Annual Report &
Financial Statements
YEAR ENDED 31 DECEMBER 2021
STEAMhouse - photo courtesy of Bowmer + Kirkland Ltd
CONTENTS
01
Chairman’s Statement
03 Operational Review
09
Financial Review
14
Board Profile and Registered Office
16
Report of the Directors
19
Strategic Report
21
Sustainable and Responsible Business
25 Governance Report
27
Independent Auditor’s Report
37
Consolidated Income Statement
38 Consolidated Statement of Comprehensive Income
39 Consolidated Statement of Financial Position
40 Consolidated Statement of Changes in Equity
41
Consolidated Cash Flow Statement
43
Principal Accounting Policies
51
Notes Forming Part of The Group Financial Statements
71
Parent Company Statement of Financial Position
72
Parent Company Statement of Changes in Equity
73 Notes Forming Part of the Parent Company Financial Statements
CHAIRMAN’S STATEMENT
2021 was a year of partial recovery as activity started to return, although significant
impacts from the Covid-19 pandemic continued to be experienced and challenges
such as substantial increases in steel prices were encountered. Margin pressure
remained across the industry with material price increases and the availability of
certain products and labour arising throughout the period. However, as with 2020,
Billington remained profitable in 2021 and with our strong balance sheet we are well
placed to take advantage of future market recovery.
In 2021 revenue increased by 25.3 per cent to £82.7
million (2020: £66.0 million) with underlying profit before
tax decreasing by 23.5 per cent to £1.3 million (2020:
£1.7 million). The overall underlying Earnings Per Share
(“EPS”) for the year amounted to 8.1 pence (0.6 pence
after impairment charge) compared with 11.3 pence in
2020, a 28.3 per cent decrease. However, our balance
sheet remained strong with Net Assets of £29.4 million at
31 December 2021 (2020: £29.2 million), with a continuing
strong gross cash balance of £10.4 million at 31 December
2021 (2020: £15.1 million), despite higher than historic
levels of inventory and contract work in progress at
the year end, partially as a result of forward buying raw
materials to mitigate market price increases.
Billington Structures entered 2021 with a strong order
book, although business was heavily impacted by
steel price increases and the results depressed by
lower margin projects. The second half of the year
was particularly challenging to manage as previously
delayed projects commenced. However, the structures
businesses navigated well through these issues and
the prospects for 2022 are more encouraging, with
a number of higher margin projects expected. The
conscious decision to take delivery of a large quantity
of steel prior to the year year-end was to secure supply
and ensure margin preservation on secured contracts.
It is anticipated that the usage of the high steel stock
levels at the year end will be consumed by the end of Q1
2022 leading to a return to historic levels of inventory and
contract work in progress.
Peter Marshall Steel Stairs continued the strong
performance seen in 2020 into 2021, recording record
revenues for the year. Whilst the business was impacted
by steel price increases, it retained robust margins, which
were not as heavily impacted as those in the Group’s
other structural steel businesses. It currently enjoys a
strong order book with significant prospects to secure
further business.
The Easi-Edge perimeter edge protection and fall
prevention business continued to suffer from Covid-19
related delays to the start of projects and a subdued
commercial office market, although it remained a
significant contributor to Group profits. Easi-Edge
continues to see good opportunities and continues
to innovate. The Group invested significantly in the
business prior to the pandemic and it is well placed to
take advantage of future market recovery.
Hoard-it enjoyed a strong 2021 operating at full capacity
for much of the year, as projects resumed following
the delays experienced in 2020 due to the Covid-19
pandemic. The positive momentum experienced in 2021
has continued into the current year with a good pipeline
of new business for 2022.
The onset of the conflict in Ukraine has recently
presented new challenges in our industry. Significant
volumes of steel products originate in Russia and
Ukraine and with supplies restricted from these regions,
shortages, and as a consequence price increases have
been noted for some of the Group’s raw materials.
Alternative sources for these products have been
sourced and supply constraints are anticipated to ease as
we progress through 2022.
Despite the challenges faced over the last two years,
Billington remains a robust and profitable business,
supported by a healthy balance sheet and a committed
workforce. The Group is well placed to take advantage
of the significant number of opportunities at improving
margin levels that are currently being presented.
Pension Scheme
The defined benefit pension scheme (closed to future
accrual in 2011) continues in surplus despite the
continuing impact of the pandemic on equity markets.
At 31 December 2021 a surplus of £2,673,000 (2020:
£1,683,000) along with a corresponding deferred tax
liability of £668,000, has resulted in a net recognised
surplus of £2,005,000 (2020: £1,363,000).
The last actuarial valuation which also showed the
scheme in surplus was undertaken as at 31 March 2020
and the next scheme funding actuarial valuation is due as
at 31 March 2023, at which time the need for any Group
contributions will be reviewed.
Dividend
In the first half of 2021 Billington resumed the payment
of dividends with the declaration of a final dividend in
relation to the year ended 31 December 2020 of 4.25
pence per share amounting to £550,000, which was 2.66
times covered by 2020 earnings. The Board feels it is
appropriate for Billington to continue dividend payments,
albeit at a modest level, whilst the impact of Covid-19
continues and markets remain challenging. The Board
is therefore recommending a final dividend of 3.00
However, these forecasts are likely to be subject to
revision as the pace of the recovery from the impact of
Covid-19 and the impact of wider macroeconomic factors
are assessed.
In addition to the demand issues caused by the
pandemic, the Group has faced further significant
increases in structural steel costs during the year, a
Europe wide issue. Whilst iron ore prices ended the
year below the level at the beginning of 2021 there was
considerable volatility during the period, with the intra
year high being nearly three times that of the low point,
and increasing energy costs have also had a larger
consequential impact on the price of steel.
Whilst the Group operates many fixed price supply
contracts and has arrangements in place to mitigate most
of the increases in steel prices, including the forward
purchasing of steel where appropriate, escalation in
the costs of consumables and ancillary products are
not normally able to be passed on. Steel prices remain
volatile and increasing energy costs coupled with
government infrastructure based stimulus packages
across the globe, and the development of HS2 in the
UK, are providing further inflationary pressures and are
restricting the supply of certain steel products.
Many of the markets in which Billington operates remain
constrained, with a number of the main construction
contractors continuing under significant pressure as they
deliver contracts that were tendered for some time ago
before the current inflationary pressures materialised.
However, the Group will endeavour to focus on projects
with the more robust larger contractors that can deliver
an appropriate margin and we assess the risks associated
with individual projects on a case-by-case basis. The
Group is also looking at its longer-term steel procurement
strategy in order to reduce its reliance on any one
supplier.
Current Trading and Outlook
The current trading environment continues to be
challenging as we emerge from the global Covid-19
pandemic, particularly in relation to material price
inflation. However, we have seen a continuing recovery
in activity levels and the return of higher margin
opportunities.
We have a robust business that has weathered the
pandemic storm well, supported by a strong balance
sheet and committed workforce. Whilst pricing pressures
and other market challenges remain, I believe Billington is
well placed to deliver improved results in 2022.
Ian Lawson
Non-Executive Chairman
25 April 2022
pence per share for 2021, which is covered 2.7 times
by underlying earnings. The final dividend will be paid,
subject to shareholder approval at the Company’s AGM,
on 4 July 2022, to those shareholders on the register on
6 June 2022. No interim dividend for 2021 was declared
(2020: nil), a policy consistent with prior years.
Liquidity and Capital Reserves
In 2021 the Group experienced a net cash outflow of
£4.7 million (2020: £2.7 million net cash outflow) reducing
the Group’s gross cash and cash equivalents as at 31
December 2021 to £10.4 million from £15.1 million as at
31 December 2020. The cash balance at 31 December
2021 reflected good cash collection and certain modest
customer pre-payments, offset by an increase in
inventories and work in progress by £7.1 million to £12.2
million (31 December 2020 £5.1 million). The increase
in inventories and work in progress at the year end was
reflective of the Group’s planning to mitigate further price
increases and to ensure the availability of materials for
contracted projects in Q1 2022.
Going forward the Group’s cash continues to provide
strong cover for its working capital requirements and a
robust position from which to take the Group forward.
Capital expenditure in 2021 was at a similar level to 2020
and for 2022 is forecast to rise modestly as the Group
continues to invest in process improvements, together
with capability and service enhancements.
Our People
Throughout the Covid-19 pandemic the focus has been
on the welfare and protection of our dedicated workforce
and this has required significant changes to working
practices. The Company has continued to implement
appropriate measures at all our facilities to ensure that
social distancing can be maintained, with the workforce
and our customers protected as far as possible.
At the peak of the pandemic in 2020, 46 per cent of
the workforce were placed on furlough leave. During
the later part of 2020 and into the first half of 2021 the
majority of those previously on furlough returned to work.
The Company took the decision to not claim any further
furlough monies from the UK Government from 1 January
2021.
However, the Group did continue to experience Covid-19
related disruptions to its operations in 2021, with
staff required to isolate, presenting some operational
challenges, particularly in the second half of the year.
I am pleased to say that the workforce rose to meet
these challenges, covering for effected colleagues
where possible, and I would like to place on record my
thanks for the hard work, resilience and dedication of the
Billington team.
Economic Outlook
During 2021 the impact of the Covid-19 pandemic
continued to be a significant factor influencing the timing
and profitability of contracts. We have managed through
these unprecedented times and whilst there inevitably
remains further challenges ahead we sit poised to deliver
on our strategy to drive growth and margin enhancement
in the medium term.
The UK structural steelwork market grew by 16.9 per
cent in 2021, following a 20.0 per cent decline in 2020.
Current forecasts are for the market to continuing
growing with an increase of 10.5 per cent in 2022, before
the level of growth stabilises at 2.1 per cent in 2023.
1
2
OPERATIONAL REVIEW
Noma, 4 Angel Square, Manchester
2021 was a year of further challenge with the Covid-19 pandemic and its effects
continuing to impact the Company. With a partial recovery in activity levels
revenues increased by 25.3 per cent to £82.7 million, however the impact on
margins of raw material price increases and the project mix led to underlying profit
before tax decreasing by 23.5 percent to £1.3 million (£0.2m after impairment
charge). Post period end we resolved that it would be prudent to take an
impairment charge of £1.1 million relating to a client with whom the Company was
completing a contract and who entered administration shortly after the year end.
This event provided further evidence following previous communications prior to
the year end that there was significant uncertainty regarding the recoverability of
the receivable and contract work in progress owed by the client at the balance
sheet date and is therefore considered an adjusted post balance sheet event.
Whilst we have decided to provide for the debt owed we continue in dialogue with
the developer to complete the project and recover the outstanding monies.
That we were able to remain resilient to these challenges and the underlying
business continued to be profitable is a real credit to the dedication of our
workforce and I would like to thank them all for their efforts.
Group Companies
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 75 years, the
business is well recognised and respected in the industry
with the capacity of processing over 50,000 tonnes of
steel per annum.
The Shafton facility operates in two distinct business
areas. The first undertakes activities for Billington
Structures. The second, Shafton Steel Services offers
a complete range of steel profiling services to many
diverse external engineering and construction companies,
providing further opportunities to increase the capacity
of the business as well as allowing for the supply of value
added, complementary products and services to enhance
the comprehensive offering of the Group.
The Group’s structural steel business started 2021 with a
strong order book with further new business won during
the course of the year, although business was heavily
impacted by steel and other material price increases and
the results depressed by lower margin projects. The level
of work undertaken enabled the facilities to be operated
at or near full capacity for much of the period, sub-
contracting production as required to the longstanding,
approved Group supply chain. It is important to the
efficient operation of the structures business that its
facilities remain fully utilised as far as possible. Billington
is not alone in this requirement and the work undertaken
during the year enabled the operation of the facilities to
be as efficient as possible and for the business to be well
positioned for the future, particularly as projects in other
sectors that have been delayed by the pandemic are
restarted.
Many of the projects undertaken in 2021 were in areas
not significantly impacted by the Covid-19 pandemic, such
as large distribution warehouses, which have a larger
steel content per man hour than more complex projects
such as commercial offices, and as such attracted a
lower margin. 2022 has seen the continued growth in
the Company’s order book and provides confidence of
delivering increased value for its shareholders.
