paid

Ordinary shares of 10p each

“A” ordinary shares of 10p each

2019

2018

No. of shares

£’000

No. of shares

£’000

27,500,000

2,750

27,500,000

2,750

12,860,959

1,286

12,860,959

1,286

73,368

12,934,327

1,293

12,934,327

1,293

During the year no “A” ordinary shares were converted into ordinary shares (2018 - none).

Both classes of share rank pari passu in all respects.

Details of company share options outstanding at 31 December 2019 and treasury shares held by the ESOT are given in note 10.

Notes forming part of the Group financial statements for the year ended 31 December 2019 Continued

The details of other components of equity are as follows:

Other components of equity

At 1 January 2018

Cash flow hedges:

current year losses

At 31 December 2018

At 1 January 2019

ESOP movement in year

Cash flow hedges:

current year gains

At 31 December 2019

ESOT
£’000

(844)

–

(844)

–

(820)

Cash flow
hedges
£’000

–

(831)

–

831

–

19. Ultimate controlling related party

At the year end, the directors considered that the Company had no ultimate controlling party.

20. Leases

The balance sheet shows the following amounts relating to leases:

Right of use assets included within property, plant and equipment

Property

Cars

Lease liabilities

Current

Non current

Total
£’000

(844)

(831)

(1,675)

831

(820)

2018
£’000

–

2018
£’000

–

2019
£’000

114

2019
£’000

105

116

There were no additions to right of use assets during the year other than on transition to IFRS 16.

The Group leases one property and various cars. The property lease is due to expire within one year and all car leases are due to expire with two
years and are expected to be replaced by the Group by purchase of assets rather than leasing. The Group is not exposed to any significant future
cash outflows that are not reflected in the measurement of the lease liabilities. The lease agreements do not impose any covenants.

The statement of profit or loss shows the following amounts relating to leases:

Depreciation of right of use assets

Property

Cars

Interest expense

Expense relating to short term leases

The total cash outflow for leases for the period was £216,000.

2019
£’000

2018
£’000

–

21. Retirement benefits

The Group operates funded pension schemes for certain
employees and directors. The total contributions to all pensions by
the Group for the year was £500,000 (2018: £441,000).

Defined contribution schemes accounted for £500,000 (2018:
£441,000) of this amount with £nil (2018: £nil) relating to a defined
benefit scheme, where the benefits are based on final pensionable
pay.

The defined benefit scheme is legally separated from the Group
and is managed by a board of trustees. The board of trustees
of the scheme is required by its articles of association to act in
the best interest of the fund and is responsible for setting the
investment policies. The Group is represented on the board of
trustees by employer nominated and appointed trustees.

The pension costs relating to the defined benefit scheme are
assessed in accordance with the advice of an independent qualified
actuary using the projected unit credit method of valuation. The
latest actuarial valuation of the Group’s pension scheme was
carried out as at 31 March 2017 (approved 8 January 2018).

In accordance with the terms of the recovery plan dated 8 January
2018 the Group expects to contribute £nil to the defined benefit
pension scheme in the year ending 31 December 2019. The
next scheme funding actuarial valuation is due as at 31 March
2020. Any recovery plan, should this be required, and schedule of
contributions will be reviewed at this date.

The scheme was closed to future accrual at 1 July 2011 and any
remaining surplus upon satisfaction of all scheme liabilities is
returnable to the Group.

The scheme exposes the Group to actuarial risk such as interest
rate risk, investment risk, longevity risk and inflation risk:

Value of scheme assets

Interest rate risk
The present value of the defined benefit liabilities is calculated
using a discount rate determined by reference to market yields
of high quality corporate bonds. The estimated term of the bonds
is consistent with the estimated term of the defined benefit
obligation.

A decrease in market yield on high quality corporate bonds
will increase the value of the scheme’s liabilities, although it is
expected that this would be offset partially by an increase in the
fair value of certain of the plan assets.