The larger projects undertaken by Billington Structures
during 2021 included:
• Newhurst EfW, Leicestershire – Hitachi Zosen Inova
• Sandwell Aquatics Centre, Smethwick – Wates
Construction
• Pinewood Studios, Slough – Sir Robert McAlpine
3
4
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 2021, the business continued to suffer from Covid-19
related delays to the start of projects and a subdued
commercial office market, although it remained a
significant contributor to Group profits. The limited
number of new commercial office developments currently
being undertaken in the UK, in particular has a significant
impact on Easi-Edge as these types of projects require a
greater amount of Easi-Edge product when compared to
most other types of developments, such as distribution
warehouses, undertaken by the business.
However, Easi-Edge continues to see good opportunities,
with utilisation forecast to increase in 2022, although this
is not expected to return to historic levels in the short to
medium term whilst the commercial office market remains
subdued.
Projects undertaken by Easi-Edge in 2021 included:
• Cornbrook Commercial Offices, Manchester – ISG
Construction
• Milburngate, Durham – Tolent Construction
• S1 Kings Cross, London – Elland Steel Structures
The investments made in the business prior to the
pandemic, adding to the stock available for hire, meant
2021, like 2020, was a year of low capital expenditure,
focusing on replacements where required. However,
the business continues to innovate and Easi-Edge’s new
Core Safe product for the protection of lift shafts was
introduced to the market in 2021.
It is pleasing to note that some of the Company’s complex
and challenging projects were again recognised in some
of the industry’s prestigious awards. Sandwell Aquatics
was voted the UK Tekla award winner in the Sports and
Recreation category and Wenlock Works (Shepherdess
Walk) achieved a merit award in the Structural Steel
Design awards.
Billington Structures has a strong order book for 2022
and is seeing additional significant future project
opportunities. This includes more complex projects, such
as fulfilment centres, film studios and renewable energy
infrastructure, at higher margin levels. Whilst the detailed
timing of certain specific projects remains subject to
change, and a number of potentially significant contracts
have yet to be secured, the future prospects for Billington
Structures are encouraging. The Group invested
heavily in stockpiling steel in the later part of 2021 in
order to mitigate against anticipated price increases
and any supply issues for already contracted work. It is
anticipated that this steel will be fully used for projects
in the first quarter of 2022 leading to a return to historic
levels of inventory.
Peter Marshall Steel Stairs
Based in Leeds, Peter Marshall Steel Stairs is a specialist
designer, fabricator and installer of bespoke steel
staircases, balustrade systems and secondary steelwork.
It has the capability to deliver stair structures for the
largest construction projects and operates in sectors
spanning retail, data, commercial offices, education,
healthcare, rail and many more.
Peter Marshall Steel Stairs continued the strong
performance seen in 2020 into 2021, recording record
revenues for the year. Whilst the business was impacted
by steel price increases, it retained robust margins, which
were not as heavily impacted as those in the Group’s
other structural steel businesses.
Notable projects undertaken in 2021 included:
• HH4 Data Centre, Hemel Hempstead – Flynn
Contractors
• Siemens Blade Facility, Hull – J&D Pierce
• 20 Ropemaker Street, London – William Hare
As one of the largest companies in its sector, during
the year the Company received its biggest ever single
order, and enjoys a robust market position, particularly
when viewed against its smaller competitors, in what is
a fragmented market. During 2021 Peter Marshall’s was
often operating at full capacity, sub-contracting work
where appropriate. The Group continues to review
opportunities to increase the capacity of the business
and improve productivity, in what is one of the higher
margin areas of the Group’s structural steel business.
The business entered 2022 with a strong order book and
significant prospects to secure further business.
East Midlands Gateway, Derby
LBA8 Mezzanine, Leeds
Hoard-it
Our People
Hoard-it produces a unique range of re-usable temporary
hoarding solutions which are environmentally sustainable
and available on both a hire and sale basis tailored to the
requirements of its customers.
Hoard-it enjoyed a strong first half of 2021 and an even
stronger second half, operating at full capacity, as
projects resumed following the delays experienced in
2020 due to the Covid-19 pandemic.
Projects were undertaken for both existing and new
customers, as the client base expanded in line with the
goal of ensuring the product is the number one choice
for main contractors and developers in the construction
industry, particularly in the residential construction
market, where Hoard-it’s range of printed boards and
panels are proving attractive to developers looking for
a professional and promotional site image, with added
functionality.
Hoard-it also continued to add to its product offering,
providing additional products used on sites such as
accommodation, trackway, security cameras and graphics.
An expanded graphics solution, Brand-it, was introduced
in the first half of 2021, which is being utilised on both
Hoard-it’s own products and on those produced by others.
Brand-it’s site graphics solutions enable site perimeter
hoarding to be a prime marketing tool with added
functionality such as anti-graffiti and anti-climbing coatings.
Notable projects in 2021 undertaken by Hoard-it
included:
• Various Nightingale Hospital sites
• Pinewood Studios – Sir Robert McAlpine - Slough
• Swindon Radiotherapy Centre – John Sisk - Swindon
• Prince Charles Hospital – Interserve – Merthyr Tydfil
Following significant capital expenditure in 2020 to
increase the hire stock level the Group continued to
invest in Hoard-it during 2021, in particular bulk buying
board to ensure supply was always available and
mitigating cost increases as far as possible.
Hoard-it entered 2022 with a good pipeline of new
business and the positive momentum experienced in
2021 has continued into the current year.
The pandemic related challenges faced in 2020
continued in 2021, with particular disruption experienced
in the second half of the year due to Covid-19 related
staff absences. I am pleased to say that the Billington
workforce rose to these challenges, covering for staff
absences as diligently as possible, and showing the
resilience and flexibility required to maintain the Group in
a strong position.
Average staff numbers in 2021 decreased 1.8 per cent,
with 391 employed at the year end.
We anticipate a modest increase in staff numbers in 2022
as activity levels increase, although attracting sufficient,
experienced, quality people remains a challenge for
both Billington and the industry as a whole. The Group
therefore continues its focus on developing its people
and has implemented a number of training initiatives to
assist in overcoming this issue.
Of particular note is the welding school we have
established in partnership with Betterweld to help
mitigate the shortage of skilled fabricator welders. We
have increased our number of apprentices in this area
and through a structured training programme we aim to
provide the next generation with the appropriate skills for
our industry.
Billington maintains close relationships with other local
education providers, with continuing support being
provided to 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.
Billington also continues to actively promote its
apprenticeship and graduate schemes in other
areas, particularly focusing on technical staff. These
programmes are geared to help the business maintain
the necessary skills and expertise to meet both its
current and future requirements.
Additionally, Billington continues as an advocate, promotor
and contributor to the British Constructional Steelwork
Association’s CRAFT apprentice programme. The scheme
has become an important path for the 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 clients and be at the forefront of new processes and
techniques, driving manufacturing efficiencies.
5
6
Health, Safety, Sustainability, Quality
and the Environment
A commitment to health, safety, sustainability, quality
and the environment is core to everything that Billington
does.
In light of the Covid-19 pandemic the health and
wellbeing of our staff and customers has, and
continues to be, of the highest priority. The significant
changes made in 2020 to the way we operate to allow
for social distancing, home working by office staff
where appropriate and to provide a healthy working
environment for those working in our facilities and on
sites, continued and was adapted as appropriate in 2021.
We are regularly reviewing our working practices to
ensure we meet best practice and ensure all appropriate
measures are taken to ensure the health and wellbeing of
our staff, subcontractors and customers.
Across the Group, led by our Health and Safety
department, we work to ensure that continued progress
can be achieved in enhancing working practices and
improving the safety culture at all the Group’s facilities
and in our on-site activities. We are also actively involved
in a number of initiatives both locally and nationwide to
ensure the safety of our staff and to minimise the impact
of our operations on the environment. 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
safe ways of working.
Charity
Billington continues to be a significant advocate and
supporter of both local and national charities. In 2017 the
Billington Charity Foundation was established in order to
focus efforts. In 2021 Billington has continued to actively
support many charity programmes.
Throughout 2021, Billington donated to charities including
Macmillan, Mind and Barnsley Hospice, together with a
range of local sports teams and other causes that our
employees are involved with.
Billington actively supports a diverse range of charitable
and social causes that our employees are involved with, and
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 and monitors
these on a regular basis.
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 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.
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.
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.
Specialist Protective Coatings
Steel Industry
Throughout 2021, the dominant theme has been the
increase in steel prices across Europe. This has primarily
been driven by increased energy costs, although
extreme volatility in iron ore prices during the period,
coupled with overall increases in scrap steel values, has
led to consequential price increases in the wide range of
steel products that the Group sources from a variety of
steel producers worldwide.
In 2021 these price increases were in the order of 60 per
cent, on top of the c.40 per cent. increases seen in 2020.
We anticipated a more stable supply picture in 2022,
with previous supply constraints removed and Billington
benefiting from its scale in the market and trading
relationships with its primary supply chain. The onset of
the conflict in Ukraine has noted a restriction in some raw
materials used in the steel making process of some steel
products and further price rises have been encountered
as a result.
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
volatility in steel prices and any variability in supply over
the short term. This hedging strategy, coupled with the
stockpiling seen in the later part of 2021, enables most
projects to be covered up to six months out, mitigating
the immediate impact. Although, over the longer-term
price rises are passed onto customers as far as possible.
The Group is also reviewing its steel procurement
strategy in order to reduce its reliance on any one
supplier as far as possible.
Strategy and Acquisition
The Group has implemented a strategy to improve
operating margins over the medium term through the
investment and upgrading of some principal items of
capital equipment, combined with projects to increase
the capacity from the Company’s fixed asset base. These
projects shall ensure the Group maximises the inherent
value within the business and capitalises upon its strong
market position within the industry.
Post period end we established a new trading subsidiary,
Specialist Protective Coatings Ltd (“SPC”), following the
Company’s acquisition of the trading assets of Orrmac
Coatings Ltd, a specialist painting Company based in
Sheffield, UK, out of administration. The Group has been
seeking to expand its painting capabilities for some time
and the acquisition presented an excellent opportunity to
strengthen the Group’s internal offering in this area as well
as providing a specialist service to the wider market. Since
Billington acquired the trading assets of Orrmac Coatings,
sited from the 55,000 square foot facility in Sheffield, it has
undergone a substantial refurbishment and investment
programme to ensure the facility is able to effectively
service the most demanding of projects, including
shotblasting and lifting capabilities for steel assemblies
that are amongst the largest capacity in the UK.
The incorporation of SPC will provide the Group with
increased control of a significant subcontract trade
that had previously been outsourced and ensure the
margin associated with this trade is maintained within the
business.
Prospects and Outlook
The Group continued to face challenges during the year,
both from the continuing impact of the Covid-19 pandemic,
particularly in relation to staff absences, and raw material
price increases, together with supply constraints for certain
materials and labour. However, whilst the overall market
continues to be challenging, the Directors believe the
outlook for Billington is encouraging.
We remain in a financially robust position and I believe
all our businesses are well placed for the future. We
have weathered the pandemic well and as the market
returns to more normal operating conditions we are well
placed to take advantage. A number of our competitors
and suppliers have suffered to a much greater extent
than Billington, with a number ceasing to trade over
the past two years. This, over the longer term, will aid
margin improvement across the industry and will create
opportunities for Billington to secure new business.
Whilst the potential for continuing material price inflation
and the macroeconomic landscape, particularly with
events in Ukraine, remains a concern the order book
continues to grow. The current order book comprises
both delayed and new projects, and the Group has
significant future order prospects, many at improved
margins. There are a number of larger, more complex
projects both contracted and in prospect, and the number
and quality of enquires continues to improve. We are
seeing opportunities in all sectors, particularly large retail
distribution warehouses, data centres, ‘Gigafactories’,
food processing developments, film industry, public sector
works, rail infrastructure, together with a return of some
commercial office development projects.
In closing, I would like to thank Billington’s Board,
employees, shareholders and all stakeholders for their
continued support. Despite the continuing challenging
market conditions I look forward with optimism that the
shoots of recovery seen in 2021 and into the early part of
the current year will continue to gain traction.
Mark Smith
Chief Executive Officer
25 April 2022
7
8
A63 Balfour Beatty, Hull
FINANCIAL REVIEW
Barberry Phase 2, Central Park
Revenue
£82.7m
Underlying EBITDA
£3.3m
Underlying profit
before tax
£1.3m
Underlying operating
profit margin
1.6%
Operating cash outflow
£(2.7)m
Cash and cash
equivalents
£10.4m
Underlying earnings per share
from continuing operations
8.1p
Consolidated Income Statement
Consolidated Balance Sheet
Revenue
Operating profit/(loss)
Profit/(loss) before tax
Profit/(loss) after tax
Profit/(loss)
Operating profit margin
Return on capital employed
Earnings/(loss) per share (basic)
Underlying
2021
£’000
Non-Underlying
2021
£’000
82,720
1,339
1,302
978
978
1.6%
8.4%
8.1p
-
(1,123)
(1,123)
(910)
(910)
-
-
(7.5)p
Total
2021
£’000
82,720
216
179
68
68
0.3%
1.4%
0.6p
2020
£’000
65,955
1,659
1,667
1,369
1,369
2.5%
13.9%
11.3p
Revenue increased 25 per cent year on year primarily
as a result of increased output related to the structural
steelwork activities of the Group. Revenue was also
impacted by cost inflation related to some of the primary
input costs of the Group. Over the course of 2021, as a
result of iron ore and energy cost escalation, the price for
steelwork increased by over 100 per cent, with further
increases seen during the early part of 2022.
Forecasts indicate that the consumption of structural
steelwork within the UK increased to 803,000 tonnes in
2021 from 686,000 tonnes in 2020, an increase of 17 per
cent. Projections indicate that consumption will increase
by 10.5 per cent to 887,000 tonnes in 2022 and a further
2.1 per cent to 905,000 tonnes in 2023, allowing the
Group to look forward with optimism in the medium term
as the UK continues to recover from the pandemic.
Underlying operating margins reduced to 1.6 per cent
in the year as a result of overhead cost inflation, input
material price increases that are unable to be hedged,
a number of challenging projects and subdued margins
attainable on new contracts. The operating margin
achieved within the Safety Solutions entities, at 14.2 per
cent (2020: 16.9 per cent), was very encouraging and
demonstrated resilience during the period. The level of
utilisation for the hire products within the Safety Solutions
division continued to be impacted primarily as a result of
continued low levels of commercial office construction
throughout the UK.
Cash management continued to be a primary focus
during the year. The reduction in the gross cash balance
to £10,382,000 at 31 December 2021 (31 December
2020: £15,126,000) was primarily attributable to working
capital requirements increasing £3,565,000 in the
period as a consequence of high workloads and the
forward purchasing of raw materials at the period end.
The average gross cash balance during the year was
£13,390,000 (2020: £15,300,000). The continued strong
cash position leaves the Group well placed to achieve
both its short and long-term objectives, while providing
financial security and providing opportunities to invest
and mitigate short term price volatility in some of its
primary input costs.
Average staff numbers in 2021 decreased 1.8 per cent to
372, with an overall rise in staff costs of 1.5 per cent year
on year. Industry wide challenges remain to ensure wage
inflation is mitigated and in attracting sufficient quality
resource across all disciplines. The Group anticipates
a modest increase in staff numbers in 2022 as activity
returns to pre pandemic levels.
The Shafton facility continues to provide the Group with
opportunity to expand and diversify its operations further
optimising the current resources within the control of the
Group.
Non current assets
Current assets
Current liabilities
Non current liabilities
Total equity
2021
£’000
17,527
2020
£’000
16,219
35,428
33,340
(21,705)
(18,866)
(1,858)
29,392
(1,476)
29,217
During the year two significant capital expenditure
projects were completed that were previously paused
upon the onset of the pandemic. One project, at Shafton,
related to the investment in a dedicated plate girder
manufacture line to ensure that the Group’s offering was
enhanced and could service all its clients’ requirements.
The second project related to the replacement of an
aged shotblast machine at its Yate facility.
Further investment projects to improve operational
efficiencies and increase certain manufacture capacities
were commenced just prior to the year end, with the
majority of this expenditure to occur in 2022. At the year
end these projects under construction totalled £421,000.
As part of the Group’s ongoing strategy to improve
operating margins there is an agreed programme of
capital equipment replacement and enhancement over
the next four years.
Within non-current assets, property, plant and equipment
increased by £318,000, represented by capital additions
of £2,351,000, depreciation charges of £1,960,000 and
net disposals of £73,000.
The net deferred tax liability at the year end was
£1,108,000 (2020: £476,000), being a deferred tax liability
of £440,000 (2020: £156,000) related to temporary
timing differences, combined with a deferred tax liability
of £668,000 (2020: £320,000) related to the defined
benefit pension scheme surplus.
The increase of £2,088,000 in current assets included
an increase of £7,073,000 in inventories and work in
progress, a decrease of £660,000 in trade and other
receivables, and a decrease in the gross cash balance of
£4,744,000.
Retention balances, contained within trade and other
receivables outstanding at the year end, were £1,951,000
(2020: £3,110,000). It is anticipated that £1,667,000 will be
received within one year and £284,000 in greater than
one year.
Trade and other payables increased by £2,848,000.
Within this, trade payables increased £7,188,000 and
was offset through decreases of £2,409,000 related to
social security and other taxes and £1,388,000 related to
contract losses.
The defined benefit pension scheme has performed
well in the period against a backdrop of turbulent equity
markets. At the year end, a surplus of £2,673,000 along
with a corresponding deferred tax liability of £668,000
has resulted in a net recognised surplus of £2,005,000.
The scheme was closed to future accrual in 2011.
On 1 March 2021 the reverse charge VAT regime by
HMRC was implemented. Under the new procedures VAT
is no longer charged, and monies received to the majority
of its customers for on site construction activities. The
new procedure has resulted in an adverse impact on the
cash flows relating to the payments of VAT to HMRC.
Total equity increased by £175,000 in the year to
£29,392,000. The financial position of the Group at the
end of the year remains robust and provides a strong
platform to drive shareholder value.
9
10
Consolidated Cash Flow Statement
The Glass Works, Barnsley
Result for shareholders
Depreciation
Capital expenditure
Tax paid
Tax per income statement
Increase in working capital
Dividends paid
Net property loan movement
Others
Net cash inflow
Cash at beginning of year
Cash at end of year
2021
£’000
68
1,960
(2,351)
(246)
111
(3,565)
(515)
(250)
44
(4,744)
15,126
10,382
2020
£’000
1,369
1,911
(2,216)
(844)
298
(3,088)
-
(250)
90
(2,730)
17,856
15,126
Dividends were reinstated in the year follow their
suspension in 2020 with £515,000 paid in the period.
A dividend has been proposed in respect of the 2021
financial year of 3 pence per share (£388,000), covered
2.7 times underlying earnings and will be paid to
shareholders upon approval at the AGM in July 2022.
The Group remains committed to treating its suppliers
and subcontractors fairly and to paying them in line with
their agreed payment terms. It is the Group's policy not
to withhold retentions from members of its valued supply
chain.
Working Capital
Inventories and work in progress
Accounts receivable
Accounts payable
Working capital at end of year
2021
£’000
12,151
12,216
(21,455)
2,912
2020
£’000
5,078
12,876
(18,607)
(653)
Cash balances at the year end totalled £10,382,000 and
there were property loans outstanding of £1,000,000
representing a net cash position of £9,382,000 (2020:
£13,876,000). Cash management and preservation
remained a continued focus during the year. The robust
cash position of the Group allowed it to take advantage
of advanced purchase of structural steelwork to mitigate
some of the price escalations during the year and
mitigate margin pressure.
The strong cash position provides the Group with
financial stability and allows the investment in capital
assets to improve operating margins and provide a
comprehensive service to its clients.
11
12
The cash balance was impacted in the year through
the transition to the new reverse charge VAT regime
implemented by HMRC from 1 March 2021, the repayment
of the deferred VAT liability (£671,000) under the
coronavirus deferral scheme and the high level of
contract work in progress at the year end.
The strong year end cash position allows the Group to
further invest in replacing and upgrading some of its
capital assets. 2022 to 2025 will see a programme of
capital additions, primarily within the structural steel
division of the Group. The additional capital expenditure
will support both an increase in the range of services the
Company can perform as well as replacing a number of
aged machines with more efficient models. Investment in
the latest technologies will ensure Billington can deliver
the most challenging projects, efficiently, for its clients.
Non Underlying Items
Shortly after the year end a client with whom the
Company was completing a contract entered
administration. The decision has been taken to provide
for the debt owed while continuing in dialogue with the
developer to complete the outstanding contract works
and recover the monies owed.
This event provided further evidence following previous
communications prior to the year end that there was
significant uncertainty regarding the recoverability of
the receivable and contract work in progress owed by
the client at the balance sheet date and is therefore
considered an adjusted post balance sheet event.
Pension Scheme
Scheme assets
Scheme liabilities
Surplus
Other finance expense/(income)
Contributions to defined benefit scheme
To limit the Group’s exposure to future potential pension
liabilities the decision was taken to close the remaining
Billington defined benefit pension scheme to future
accrual from 1 July 2011. The scheme’s assets have
performed well, in a difficult market during the period,
leaving the scheme in a strong position as at the balance
sheet date. The scheme underwent an asset review in
the period and the decision taken to derisk the portfolio
and hedge against future inflation while maximizing
returns. As a result the majority of the schemes assets
are now held in government bonds.
The scheme's triennial valuation for the period ended 31
March 2020 was completed on 10 December 2020. The
position of the scheme as at the date of the valuation was
an asset position of £8,048,000 and a liability position
of £7,776,000 resulting in a surplus of £272,000. At the
valuation date of 31 March 2020, the equity market had
been significantly impacted by the pandemic and as a
consequence affected the value of the assets within
the scheme. The FTSE 100 index at 31 March 2020 was
5,672 and has subsequently recovered to circa 7,600,
an increase of some 34 per cent, before the assets were
transferred into UK government bonds to protect and
manage the strong surplus position of the scheme in
the long term. The next actuarial valuation is due to be
completed as at 31 March 2023.
2021
£’000
9,693
(7,020)
2,673
(33)
-
2020
£’000
9,292
(7,609)
1,683
4
-
Employee Share Option Trust (ESOT)
The Group operates an ESOT to allow employees to
share in the future, continued success of the Group,
promote productivity and provide further incentives to
recruit and retain employees.
Options are issued based on seniority and length of
service across all parts of the Group.
A Long Term Incentive Plan (LTIP) was introduced across
the Group to assist in the remuneration of management
and further align the interests of senior management
and shareholders. Awards are made subject to achieving
progressive Group performance metrics over a three year
period.
At the year end there were 474,577 share options
outstanding at an average exercise price of £0.29 per
share (2020: 514,395 shares at £0.43 per share).
The credit included within the accounts in respect of
issued options is £53,000 (2020: charge £181,000).
Trevor Taylor
Chief Financial Officer
25 April 2022
BOARD PROFILE & 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
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.
Mark joined Billington Holdings Plc as Chief Operating Officer on
2 June 2014. He was appointed as Chief Executive on 1 January
2015. Mark has an in depth knowledge of the 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
Trevor is a fellow of the Institute of Chartered Accountants in England
& Wales (ICAEW) and joined Billington in 2008 after 5 years in audit
practice specialising in Construction and Financial Services.
Alexander Ospelt
Non Executive Director
Appointed: 01/01/2013
Nationality: Liechtensteiner
Alexander Ospelt has been in independent practice as a lawyer since
1997 and is a 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
Opselt 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.
John Stuart Gordon
Non Executive Director
Appointed: 01/04/2007
Nationality: British
John practised as a barrister from 1989 until 1999 when he re-
qualified as a solicitor. John is in private practice as a partner /
consultant in Excello Law Solicitors, specialising in commercial
and property litigation. He was appointed to the Board in 2007,
and his legal-commercial background makes him a valuable
member of the team.
Stephen John Wardell
Non Executive Director
Appointed: 14/01/2019
Nationality: British
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 in 2014. Stephen
currently has a role with the KPMG UK Audit Board and is also a
director of The 5% Charity Club.
Auditors
Grant Thornton UK LLP, Chartered Accountants
& Statutory Auditors, No.1 Whitehall Riverside,
Leeds, LS1 4BN
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
Registrar and Main Transfer Office
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
13
14
Shafton Steel Services
REPORT OF THE DIRECTORS
The Directors present their report together with the audited financial statements
for the year ended 31 December 2021.