Investment risk
The plan assets at 31 December 2019 are held predominantly in
equity and debt instruments. The fair value of the equity assets
is exposed to the risks of movements in UK and Overseas equity
markets.

Longevity risk
The Group is required to provide benefits for life for the members
of the scheme. The liabilities of the scheme are sensitive to
unexpected changes in future mortality.

Inflation risk
Elements of the pensions in payment under the scheme are
linked to inflation. An increase in the inflation rate would increase
the value placed on the liability. A portion of the plan assets are
inflation-linked debt securities which will mitigate some of the

effects of inflation.

Equities

Overseas

Bonds

UK Government

UK Corporate

Equity-linked Bonds

Cash

Other

Total market value of assets

Present value of scheme liabilities

Surplus in the scheme

Related deferred tax liability

Net pension asset

Value at 31 December

2019
£’000

2018
£’000

2017
£’000

–

365

–

459

3,338

1,998

2,058

–

2,482

3,077

3,487

2,701

8,552

2,324

7,797

2,451

8,515

(6,347)

(6,167)

(6,317)

2,205

(375)

1,830

1,630

(277)

1,353

2,198

(374)

1,824

Notes forming part of the Group financial statements for the year ended
31 December 2019 Continued

A reconciliation of the defined benefit obligation and plan assets to the amounts presented in the balance sheet for each
of the reporting periods is presented below:

Defined benefit obligation

Fair value of plan assets

Analysis of the amount charged to other finance income:

Interest income

Interest on pension scheme liabilities

Past service cost (including curtailments)

Administration cost

Total income recognised in profit or loss

Past service cost relates to the provision made to cover the equalisation of GMP.

Analysis of amount recognised in statement of comprehensive income:

Return on plan assets (excluding amounts included in net interest)

Actuarial (gains) / losses from changes in financial assumptions

Actuarial gains from changes in demographic assumptions

Actuarial losses from experience differing from that assumed

Total income recognised in other comprehensive income

Movements in the fair value of plan assets

At 1 January

Interest income

Return on plan assets (excluding amounts included in net interest)

Contributions

Benefits paid

Administration costs

At 31 December

Movements in the defined benefit obligation

At 1 January

Past service cost

Interest cost

Remeasurement - actuarial (gains) / losses from changes in financial assumptions

Remeasurement - actuarial losses from changes in demographic assumptions

Remeasurement - experience differing from that assumed

Benefits paid

At 31 December

2019
£’000

2018
£’000

(6,347)

(6,167)

8,552

2,205

205

(161)

–

(50)

(6)

979

(526)

128

–

581

2019
£’000

7,797

205

979

–

(379)

(50)

8,552

7,797

1,630

202

(149)

(61)

(28)

(36)

(695)

253

(128)

(532)

2018
£’000

8,515

202

(695)

–

(197)

(28)

7,797

2019
£’000

2018
£’000

(6,167)

(6,317)

–

(161)

(526)

128

–

379

(61)

(149)

253

(128)

197

(6,347)

(6,167)

The assumptions adopted for the scheme valuation were developed by Group management with the advice of an independent actuary.

These assumptions are based on current actuarial benchmarks, management’s historical experience and by reference to market yields

on corporate bonds.

The significant actuarial assumptions used for the valuation are as follows:

Actuarial assumptions

Rate of increase in pensionable salaries

Rate of increase in pensions in payment

Discount rate

Inflation assumption

2019
%

2018
%

2017
%

2.5

2.7

1.9

2.7

3.2

3.1

2.7

3.2

3.1

2.4

3.2

The mortality assumption adopted for the purposes of the calculations as at 31 December 2019 is as follows:

•

Base table: S2PxA tables, year of birth

Future mortality improvements: CMI 2018 mortality projection model at 1.5% per annum.