Results and Dividends
Interest rate risk
The consolidated income statement is set out on page 37
and shows the result for the year.
A final dividend has been proposed in respect of 2021
of 3.0 pence per ordinary share (£388,000) (2020: 4.25
pence) per ordinary share (£550,000). As the distribution
of dividends by Billington Holdings Plc requires approval
at the shareholders’ meeting, no liability in this respect is
recognised in the consolidated financial statements.
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.
Billington Holdings Plc ordinary 10p shares
Ian Lawson
Mark Smith
Trevor Taylor
John Gordon
Alexander Ospelt
Stephen Wardell
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.
Liquidity risk
The Group seeks to manage financial risk by ensuring
sufficient liquidity is available to meet foreseeable needs
and by investing cash assets safely and profitably.
Primarily this is achieved through a Group treasury
function which is charged with ensuring sufficient liquid
funds are available to all companies as and when they are
required. Additionally short term flexibility is achieved by
overdraft facilities.
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, credit
insurance is maintained, where available, to reduce
the risk to an acceptable level (see notes 13 & 19 to the
consolidated financial statements).
Directors
All Directors served throughout the year.
In accordance with the Articles of Association Mr I.M.
Lawson and Mr S.J. Wardell 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 2021
1 January 2021
Shares
Options
Shares
Options
17,200
17,161
17,438
82,270
6,500
-
-
160,968
120,904
-
-
-
17,200
13,749
14,749
82,270
6,500
-
-
167,904
126,369
-
-
-
15
16
The Directors outstanding options at the year of the year were as follows:
Streamlined Energy and Carbon Reporting (‘SECR’)
Bonus Scheme
Deferred Bonus Plan
LTIP
Statement of Directors’ Responsibilities
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 UK-adopted international
accounting standards and have elected to prepare parent
Company financial statements in accordance with United
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;
• make judgements and accounting estimates that are
reasonable and prudent;
• state whether applicable UK-adopted international
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 unless it is inappropriate to presume that the
Company will 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 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 information of which the Company’s auditor is
unaware and;
• the Directors have taken all steps that they ought to
have taken as Directors in order to make themselves
aware of any relevant audit information and to establish
that the auditor is aware of that information.
Mark Smith
Trevor Taylor
Exercise price exercise date
Expected
4,689
18,160
3,701
13,620
138,119
103,588
160,968
120,909
nil
nil
nil
Mar 22
Mar 23
Mar 22 - Mar 23
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.
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 continued positive
underlying trading performance in 2021 are detailed in
the Financial Review and they demonstrate the robust
position of the Group heading into 2022.
The Group has a gross cash balance of £10.4 million at 31
December 2021 and no significant long-term borrowings
or commitments.
The Directors have prepared forecasts covering the
period to April 2023 and approved by the Board in March
2022. Whereas restrictions are easing within the UK and
the construction industry output increases there remains
some residual uncertainty as to the future impact on
the Company of Covid-19. The residual uncertainty has
been separately considered as part of the Directors’
consideration of the going concern basis of preparation.
The success of the vaccine roll out programme, combined
with the continued easing of restrictions, provides an
increased degree of confidence moving into 2022.
Industry projections (issued in January 2022) indicate
that output increased 16.8% in 2021 and a further 10.5%
anticipated in 2022. Furthermore, the current orderbook
secured for 2022 allows the Group to look forward with
an increasing degree of optimism.
Material price volatility and availability has been
affected through the onset of the conflict in Ukraine. The
Company’s primary input materials relating to contracts
are that of steel sections and plate. The Company has
sought to agree fixed prices with its suppliers and
forward purchase sufficient quantity of these materials
to provide certainty the Company is able to meet its
contractual obligations.
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.
Billington’s SECR reporting is in accordance with UK
regulations and includes emissions arising from our
fleet, gas and electricity in all sites and offices of the
Group’s parent company and the main subsidiary
Billington Structures Limited. To calculate its emissions
into equivalent tonnes of carbon dioxide (CO2e) the
Government’s carbon conversion factors updated in
2020 were used.
For the year ended 31 December 2021 the energy usage is as follows:
2021
KwH
2020
KwH
Total energy consumption used to calculate emissions:
6,501,193
6,402,369
Emissions from combustion of gas tCO2e (Scope 1)
Emissions from combustion of fuel for transport purposes (Scope 1)
Emissions from purchased electricity (Scope 2, location-based)
Emissions from business travel in employee-owned vehicles (Scope 3)
Total gross CO2e
Greenhouse gas emissions - intensity ratio:
Tonnes of CO2e per £’m of revenue
2021
Tonnes of
CO2e
2020
Tonnes of
CO2e
504
234
638
38
1,414
17.2
674
145
609
17
1,445
21.9
The Group’s approach to environmental matters is
included within the Sustainable and Responsible
Business Report.
The Group is fully compliant with ESOS legislation and
also achieved re-certification for BS EN ISO 14001:2015
Environmental Management during the year.
A project to migrate all lighting to LED across the Group
has continued during the year and we have also received
the first fully-electric and hybrid vehicles and placed
orders for further hybrid and electric vehicles.
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.
Auditor
A Carbon Reduction Policy is currently in place to make to
ensure that the Group actively seek and invest in energy
and efficiency saving measures, continues to actively
recycle waste where possible and target improvements in
transport and fuel efficiency.
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.
During the year the Group established the Environmental,
Social and Governance Committee. In 2022. the
Committee will set environmental targets for the Group
and start implementing policies and procedures to work
towards achieving carbon accreditation.
This report was approved by the Board and signed on
its behalf.
Darren Kemplay
Company Secretary
Billington Holdings Plc
Company Number - 02402219
25 April 2022
17
18
STRATEGIC REPORT FOR THE
YEAR ENDED 31 DECEMBER 2021
The Directors present their report together with the audited financial statements
for the year ended 31 December 2021.
Business Review
The business model of the Group is to operate as
a designer, manufacturer and installer of structural
steelwork through its subsidiaries Billington Structures
Limited and Peter Marshall Steel Stairs Limited, and as
a supplier of safety solutions and 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.
On a Group basis the business review and future
prospects for the business are contained within the
Operational Review and Financial Review (see pages 3
to 13), including an analysis using key financial and
non-financial performance indicators.
Key Non-financial Performance Indicators
Production efficiency
Hire stock utilisation
Accidents (own employees) - reportable
Employee numbers
Apprentice intake
Staff turnover (excluding restructuring)
2021
123%
61%
5
372
5
16%
2020
111%
72%
2
379
1
18%
Principal Risks and Uncertainties
Principal risks and uncertainties have been reviewed and
updated. There are no new principal risks or uncertainties
identfied during the year.
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 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, 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.
Birmingham City Council
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.
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 however the
success of the vaccine roll out programme, combined
with the continued easing of restrictions, provides an
increased degree of confidence moving into 2022.
Industry projections (issued in January 2022) indicate
that output increased 16.8% in 2021 and a further 10.5%
anticipated in 2022. The Directors continue to monitor
the latest situation on a daily basis and are taking all
necessary steps and actions to reduce the risk and
impact on the Group. Further details as to the impact
of Covid-19 and the mitigation measures implemented
during the period are contained within the Report of
the Directors, Chairman’s, Chief Executive’s, and Chief
Financial Officer’s statements.
Failure to manage the above principal risks, as far as
the Group is able, could lead to significant impact on
profitability and to the reputation of the Group.
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.
Details of how the Directors have fulfilled their duties are
included in the Governance Report.
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.
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
25 April 2022
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Old Granada Studios, Manchester
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 Group have 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
Environment
Overview
Billington operates within an industry whereby if risks
are not appropriately identified, monitored and mitigated
they against could present risks to employees and wider
stakeholders. The Chief Executive Officer is ultimately
responsible for the implementation and enforcement of
the Group’s policies and procedures.
The Health and Safety risks are mitigated through the
constant review of the Company’s procedures by an
appropriately resourced and trained Health and Safety
department who operate on a Group level and are able to
cross pollinate good practices across all Group entities.
The Group Health and Safety Manager takes an active
involvement in the British Constructional Steelwork
Associations (BCSA) Health and Safety Committee
to enable the Company to maintain and improve its
knowledge of industry observations, trends and best
practice.
The Company adheres to BS EN ISO 45001 and is audited
annually through the Steel Construction Certification
Scheme (SCCS) to ensure compliance.
The Heath and Safety of the Group’s 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.
Overview
Due to the industry in which Billington operates, the
Group recognises that its business activities can impact
the wider environment, and therefore, has an obligation
to reduce the direct negative impact of these activities.
In order to manage the environmental risk, Billington has
adopted policies that comply with the ISO BS EN 14001 -
Environmental Management System.
The policies implemented by Billington manage the
environmental impact by reducing pollution, improving
energy efficiency and reusing and recycling waste (where
possible), in order to achieve its long-term environmental
goals.
Billington also maintains the Gold Standard awarded by
the British Constructional Steel Association (“BCSA”)
for meeting the requirements of the Steel Construction
Sustainability Charter. The programme of sustainability
objectives is reviewed annually as a means of
demonstrating continuous improvement.
To ensure the successful implementation of the Group’s
environmental policies, Billington educates and informs
its employees of the environmental impact of their work
activities, and encourages staff to seek methods to
reduce these impacts. It also provides employees with
the necessary resources to deliver the environmental
objectives.
Additionally, the Group works in partnership with sub-
contractors to identify and develop procedures to reduce
the environmental impact of its onsite project work to a
practicable minimum and ensure optimum efficiency of
onsite operations.
The Board is responsible for continuously monitoring
and reviewing these policies to ensure the programme
is adapted and improved. This will ultimately save the
Group money, improve brand reputation and reduce
Billington’s environmental footprint.
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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.
Employees
Employee engagement, development and satisfaction is
key to building a successful business. Billington invests
in the development of its staff, adopting a number of
policies aimed at recruiting and rewarding employees,
including operating effective training and award-winning
apprenticeship schemes.
Billington keeps an open line of communication with
employees through regular briefings and the production
of Company literature including a bi-weekly newsletter.
Board members frequently attend management briefings
with Group companies to ensure active engagement at
all levels.
The Company implements an Employee Share Option
Trust (ESOT) to allow employees to share in the future
and continued success of the Group.
Employee health and welfare is of utmost importance
and a range of schemes and initiatives have been
implemented and communicated to employees to assist
in the promotion of an active 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 promote employee welfare. The Company was
recognised for its promotion of employee welfare in the
“Be Well at Work” awards in the local region.
These policies help to foster employee communication
and development, and help to deliver long-term
Company growth.
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.
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.
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.
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.
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 Committee continues to
review these procedures and their effectiveness in order
to positively enhance the working environment.
Health and Safety
Health and safety issues are monitored and reviewed on
a monthly basis by senior management and the Board.
The Group has a well-developed management system
for the internal and external control of health and safety
which is managed by the Group Health & Safety Manager.
This includes the use of risk management systems for
the identification, mitigation and reporting of health and
safety management information.
Billington’s onsite teams have received numerous awards
and recognition for their dedication to health and safety
practices and the Company aims to continue this success.
Bribery and Corruption Policy
Billington has a strict, zero tolerance Bribery and
Corruption Policy, which complies with the Bribery Act
2010, to ensure the integrity and transparency of the
Group is maintained. All Group employees are informed
of the Company’s Bribery and Corruption Policy and the
Board is responsible for ensuring that all sectors of the
business comply with these obligations.
Appropriate internal and external training is given to
employees who may be exposed to situations whereby
bribery, corruption and collusion could occur to ensure
they are able to identify, act and report instances as they
arise.
Charity
The Company is actively involved in supporting local
and national charities, and has established the Billington
Holdings Charity Foundation through which it directs
all charitable donations. It 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.
The Group has a long history of providing apprenticeship
programmes throughout the business, and these form a
key 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 industry.
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.
Governance
Overview
Good corporate governance is one of the Company’s
core values and, as an AIM listed entity, it is something
that the Group takes very seriously, ensuring that the
Board implements the Quoted Companies Alliance
Corporate Governance Code for Small and Mid-
Sized Quoted Companies throughout the Company’s
operations.
ESG Committee
In 2021 the Group established a committee to focus on
the core principals related to its Environmental, Social
and Governance responsibilities.
The initial focus on the Group will be to review and
establish the short, medium and long term objectives
and their related timescales for implementation and
subsequent achievement. The objectives and the Groups
desire to become Carbon Zero will be established over
the course of 2022.
The committee is made up of employees from across the
Group and at varying levels of seniority so as to ensure a
diverse range of views and opinions are gained and that
buy in is ensured from all areas of the business.
Ethical Principles
Overview
The Group values its reputation for ethical behaviour and
has a set of values that are at the core of its business
philosophy.
To conduct business ethically, maintaining the Company’s
integrity
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 Group will conduct its business
operations in an honest, fair and transparent manner.
The Company will strive to meet the highest industry
standards across all Group companies and ensure all
employees are in the position to successfully deliver
these requirements.
To value the welfare of its employees and ensure they
have a safe, healthy and productive working environment
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.
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Project Triathlon, Essex
GOVERNANCE REPORT
HOW BILLINGTON IS GOVERNED
Introduction to Governance
The Board is authorised to manage the business of
the Company on behalf of the shareholders and in
accordance with the Company’s Articles of Association.
This is achieved by delegating responsibilities to the
Board Committees and designating authority to manage
the business to the Chief Executive Officer.
The Board is responsible for overseeing the management
of the business and for ensuring high standards of
corporate governance are maintained throughout the
Group. The Board is currently comprised of two Executive
Directors, three Non Executive Directors and a Non
Executive Chairman.
The Board is accountable for the long-term success of
the Group. The Directors meet on a regular basis and
the Executive Directors are in continual discussion with
the operational management to ensure that the business
objectives of the Group are achieved. Non Executive
Directors have a particular responsibility to ensure that
the strategies proposed by the Executive Directors are
fully 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 Executive Directors
are considered by the Board to be independent of the
management, and bring a breadth of experience which is
welcomed by the Executive Directors.
Further details on how the Company complies with the
Principals of the QCA code can be found on the Billington
Holdings Plc website at - https://billington-holdings.plc.
uk/aim-information/corporate-governance-policy/
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.
Communication with Shareholders
The Company encourages two-way communication with
both its institutional and private investors and attempts
to respond quickly to all queries received verbally or in
writing.
The Executive Directors undertake a programme of
regular communication with institutional shareholders
and with analysts covering the Group’s activities, its
performance and strategy.
The Executive Directors formally meet with institutional
shareholders at least twice a year, after the half year
and full year results are released. In addition, site
visits for current and prospective shareholders are
conducted throughout the year when requested to
allow the operations and capabilities of the Group to be
demonstrated and observed.
The Board has sought to use the AGM to communicate
with private investors and encourages their participation.
The notice of the 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 business activities.
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.
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
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 a
strong balance of expertise at Board level.
Board Meeting Attendance
Mark Smith
Trevor Taylor
John Gordon
Alexander Ospelt
Ian Lawson
Stephen Wardell
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Audit Committee
Remuneration Committee
Chaired by Stephen Wardell
Chaired by John Gordon
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.
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.
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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 year ended 31
December 2021, which comprise the Consolidated
income statement, Consolidated statement of
comprehensive income, Consolidated statement
of financial position, Consolidated statement of
changes in equity, Consolidated cash flow statement,
the Parent company statement of financial position,
Parent company statement of changes in equity,
notes forming part of the Group financial statements
and notes forming part of the Parent company
financial statements, including a summary of
principal accounting policies. The financial reporting
framework that has been applied in the preparation
of the group financial statements is applicable law
and UK-adopted international accounting standards.
The financial reporting framework that has been
applied in the preparation of the parent company
financial statements is applicable law and United
Kingdom Accounting Standards, including Financial
Reporting Standard 102 ‘The Financial Reporting
Standard applicable in the UK and Republic of
Ireland’ (United Kingdom Generally Accepted
Accounting Practice).
In our opinion:
• the financial statements give a true and fair view of
the state of the group’s and of the parent company’s
affairs as at 31 December 2021 and of the group’s
profit for the year then ended;
• the group financial statements have been
properly prepared in accordance with UK-adopted
international accounting standards;
• the parent company financial statements have
been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice;
and
• the financial statements have been prepared
in accordance 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 parent company
in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the
UK, including the FRC’s Ethical Standard as applied to
listed entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our
opinion.
Conclusions relating to going concern
We are responsible for concluding on the
appropriateness of the directors’ use of the going
concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant
doubt on the group’s and the parent company’s ability
to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw
attention in our report to the related disclosures in
the financial statements or, if such disclosures are
inadequate, to modify the auditor’s opinion. Our
conclusions are based on the audit evidence obtained
up to the date of our report. However, future events or
conditions may cause the group or the parent company
to cease to continue as a going concern.
A description of our evaluation of management’s
assessment of the ability to continue to adopt the going
concern basis of accounting, and the key observations
arising with respect to that evaluation is included in the
Key Audit Matters section of our report.
Based on the work we have performed, we have not
identified any material uncertainties relating to events
or conditions that, individually or collectively, may
cast significant doubt on the group’s and the parent
company’s ability to continue as a going concern for a
period of at least twelve months from when the financial
statements are authorised for issue.
In auditing the financial statements, we have concluded
that the directors’ use of the going concern basis of
accounting in the preparation of the financial statements
is appropriate.
The responsibilities of the directors with respect to going
concern are described in the ‘Responsibilities of directors
for the financial statements’ section of this report.
Our approach to the audit
Overview of our audit approach
Overall materiality:
Group: £252,000, which represents 0.3% of the group’s revenue.
Parent Company: £101,000, which represents 0.5% of the parent
company’s total assets.
Key audit matters were identified as:
Materiality
Key Audit
Matters
• Inappropriate recognition of revenue (Group) - same as previous year; and
• Going concern (Group) – same as previous year.
Scoping
Our auditor’s report for the year ended 31 December 2020 did not include any
key audit matters that have not been reported as key audit matters in our current
year’s report.
We have performed an audit of the financial statements of components using component materiality (full scope audit)
on the financial statements of Billington Holdings plc and two directly held trading subsidiaries; specific-scope audit
procedures on two directly held trading subsidiaries; and analytical procedures on one directly held trading subsidiary.
90% of the group’s revenue and 92% of the group’s total asset balance were subject to full scope audit.
All audit work was performed by the group engagement team.
Key audit matters
Key audit matters are those matters that, in our
professional judgement, were of most significance
in our audit of the financial statements of the current
period and include the most significant assessed risks
of material misstatement (whether or not due to fraud)
that we identified. These matters included those that
had the greatest effect on: the overall audit strategy; the
allocation of resources in the audit; and directing the
efforts of the engagement team. These matters were
addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on
these matters.
Description
Audit response
KAM
Disclosures
Our results
In the graph below, we have presented the key audit matters, significant risks and other risks relevant to the audit.
High
Potential
financial
statement
impact
Low
Low
Inappropriate recognition
of revenue
Going concern
Contract costs
Management override of controls
Trade receivables and contract work in progress
Inventory
Pension
surplus
Share based
payments
Bank and cash
Trade payables
Contract related provisions
Key audit matter
Significant risk
Other risk
Extent of management judgement
High
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Key Audit Matter - Group
How our scope addressed the matter – Group
Inappropriate recognition of revenue
We identified inappropriate recognition of revenue
in relation to construction contracts as one of
the most significant assessed risks of material
misstatement due to fraud.
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.
The group has entered into construction contracts
which span the 31 December 2021 year end
with varying terms and degrees of complexity,
generating revenue ‘over time’.
There is a risk of fraudulent or erroneous recording
of revenue by allocating incorrect amounts of
consideration and/or incorrectly assessing the
stage of completion for a contract.
We pinpointed the significant risk in respect
of revenue arising in the open elements of the
construction contracts, which are subject to manual
adjustment around the year end.
Management’s assessment includes a number of
estimates:
• Estimated total contract costs;
• Estimated stage of completion derived from the
total contract costs; and
• Forecasted margin which is also derived from total
contract costs.
In responding to the key audit matter, we performed the
following audit procedures:
• Documented and assessed the design and implementation of
controls around the recognition of revenue;
• Evaluated the revenue recognition accounting policies for
consistency with IFRS 15 ‘Revenue from Contracts with
Customers’, with reference to key judgements made by
management in the period, and ensured that these judgements
are valid;
• Tested management’s IFRS 15 assessment of performance
obligations and recording of consideration across a sample of
contracts to determine whether there is an indication of bias in
the amount of consideration recognised by obligation or that
there is an error in the performance obligations identified;
• Challenged management’s total expected costs to gain
assurance that revenue had been recognised correctly.
We have compared costs expected with post period end
results and tested a sample of forecasted costs to supporting
evidence such as purchase orders and supplier quotations;
• Tested the historical accuracy of forecasting by comparing final
results of completed contracts to original forecasts;
• Tested a sample of contracts held by the Group and
recalculated the revenue that should have been recognised
and revenue that should have been accrued/deferred in the
period; and
• Recalculated the period-end deferred income balance, and
performed procedures on a sample basis to ensure deferred
income was complete and accurate.
Relevant disclosures in the Annual Report
and Accounts 2021
• Financial statements (Group): Principal accounting
policies, significant management judgements
and estimates in applying accounting policies,
construction contract revenue.
• Financial statements (Group): Note 2, Revenue and
profit before tax.
Our results
Based on our audit work addressing the risk of inappropriate
recognition of revenue, we are satisfied that the assumptions
made by management in recognising revenue were appropriate
and in accordance with, the financial reporting framework,
including IFRS 15.
Key Audit Matter
– Group and parent company
How our scope addressed the matter
– Group and parent company
Going concern
We identified going concern as a significant risk,
which was one of the most significant assessed
risks of material misstatement.
Covid-19 and Brexit are two of the most significant
economic events for the UK, and at the date of
this report there is an unprecedented level of
uncertainty as to the ultimate impact of these
events on the group and the parent company, given
the construction sector within which they operate.
In addition to this the sector along with the wider
UK economy has encountered significant price
increases which can impact the group where they
have fixed price contracts with customers.
In undertaking their assessment of going concern
for the group and the parent company, the directors
considered the impact of Covid-19, Brexit and
materials price inflation in their forecast future
performance of the group and the parent company.
As a result of the current macro-economic
environment, there is significantly more judgment
applied in developing cash flow forecasts. The
assumptions subject to the most judgment include:
• rising steel and metal prices with fixed term
contracts;
• the current financing available to the group and
ability to meet associated debt covenants; and
• the strong order book at the year end, which is
a substantial proportion of the 2022 budgeted
turnover.
The directors have concluded, based on the various
scenarios developed, that the group and the parent
company have sufficient resources available to
meet their liabilities as they fall due for the forecast
period to April 2023, and have concluded that
there are no material uncertainties that may cast
significant doubt over the group’s and the parent
company’s ability to continue as a going concern.
In responding to the key audit matter, we performed the
following audit procedures:
• Obtained an understanding of how management prepared
their base case and sensitised forecasts for the period to April
2023;
• Assessed the accuracy of management’s forecasting by
comparing the reliability of past forecasts to management’s
actual results, and considering whether management’s historic
forecasting accuracy impacts upon the reliance we can place
upon the forecasts provided;
• Obtained an understanding of key trading, balance sheet and
cash flow assumptions and tested those key assumptions to
underlying historical financial data, post period end trading
information, contracts awarded and market analysis data;
• Assessed the terms of the external debt and correspondence
with the debt holders and challenged management’s
assessment of the availability of additional funding, where
required;
• Assessed the plausibility of the mitigating actions available
to management to continue as a going concern if downside
sensitivities were to crystalise;
• Evaluated management’s worse-case forecasts and
management’s consideration of the magnitude of a decline in
cash that would give rise to the elimination of the headroom in
the funding facilities, including performing additional sensitivity
analysis to those performed by management;
• Performed arithmetical and consistency checks on
management’s going concern base case model; and
• Assessed the adequacy of the going concern disclosures
included within the financial statements. In our evaluation
of the directors’ conclusions, we considered the inherent
risks associated with the group’s and the parent company’s
business model including effects arising from macro-economic
uncertainties such as Brexit and Covid-19, we assessed
and challenged the reasonableness of estimates made by
the directors and the related disclosures and analysed how
those risks might affect the group’s and the parent company’s
financial resources or ability to continue operations over the
going concern period.