Average life expectancies – Billington Scheme

Male retiring at reporting date at age 62 (in years)

Male retiring at reporting date +20 years at age 62 (in years)

Female retiring at reporting date at age 62 (in years)

Female retiring at reporting date +20 years at age 62 (in years)

2019

2018

24.4

26.2

26.4

28.3

24.9

26.7

26.9

28.8

Members are assumed to retire at the earliest age at which they can take their full pension unreduced. No allowance is included for

members continuing their benefits at retirement.

The significant actuarial assumptions for the determination of the defined benefit obligation are the discount rate, the rate of inflation and

the average life expectancy. The calculation of the net defined benefit surplus is sensitive to these assumptions.

Changes in the significant actuarial assumptions

0.5% increase to discount rate

0.5% increase in inflation and related assumptions

1 year increase in life expectancy

2019
£’000

(444)

317

190

2018
£’000

(432)

308

185

The above shows the impact on the defined benefit obligation if the assumptions were changed as shown (assuming all other

assumptions remain constant). This sensitivity analysis may not be representative of the actual change in the defined benefit obligation as

it is unlikely that the change in the assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Notes forming part of the Group financial statements for the year ended
31 December 2019 Continued

22. Related party transactions

No transactions took place with any companies with which the Group has common directors during the year. There were no outstanding

balances with any such related parties at either the opening or closing balance sheet dates.

23. Joint ventures

The Group’s investment in joint ventures relates to an equal shareholding of £1 held in BS2 (2011) Limited which was incorporated on

23 February 2011. The principal activity of BS2 (2011) Limited is that of design engineering, fabrication and construction of structural

steelwork and commenced trading on 1 November 2011.

The joint venture has been accounted for in the Group accounts using the equity accounting method.

The Group’s share of transactions and balances with BS2 (2011) Limited as at 31 December 2019 were as follows:

The Group’s share of transactions and balances with BS2 (2011) Limited

Share of revenue

Share of profit before taxation

Share of profit after taxation

Share of current assets

Share of liabilities due within one year

24. Reconciliation of net cash flow to movement in net cash

At 1 January 2018

Cash flow

At 31 December 2018

Cash flow

At 31 December 2019

Cash and cash equivalents
£’000

Property loans
£’000

8,063

1,248

9,311

8,545

17,856

(2,004)

254

(1,750)

250

(1,500)

£’000

–

Net cash
£’000

6,059

1,502

7,561

8,795

16,356

Balmoral Tanks, Norfolk

The defined benefit pension scheme performed
well in the period despite a backdrop of
continued volatility in the equity market.

Circle Square, Manchester

Parent company statement of financial
position as at 31 December 2019

Note

2019

2018

£’000

Fixed assets

Tangible assets

Investments

Current assets

Debtors falling due within one year

Cash at bank and in hand

1,136

17,854

18,990

Creditors: amounts falling due within one year

(15,671)

Net current assets

Total assets less current liabilities

Creditors: amounts falling due after more than one year

Capital and reserves

Called up share capital

Share premium

Capital redemption reserve

Other reserve

Retained earnings

Shareholders’ funds

8,542

570

9,112

3,319

12,431

–

12,431

1,293

1,864

132

(820)

9,962

12,431

1,286

9,310

10,596

(4,364)

8,628

570

9,198

6,232

15,430

(1,500)

13,930

1,293

1,864

132

(844)

11,485

13,930

The parent company has taken advantage of Section 408 of the Companies Act 2006 and has not included its own profit and loss account

in these financial statements.

The loss after taxation and receipt of dividends of the company for the year was £6,000 (2018: profit of £2,948,000).

The parent company financial statements were approved and authorised for issue by the Board of Directors on 20 April 2020.

Ian Lawson

Non executive Chairman

Trevor Taylor

Chief Financial Officer

The notes 1 to 21 form part of these parent company financial statements.