Relevant disclosures in the Annual Report
and Accounts 2021
• Financial statements (Group and parent company):
Principal accounting policies, Going concern
• Report of the Directors: Note 5, Going concern
Our results
We have nothing to report in addition to that stated in the
‘Conclusions relating to going concern’ section of our report.
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Our application of materiality
We apply the concept of materiality both in planning and performing the audit, and in evaluating the effect of identified
misstatements on the audit and of uncorrected misstatements, if any, on the financial statements and in forming the
opinion in the auditor’s report.
Materiality was determined as follows:
Materiality measure
Group Parent Company
Materiality measure
Group Parent Company
Materiality for financial
statements as a whole
We define materiality as the magnitude of misstatement in the financial statements
that, individually or in the aggregate, could reasonably be expected to influence the
economic decisions of the users of these financial statements. We use materiality in
determining the nature, timing and extent of our audit work.
Specific materiality
We determine specific materiality for one or more particular classes of transactions,
account balances or disclosures for which misstatements of lesser amounts than
materiality for the financial statements as a whole could reasonably be expected
to influence the economic decisions of users taken on the basis of the financial
statements.
Materiality threshold
£252,000, which is 0.3% of the group’s
revenue.
£101,000, which represents 0.5% of the
parent company’s total assets.
Specific materiality threshold We determined a lower level of specific
materiality for the following areas:
We determined a lower level of specific
materiality for the following areas:
Significant judgements made
by auditor in determining the
materiality
In determining materiality, we made the
following significant judgements:
In determining materiality, we made the
following significant judgements:
Revenue is considered to be the most
appropriate benchmark because there
is considerable volatility in profit before
tax and in the variability and timing
of contract completion. Revenue is
also a key performance metric for the
company.
Materiality for the current year is higher
than the level that we determined for
the year ended 31 December 2021 to
reflect the change in benchmark used to
calculate materiality.
The parent company is a holding company
which has no trade, we therefore considered
total assets to be the most appropriate
benchmark for the company.
Materiality for the current year is lower than
the level that we determined for the year
ended 31 December 2020 to reflect the year
on year decrease in total assets.
Performance materiality
used to drive the extent
of our testing
We set performance materiality at an amount less than materiality for the financial
statements as a whole to reduce to an appropriately low level the probability that the
aggregate of uncorrected and undetected misstatements exceeds materiality for the
financial statements as a whole.
Performance materiality
threshold
£189,000, which is 75% of financial
statement materiality.
£76,000, which is 75% of financial statement
materiality.
Significant judgements made
by auditor in determining the
performance materiality
In determining performance materiality,
we made the following significant
judgements:
We assessed the the strength of the
control environment, including the effect
of misstatements identified in previous
audits, to make our judgement.
In determining performance materiality, we
made the following significant judgements:
We assessed the the strength of the
control environment, including the effect of
misstatements identified in previous audits,
to make our judgement.
• Directors remuneration
• Directors remuneration
• Related party transactions
• Related party transactions
Communication of
misstatements to the
audit committee
We determine a threshold for reporting unadjusted differences to the audit committee.
Threshold for communication £12,600 and misstatements below that
threshold that, in our view, warrant
reporting on qualitative grounds.
£5,050 and misstatements below that
threshold that, in our view, warrant reporting
on qualitative grounds.
The graph below illustrates how performance materiality interacts with our overall materiality and the tolerance for
potential uncorrected misstatements.
Overall materiality - Group
Overall materiality - Parent company
Total revenue £82.7m
FSM £252,000 0.3%
PM £189,000 75%
TFPUM £63,000 25%
Total assets £20.1m
FSM £101,000 0.5%
PM £76,000 75%
TFPUM £25,000 25%
FSM: Financial statements materiality, PM: Performance materiality, TFPUM: Tolerance for potential uncorrected misstatements
31
32
An overview of the scope of our audit
Other information
The directors are responsible for the other information.
The other information comprises the information included
in the Annual Report and Financial Statements, other than
the financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover
the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form
of assurance conclusion thereon.
In connection with our audit of the financial statements,
our responsibility is to read the other information and,
in doing so, consider whether the other information is
materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears
to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we
are required to determine whether there is a material
misstatement in the financial statements or a 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 report of the directors for the financial year
for which the financial statements are prepared is
consistent with the financial statements; and
• the strategic report and the report of the directors
have been prepared in accordance with applicable
legal requirements.
Matter 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
report of the directors.
We performed a risk-based audit that requires an
understanding of the group’s and the parent company’s
business and in particular matters related to:
Understanding the group, its components, and their
environments, including group-wide controls
• the engagement team obtained an understanding
of the group and its environment, including group-
wide controls, and assessed the risks of material
misstatement at the group level, and;
• the engagement team obtained an understanding of the
effect of the group organisational structure on the scope
of the audit, for example, the level of centralisation of
the group control function.
• we performed walkthroughs of key areas of focus,
including significant risks, in order to confirm our
understanding of the control environment across the
group.
Identifying significant components
• the engagement team evaluated the identified
components to assess their significance and
determined the planned audit response based on a
measure of materiality. Significance was determined as
a percentage of the group’s revenues and qualitative
factors, such as component’s specific nature or
circumstances.
Type of work to be performed on financial information of
the parent and the other components (including how it
addressed the key audit matters)
• the engagement team performed a full-scope audit of
the financial statements of the parent company and the
two directly held trading subsidiaries;
• the engagement team performed specific-scope
audit procedures on two further directly held trading
subsidiaries; and
• the engagement team performed analytical procedures
on one further held trading subsidiary.
Performance of our audit
• both key audit matters were addressed with the full
scope audits. There were no key audit matters that
related directly to the parent company, Billington
Holdings Plc;
• all audit procedures across all components were
performed by the group engagement team in line with
the scope described. There were no component teams
engaged to support the primary team.
Audit
approach
No. of
components
% coverage
total assets
% coverage
revenue
Full-scope
audit
Specific
scope audit
Analytical
procedures
Total
3
2
1
6
84%
16%
0%
89%
11%
0%
100%
100%
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
group and 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
Explanation as to what extent the audit was
considered capable of detecting irregularities,
including fraud
Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of
irregularities, including fraud. Owing to the inherent
limitations of an audit, there is an unavoidable risk that
material misstatements in the financial statements may
not be detected, even though the audit is properly
planned and performed in accordance with ISAs (UK).
• certain disclosures of directors’ remuneration specified
by law are not made; or
The extent to which our procedures are capable of
detecting irregularities, including fraud, is detailed below:
• We obtained an understanding of the legal and
regulatory frameworks that are applicable to the group
and parent company and determined that the most
significant are those related to the reporting frameworks
which are UK-adopted international accounting
standards for the group financial statements, United
Kingdom Generally Accepted Accounting Practice
for the parent company financial statements and the
Companies Act 2006, as well as the relevant tax
regulations. Other legal and regulatory frameworks that
are applicable to the group and parent company are
health and safety employment and data protection laws.
• We communicated relevant laws and regulations and
potential fraud risks to all engagement team members
and remained alert to indications of fraud or non-
compliance with laws and regulations throughout the
audit.
• We enquired of management whether they were aware
of any instances of non-compliance with laws and
regulations or whether they had any knowledge of
actual, suspected, or alleged fraud. We corroborated
our enquiries through our review of board minutes.
• We assessed the susceptibility of the group and parent
company financial statements to material misstatement,
including how fraud might occur by meeting with
management from relevant parts of the business to
understand where management considered there
was a susceptibility to fraud, including evaluation
of management's incentives and opportunities for
manipulation of the financial statements. We also
considered performance targets and their influence on
efforts made by management to manage earnings or
influence the perceptions of analysts.
• we have not received all the information and
explanations we require for our audit.
Responsibilities of directors for the financial
statements
As explained more fully in the statement of directors’
responsibilities, the directors are responsible for the
preparation of the financial statements and for being
satisfied that they give a true and fair view, and for such
internal control as the directors determine is necessary
to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, the directors are
responsible for assessing the group’s and the parent
company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting
unless the directors either intend to liquidate the group
or the parent company or to cease operations, or have no
realistic alternative but to do so.
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 financial statements.
A further description of our responsibilities for the audit
of the financial statements is located on the Financial
Reporting Council’s website at: www.frc.org.uk/
auditorsresponsibilities. This description forms part of our
auditor’s report.
33
34
B3 Thorpe Park, Leeds
• Assessment of the appropriateness of the collective
• In assessing the potential risks of material misstatement,
competence and capabilities of the engagement team
including consideration of the engagement team's:
- understanding of, and practical experience with audit
engagements of a similar nature and complexity through
appropriate training and participation;
- knowledge of the industry in which the client operates;
and
- understanding of the legal and regulatory requirements
specific to the company including:
- the provisions of the applicable legislation;
- the regulators rules and related guidance,
including guidance issued by relevant authorities
that interprets those rules; and
- the applicable statutory provisions
• Audit procedures performed by the engagement team
included:
- evaluation of the prcoedures and controls established to
address the risks related to irregularities and fraud; and
- testing manual journal entries, in particular journal
entries relating to management estimates and
entries determined to be large or relating to unusual
transactions;
- identification and testing of transactions recorded by
senior finance personnel; and
- identifying and testing related party transactions,
focusing specifically on those transactions outside the
normal course of business where identified.
• These audit procedures were designed to provide
reasonable assurance that the financial statements
were free from fraud or error. The risk of not detecting
a material misstatement due to fraud is higher than
the risk of not detecting one resulting from error
and detecting irregularities that result from fraud is
inherently more difficult than detecting those that result
from error, as fraud may involve collusion, deliberate
concealment, forgery or intentional misrepresentations.
Also, the further removed non-compliance with laws and
regulations is from events and transactions reflected
in the financial statements, the less likely we would
become aware of it.
we obtained an understanding of:
- the group's and parent company’s operations, including
the nature of its revenue sources, products and services
and of its objectives and strategies to understand the
classes of transactions, account balances, expected
financial statement disclosures and business risks that
may result in risks of material misstatement;
- the applicable statutory provisions; and
- the group’s and parent company’s control environment,
including the adequacy of the training to inform staff
of the relevant legislation, rules and other regulations
of the regulator, the adequacy of procedures for
authorisation of transactions, internal review procedures
over the company’s compliance with regulatory
requirements, the authority of, and procedures to
ensure that possible breaches of requirements are
appropriately investigated and reported.
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.
Victoria McLoughlin
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Leeds
25 April 2022
35
36
Urban Hub Project, Preston
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2021
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME FOR THE
YEAR ENDED 31 DECEMBER 2021
Revenue
Raw materials and consumables
Other external charges
Staff costs
Depreciation
Other operating charges
Impairment losses
Operating Profit
Net finance (expense)/income
Profit before tax
Tax
Profit for the year
Profit for the year attributable to equity holders
of the parent company
Earnings per share (basic and diluted)
All results arose from continuing operations.
Note
Underlying Non-Underlying
2021
£’000
2021
£’000
Total
2021
£’000
2020
£’000
2
82,720
(55,784)
(4,542)
(16,268)
(1,960)
(2,827)
-
(81,381)
1,339
(37)
1,302
(324)
978
978
3
2
2
4
2
5
7
-
-
-
-
-
-
(1,123)
(1,123)
(1,123)
-
(1,123)
213
(910)
82,720
65,955
(55,784)
(40,514)
(4,542)
(3,917)
(16,268)
(16,028)
(1,960)
(1,911)
(2,827)
(1,926)
(1,123)
-
(82,504)
(64,296)
216
(37)
179
(111)
68
1,659
8
1,667
(298)
1,369
(910)
68
1,369
0.6p
11.3p
The statement of accounting policies and notes 1 to 27 form part of these Group financial statements.
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
Other comprehensive income, net of tax
Total comprehensive income for the year attributable to equity
holders of the parent company
Note
23
18
2021
£’000
68
1,023
(348)
675
743
2020
£’000
1,369
(526)
100
(426)
943
The statement of accounting policies and notes 1 to 27 form part of these Group financial statements.
37
38
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
AS AT 31 DECEMBER 2021
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY FOR THE YEAR
ENDED 31 DECEMBER 2021
Assets
Non current assets
Property, plant and equipment
Pension asset
Investments in joint ventures
Total non current assets
Current assets
Inventories
Contract work in progress
Trade and other receivables
Current tax receivable
Cash and cash equivalents
Total current assets
Total assets
Liabilities
Current liabilities
Current portion of long term borrowings
Trade and other payables
Lease liabilities
Total current liabilities
Non current liabilities
Long term borrowings
Deferred tax liabilities
Total non current liabilities
Total liabilities
Net assets
Equity
Share capital
Share premium
Capital redemption reserve
Other components of equity
Retained earnings
Total equity
Note
2021
2020
£’000
£’000
£’000
£’000
8
23
25
11
12
13
15
17
14
22
14,854
2,673
-
17,527
35,428
52,955
1,894
10,257
12,216
679
10,382
250
21,455
-
14,536
1,683
-
16,219
33,340
49,559
908
4,170
12,876
260
15,126
250
18,607
9
21,705
18,866
16, 17
18
750
1,108
1,000
476
20
1,858
23,563
29,392
1,293
1,864
132
(770)
26,873
29,392
1,476
20,342
29,217
1,293
1,864
132
(783)
26,711
29,217
The Group financial statements were approved and authorised for issue by the Board of Directors on 25 April 2022.
Ian Lawson
Non-Executive Chairman
Trevor Taylor
Chief Financial Officer
The statement of accounting policies and notes 1 to 27 form part of these Group financial statements.
At 1 January 2020
Transactions with owners
Credit relating to equity-settled
share based payments
ESOT movement in year
Transactions with owners
Profit for the financial year
Other comprehensive income
Actuarial losses recognised in the
pension scheme
Income tax relating to components
of other comprehensive income
Total comprehensive income
for the year
Share
capital
£’000
Share
premium
£’000
Capital
redemption
reserve
£’000
Other
components
of equity
£’000
Retained
earnings
£’000
Total
equity
£’000
1,293
1,864
132
(820)
25,624
28,093
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
37
37
-
-
-
-
181
(37)
144
181
-
181
1,369
1,369
(526)
(526)
100
943
100
943
At 31 December 2020
1,293
1,864
132
(783)
26,711
29,217
At 1 January 2021
Transactions with owners
Dividends (note 6)
Debit relating to equity-settled
share based payments
ESOT 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
Total comprehensive income
for the year
Share
capital
£’000
Share
premium
£’000
Capital
redemption
reserve
£’000
Other
components
of equity
£’000
Retained
earnings
£’000
Total
equity
£’000
1,293
1,864
132
(783)
26,711
29,217
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
13
13
-
-
-
-
(515)
(515)
(53)
(13)
(581)
68
(53)
-
(568)
68
1,023
1,023
(348)
(348)
743
743
At 31 December 2021
1,293
1,864
132
(770)
26,873
29,392
The Group retained earnings reserve includes a surplus of £2,005,000 (2020 - £1,363,000) relating to the net pension surplus (note 23).
The statement of accounting policies and notes 1 to 27 form part of these Group financial statements.
39
40
Thanckes Oil Fuel Depot
CONSOLIDATED CASH FLOW
STATEMENT FOR THE YEAR ENDED
31 DECEMBER 2021
Note
Cash flows from operating activities
Group profit after tax
Taxation paid
Interest received
Depreciation on property, plant and equipment
8
Share based payment charge (credit)/charge
Profit on sale of property, plant and equipment
Taxation charge recognised in income statement
Net finance expense/(income)
(Increase)/decrease in inventories and contract work in progress
Decrease/(increase) in trade and other receivables
Increase/(decrease) 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
Proceeds of bank and other loans
Repayment of bank and other loans
Capital element of leasing payments
Dividends paid
Net cash flow from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
6
26
The statement of accounting policies and notes 1 to 27 form part of these Group financial statements.
2021
£’000
68
(246)
21
1,960
(53)
(221)
111
37
(7,073)
660
2,848
(1,888)
(2,351)
294
(2,057)
(25)
-
(250)
(9)
(515)
(799)
(4,744)
15,126
10,382
2020
£’000
1,369
(844)
41
1,911
181
(274)
298
(8)
3,264
(5,526)
(826)
(414)
(2,216)
294
(1,922)
(37)
1,250
(1,500)
(107)
-
(394)
(2,730)
17,856
15,126
41
42
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 UK-adopted international accounting standards and are effective from
1 January 2021. The accounting policies have been applied consistently throughout
the Group for the purposes of preparation of these consolidated financial
statements.
Going concern
(a) Changes in accounting policies
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 continued positive
underlying trading performance in 2021 are detailed in
the Financial Review and they demonstrate the robust
position of the Group heading into 2022.
The Group has a gross cash balance of £10.4 million at 31
December 2021 and no significant long-term borrowings
or commitments.
The Directors have prepared forecasts covering the
period to April 2023 and approved by the Board in March
2022. Whereas restrictions are easing within the UK and
the construction industry output increases there remains
some residual uncertainty as to the future impact on
the Company of Covid-19. The residual uncertainty has
been separately considered as part of the Directors'
consideration of the going concern basis of preparation.
The success of the vaccine roll out programme, combined
with the continued easing of restrictions, provides an
increased degree of confidence moving into 2022.
Industry projections (issued in January 2022) indicate
that output increased 16.8% in 2021 and a further 10.5%
anticipated in 2022. Furthermore, the current order book
secured for 2022 allows the Group to look forward with
an increasing degree of optimism.
Material price volatility and availability has been
affected through the onset of the conflict in Ukraine. The
Company's primary input materials relating to contracts
are that of steel sections and plate. The Company has
sought to agree fixed prices with its suppliers and
forward purchase sufficient quantity of these materials
to provide certainty the Company is able to meet its
contractual obligations.
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.
New and revised standards that are effective for
annual periods beginning on or after 1 January 2021
Accounting pronouncements which have become
effective from 1 January 2021 and have therefore been
adopted do not have a significant impact on the Group's
financial results or position.
(b) Basis of consolidation
The Group financial statements consolidate those of the
Parent Company and all of its subsidiary undertakings.
Subsidiaries are entities over which the Group has the
power to control the financial and operating policies so as
to obtain benefits from its activities. The Group obtains
and exercises control through voting rights.
Income, expenditure, unrealised gains and intra-group
balances arising from transactions within the Group are
eliminated. Unrealised losses are also eliminated unless
the transaction provides evidence of an impairment of the
assets transferred. Amounts in the financial statements
of subsidiaries have been adjusted where necessary to
ensure consistency with the accounting policies adopted
by the Group.
Acquisitions of subsidiaries are dealt with by the
acquisition method. The acquisition method involves
the recognition at fair value of all identifiable assets and
liabilities, including contingent liabilities of the subsidiary,
at the acquisition date, regardless of whether or not
they were recorded in the financial statements of the
subsidiary prior to acquisition. On initial recognition, the
assets and liabilities of the subsidiary are included in the
consolidated balance sheet at their fair values, which are
also used as the bases for subsequent measurement in
accordance with the Group accounting policies. Goodwill
is stated after separating out identifiable intangible assets.
Goodwill represents the excess of the fair value of the
consideration transferred to the vendor over the fair value
of the Group's share of the identifiable net assets of the
acquired subsidiary at the date of acquisition.
(c) Revenue
Revenue arises mainly from contracts for the design,
fabrication and erection of structural steelwork. To
determine whether to recognise revenue, the Group
follows a 5-step process:
1. Identifying the contract with a customer
2. Identifying the performance obligations
3. Determining the transaction price
4. Allocating the transaction price to the performance
obligations
5. Recognising revenue when/as performance
obligation(s) are satisfied.
The Group often enters into transactions involving a
range of the Group’s products and services, for example
for the design and construction of a steel frame, along
with secondary steelwork packages and edge protection.
In all cases, the total transaction price for a contract is
allocated amongst the various performance obligations
based on their relative stand-alone selling prices.
Revenue is recognised either at a point in time or over
time, when (or as) the Group satisfies performance
obligations by transferring the promised goods or
services to its customers in accordance with IFRS15.35 (c).
The Group recognises contract liabilities for consideration
received in respect of unsatisfied performance
obligations and reports these amounts within trade
and other payables in the statement of financial
position. Similarly, if the Group satisfies a performance
obligation before it receives the consideration, the
Group recognises either contract work in progress
or a receivable in its statement of financial position,
depending on whether something other than the passage
of time is required before the consideration is due.
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.
To depict the progress by which the Group transfers
control of the construction to the customer, and to
establish when and to what extent revenue can be
recognised, the Group measures its progress towards
complete satisfaction of the performance obligation
by use of the input method cost-to-cost percentage
of completion approach. However, in the early stages
of a contract when there is uncertainty in reasonably
being able to measure the outcome of a performance
obligation, but the Company expects to recover the costs
incurred in satisfying the performance obligation, revenue
is recognised only to the extent of the costs incurred until
such time that the outcome of the performance obligation
can be reliably measured. Revenue is only recognised
to the extent that it is highly probable that a significant
reversal in the amount of cumulative revenue recognised
will not occur.
The transaction price is measured based on the
consideration specified in a contract with a customer and,
where applicable, the best estimate of any consideration
related to modifications to the contract, which have yet to
be agreed. Where a modification to an existing contract
occurs, the Group assesses the nature of the modification
and whether it represents a separate performance
obligation required to be satisfied or whether it is a
modification to the existing performance obligation. This
method is considered to most faithfully depict the transfer
of goods and services to the customer over the life of the
performance obligation.
The construction of structural steel frames normally takes
6–12 months from commencement of design through to
completion of installation. As the period of time between
customer payment and performance will always be one
year or less, the Group applies the 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 incremental costs, such as commissions paid to
sales staff. As the amortisation period of these costs,
if capitalised, would be less than one year, the Group
makes use of the practical expedient in IFRS 15.94 and
expenses them as they incur.
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.
Losses are calculated and recognised using the full cost
approach and are separately disclosed within trade and
other payables.
Safety solutions
Revenue from the sale or hire of safety solutions for a
fixed fee is recognised when or as the Group transfers
control of the assets to the customer. Invoices for goods
or services transferred are due upon receipt by the
customer.
For stand-alone sales of safety solutions, control transfers
at the point in time the installation is complete and hand-
over is signed by the customer.
In the case of asset rentals relating to the use of the
Group's safety solutions products, revenue is charged to
customers on a time accrual basis.
Other sales
In all other cases, revenue represents the transaction
price of 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 of the
goods.
The Group does not recognise the revenue and profit
attributable to claims and disputed amounts on contracts
until the recovery of these amounts is considered
probable and when the outcome can be estimated
reliably.
43
44
(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 and assets
under construction) less estimated residual 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.
The rates applicable are:
Freehold and long leasehold property
2% to 4%
Plant, equipment and vehicles
5% to 40%
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
Inventories 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.
(f) Contract work in progress
Contract work in progress represents when the Group
satisfies a performance obligation before it receives
the consideration. The Group recognises either work
in progress or a receivable in its statement of financial
position, depending on whether something other than the
passage of time is required before consideration is due. A
receivable is usually recognised once works are certified
by a customer.
(g) Taxation
Current tax is the tax currently payable based on taxable
profit for the year.
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 (ie actuarial
gains and losses) in which case the related deferred tax is
also recognised in other comprehensive income.
(h) 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.
The current service cost, past service cost and costs from
settlements and curtailments are charged against other
operating charges. Interest on the scheme liabilities and
the expected return on scheme assets are included in
other finance income/costs.
Short-term employee benefits, including holiday
entitlement, are included in current pension and other
employee obligations at the undiscounted amount that
the Group expects to pay as a result of the unused
entitlement.
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.
( j) 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. 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.
(k) Foreign currencies
Transactions in foreign currencies are translated at
the exchange rate ruling at the date of the transaction.
Monetary assets and liabilities in foreign currencies are
translated at the rates of exchange ruling at the balance
sheet date. All foreign exchange differences are dealt
with through the income statement, unless subject to
hedging arrangements.
(l) Joint ventures
Joint ventures are entities over which the Group holds
a contractual share of joint control. The Group financial
statements incorporate joint ventures under the equity
method of accounting, supplemented by additional
disclosures.