Parent company statement of
changes in equity for the year ended
31 December 2019

Share capital
£’000

Share
premium
account
£’000

Capital
redemption
reserve
£’000

Other reserve
- ESOT
£’000

Accumulated
profits
£’000

At 1 January 2018

Profit for the financial year

Credit relating to equity-settled share-based
payments

Dividends

At 31 December 2018

1,293

1,864

132

(844)

–

1,293

1,864

132

(844)

9,875

2,948

(1,385)

11,485

Share capital
£’000

Share
premium
account
£’000

Capital
redemption
reserve
£’000

Other reserve
- ESOT
£’000

Accumulated
profits
£’000

At 1 January 2019

ESOT movement in year

Loss for the financial year

Credit relating to equity-settled share-based
payments

Dividends

At 31 December 2019

1,293

1,864

132

–

(844

–

1,293

1,864

132

(820)

11,485

(24)

(6)

(1,565)

9,992

The notes 1 to 21 form part of these parent company financial statements.

Total
equity
£’000

12,320

2,948

(1,385)

13,930

Total
equity
£’000

13,930

–

(6)

(1,565)

12,431

Edinburgh Airport

Notes forming part of the parent
company financial statements for the
year ended 31 December 2019

1. Company information

4. Accounting Policies

Billington Holdings Plc is a company domiciled in England and

Wales, registration number 02402219. The registered office is

Basis of preparation of financial statements
The financial statements have been prepared on the historical cost

Barnsley Road, Barnsley, S73 8DS.

basis. The presentation currency is Sterling (£).

The company is a holding company providing management

services to its subsidiaries.

2. Compliance with Accounting

Standards

These financial statements have been prepared in accordance

with applicable United Kingdom accounting standards, including

Financial Reporting Standard 102 - ‘The Financial Reporting

Standard applicable in the United Kingdom and Republic of

Ireland’ (‘FRS 102’), and with the Companies Act 2006.

The individual accounts of Billington Holdings Plc have also

adopted the following disclosure exemptions:

•

the requirement to present a statement of cash flows and

related notes.

•

key management personnel

certain financial instruments

3. Significant judgements and

estimates

Preparation of the financial statements requires management

to make significant judgements and estimates. The items in the

financial statements where these judgements and estimates have
been made include:

Impairment of assets
Management determine whether there are indications of

Going concern
The consolidated financial statements have been prepared on

a going concern basis. The directors have taken note of the

guidance issued by the Financial Reporting Council on Going

Concern Assessments in determining that this is the appropriate

basis of preparation of the financial statements and have

considered a number of factors.

The financial position of the Group, its record trading performance

in 2019 and cash flows are detailed in the Financial Review and

they demonstrate the robust position of the Group heading into

2020.

The Group has a gross cash balance of £17.9 million at 31

December 2019 and no significant long-term borrowings or

commitments. At the end of March 2020 the Group had a gross

cash balance of £13.0 million and during March 2020 the Group

have secured a 12 month overdraft facility of £3 million, giving the

Group available cash to utilise of £16.0 million.

The directors have prepared forecasts covering the period to April

2021 and approved by the Board in March 2020. The forecasts

reflect the exceptional nature of the 2019 trading performance

and the current political and economic uncertainty and pricing

pressures in the structural steel market, excluding the potential

impact of Covid-19 which is considered below.

The uncertainty as to the future impact on the Group of the recent

Covid-19 outbreak has been separately considered as part of the

directors’ consideration of the going concern basis of preparation.

The directors put in a place many positive preventative measures

impairment of the Company’s tangible assets. Factors taken into

at an early stage in the outbreak in response to Covid-19 to

consideration in reaching such a decision include the economic

minimise the potential impact. Thus far, the measures have been

viability and expected future financial performance of the asset.

effective.

Estimation uncertainty
When preparing the financial statements management undertakes

a number of judgements, estimates and assumptions about

recognition and measurement of assets, liabilities, income and

expenses. The actual results may differ from the judgements,

estimates and assumptions made by management, and will

seldom equal the estimated results.