The Group's share of the profits, losses, finance income,
finance cost and taxation of joint ventures are included in
the Group income statement. The Group balance sheet
includes the investment in joint ventures at the Group's
share of net assets.
(i) Leased assets
The Group assesses whether a contract is or contains a
lease at inception of the contract. 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 contract contains an identified asset, which is either
explicitly identified in the contract or implicitly specified
by being identified at the time the asset is made
available to the Group
• the Group has the right to obtain substantially all of
the economic benefits from use of the identified asset
throughout the period of use, considering its rights
within the defined scope of the contract
• the Group has the right to direct the use of the identified
asset throughout the period of use. The Group assess
whether it has the right to direct ‘how and for what
purpose’ 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.
Lease payments included in the measurement of the
lease liability are made up of fixed payments (including in
substance fixed), variable payments based on an index
or rate, amounts expected to be payable under a residual
value guarantee and payments arising from options
reasonably certain to be exercised.
Subsequent to initial measurement, the liability will
be reduced 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.
When the lease liability is remeasured, the corresponding
adjustment is reflected in the right-of-use asset, or profit
and loss if the right-of-use asset is already reduced to
zero.
45
46
(m) Financial instruments
Recognition and derecognition
Financial assets and financial liabilities are recognised
when the Group becomes a party to the contractual
provisions of the financial instrument.
Financial assets are recognised initially at fair value plus
transaction costs.
Financial assets are derecognised when the contractual
rights to the cash flows from the financial asset expire,
or when the financial asset and substantially all the
risks and rewards are transferred. A financial liability
is derecognised when it is 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:
• amortised cost
• fair value through profit or loss (FVTPL)
• 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:
• the entity’s business model for managing the financial
asset
• the contractual cash flow characteristics of the financial
asset.
All income and expenses relating to financial assets
that are recognised in profit or loss are presented within
finance costs, finance income or other financial items,
except for impairment of trade receivables which is
presented within other expenses.
Subsequent measurement of financial assets
Financial assets at amortised cost
Financial assets are measured at amortised cost if
the assets meet the following conditions (and are not
designated as FVTPL):
• 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 flows that are solely payments of principal and
interest on the principal amount outstanding
After initial recognition, these are measured at amortised
cost using the effective interest method. Discounting is
omitted where the effect of discounting is immaterial. The
Group’s cash and cash equivalents, trade and most other
receivables fall into this category of financial instruments.
Impairment of financial assets
IFRS 9’s impairment requirements use forward-looking
information to recognise expected credit losses – the
‘expected credit loss (ECL) model’. Instruments within
the scope of the requirements include loans and other
debt-type financial assets measured at amortised cost
and FVOCI, trade receivables, contract work in progress
recognised and measured under IFRS 15 and loan
commitments and some financial guarantee contracts
(for the issuer) that are not measured at fair value through
profit or loss.
Recognition of credit losses is not dependent on the
Group 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.
In applying this forward-looking approach, a distinction is
made between:
• 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’).
‘Stage 3’ would cover financial assets that have objective
evidence of impairment at the reporting date.
‘12-month expected credit losses’ are recognised for the
first category while ‘lifetime expected credit losses’ are
recognised for the second category.
Measurement of the expected credit losses is determined
by a probability-weighted estimate of credit losses over
the expected life of the financial instrument.
Trade and other receivables and contract work in
progress
Trade receivables are initially measured at the transaction
price upon inception.
The Group makes use of a simplified approach in
accounting for trade and other receivables as well as
contract work in progress and records the loss allowance
as lifetime expected credit losses. These are the
expected shortfalls in contractual cash flows, considering
the potential for default at any point during the life of the
financial instrument. In calculating, the Group uses its
historical experience, external indicators and forward-
looking information to calculate the expected credit
losses using a provision matrix.
The Group assess impairment of trade receivables on
a collective basis as they possess shared credit risk
characteristics they have been grouped based on the
days past due. Refer to note 19 for a detailed analysis of
how the impairment requirements of IFRS 9 are applied.
Classification and measurement of financial
liabilities
The Group’s financial liabilities include borrowings, trade
and other payables and derivative financial instruments.
Financial liabilities are initially measured at fair value, and,
where applicable, adjusted for transaction costs unless
the Group designated a financial liability at fair value
through profit or loss.
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. However, if a non-financial
asset or liability is recognised as a result of the hedged
transaction, the gains and losses previously recognised
in other comprehensive income are included in the initial
measurement of the hedged item.
Subsequently, financial liabilities are measured at
amortised cost using the effective interest method except
for derivatives 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).
If a forecast transaction is no longer expected to
occur, any 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.
All interest-related charges and, if applicable, changes in
an instrument’s fair value that are reported in profit or loss
are 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 as hedging instruments in cash
flow hedge relationships, which require a specific
accounting treatment. To qualify for hedge accounting,
the hedging relationship must meet all of the following
requirements:
(n) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and
demand deposits.
(o) Dividends
Dividend distributions payable to equity shareholders
are included in "trade and other payables" when the
dividends are approved in general meeting prior to the
balance sheet date, and are debited direct to equity
within retained earnings.
• there is an economic relationship between the hedged
(p) Equity
item and the hedging instrument
• the effect of credit risk does not dominate the value
changes that result from that economic relationship
• the hedge ratio of the hedging relationship is the same
as that resulting from the quantity of the hedged item
that the entity actually hedges and the quantity of the
hedging instrument that the entity actually uses to
hedge that quantity of hedged item.
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.
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.
Equity comprises the following:
"Called up share capital" represents the nominal value of
equity shares.
"Share premium" represents the excess over nominal
value of the fair value of consideration received for equity
shares, net of expenses of the share issue.
"Capital redemption reserve" represents the purchase
cost of shares repurchased by the Group in 1998
"Other components of equity" represents the purchase
cost of the shares held within the Employee Share
Ownership Trust (ESOT) and the cash flow hedge reserve
(see note 20).
"Retained earnings" represents retained profit, and gains
and losses due to the revaluation of certain property,
plant and equipment prior to the implementation of IFRS.
47
48
(q) Government grants
Government grant income is recognised at the point that
there is reasonable assurance that the Group will comply
with the conditions attached to it and that the grant
will be received. During the prior year Coronavirus Job
Retention Scheme ('CJRS') income has been received
and accounted for under the IAS 20 grants relating to
income approach. Grant income is included within other
operating charges in the profit and loss.
(r) Segmental reporting
In identifying its operating segments, management
follows the Group's service lines, which represent the
main products and services provided by the Group.
The disclosure is based on the information that is
presented to the chief operating decision maker, which
is considered to be the executive board of Billington
Holdings Plc. There have been no changes from prior
periods in the measurement methods used to determine
segment profit or loss.
(s) Standards and Interpretations objectives
in issue not yet effective
At the date of authorisation of these financial statements,
several new, but not yet effective, Standards,
amendments to existing Standards, and Interpretations
have been published by the IASB. None of these
Standards, amendments or Interpretations have been
adopted early by the Group.
Management anticipates that all relevant
pronouncements will be adopted for the first period
beginning on or after the effective 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.
(t) Significant management judgements 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 and overall
contract outcome
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. 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.
When assessing the likely financial outcome of a project
the assessment is made at a point in time using all the
information available to management to arrive at a
probable outcome. The financial assessment of a project
can be subject to material movements as the contract
progresses and additional information becomes available.
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. Information about significant
judgements, estimates and assumptions that have the
most significant effect on recognition and measurement
of assets, liabilities, income and expenses are discussed
below.
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.
The useful economic life of assets utilised by the
Company is assessed using the specialist knowledge
within the business. Some of the Company's machinery
and hire assets are bespoke and unique to the Company
and therefore judgement is applied when the useful
economic life is assessed.
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 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
statements.
The defined benefit pension scheme was closed to future
accrual in 2011.
(u) 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.
(v) Non-underlying items
Non-underlying items have been separately identified
to provide a better indication of the Group’s underlying
business performance. They are not considered to be
‘business as usual’ items and have a varying impact on
different businesses and reporting periods.
Non-underlying items are presented as a separate
column within their related consolidated income
statement category. Their separate identification results
in the calculation of an underlying profit measure
in the same way as it is presented and reviewed by
management.
Items that may give rise to classification as non-
underlying are any significant items that are considered
one-off and non-recurring.
The board believes that non-underlying items should be
separately identified on the face of the income statement
to assist in understanding the underlying performance
of the Group. Their separate identification results in the
calculation of an underlying profit measure, which is the
same as that presented and reviewed by management.
Accordingly, certain alternative performance measures
(‘APMs’) have been used throughout this annual report to
supplement rather than replace the measures provided
under IFRS.
49
National Space Centre, Leicester
50
NOTES FORMING PART OF THE GROUP
FINANCIAL STATEMENTS FOR THE YEAR
ENDED 31 DECEMBER 2021
1. Segmental information
The Group trading operations of Billington Holdings Plc
are in Structural Steelwork and Safety Solutions, and all are
continuing. The Structural Steelwork segment includes the
activities of Billington Structures Limited and Peter Marshall
Steel Stairs Limited, and the Safety Solutions segment
includes the activities of Easi-Edge Limited and Hoard-it
Limited. The Group activities, comprising services and
assets provided to Group companies and a small element
of external property rentals and management charges, are
shown in Other. All assets of the Group reside in the UK.
31 December 2021
Segment revenues
Raw materials and consumables
Other external charges
Staff costs
Depreciation
Other operating charges
Segment operating profit/(loss) - underlying
Impairment losses - non-underlying
Segment operating profit/(loss)
31 December 2020
Segment revenues
Raw materials and consumables
Other external charges
Staff costs
Depreciation
Other operating charges
Segment operating profit
Structural
steelwork
£’000
Safety
solutions
£’000
Central
£’000
Total
£’000
73,960
(52,948)
(3,261)
(13,008)
(663)
(4,096)
(16)
(1,123)
(1,139)
58,591
(38,534)
(2,748)
(12,811)
(636)
(3,475)
387
8,760
(2,836)
(1,281)
(1,623)
(1,023)
(756)
1,241
-
1,241
7,364
(1,980)
(1,169)
(1,612)
(972)
(389)
1,242
-
-
-
(1,637)
(274)
2,025
114
-
114
-
-
-
(1,605)
(303)
1,938
30
82,720
(55,784)
(4,542)
(16,268)
(1,960)
(2,827)
1,339
(1,123)
216
65,955
(40,514)
(3,917)
(16,028)
(1,911)
(1,926)
1,659
2. Revenue and profit before tax
Revenue and profit before tax are attributable to the
Group's continuing operations. Two customers included
within the structural steel sector accounted for greater
than 10% of the Group's revenue. The contractors
accounted for 14% and 10% respectively (2020: two
contractors greater than 10% with 15% and 11% respectively)
of Group revenue. One of contractors with revenue of
greater than 10% in 2020 is also one of the customers
with revenue of greater than 10% in 2021. Revenue
from contracts with customers and from hire revenue is
recognised over time and revenue from other sources is
recognised at a point in time.
Analysis of revenue (excluding movement in work in progress):
31 December 2021
United Kingdom
31 December 2020
United Kingdom
Europe
Structural Steelwork
Safety Solutions
Contracts with
customers
£’000
Other sources
of revenue
£’000
Hire
revenue
£’000
Other sources
of revenue
£’000
Total
£’000
71,845
71,845
52,632
4,072
56,704
2,115
2,115
1,887
-
1,887
6,055
6,055
5,183
-
5,183
2,705
2,705
82,720
82,720
2,181
-
61,883
4,072
2,181
65,955
Information about contract balances
Contract work in progress
Contract work in progress - impairment losses
Contract receivables
Contract receivables - impairment losses
Contract liabilities
Combined contract work in progress and contract
receivables have increased due to increased workload
at the year end and timing of contracts with a significant
amount of advanced steel purchased. Contract liabilities
have increased due to the timing of contract progress
at the year end and the performance obligations not yet
satisfied at that point.
Included within contract liabilities at the beginning of
the financial year was £1,939,000 of which £1,939,000
has been recognised as revenue for the year ended 31
December 2021.
2021
£’000
11,215
(958)
8,454
(242)
(2,052)
2020
£’000
4,170
-
9,830
(235)
(1,939)
There was no revenue recognised in the reporting period
from performance obligations satisfied or partially satisfied
in previous periods.
Information about performance obligations and
significant judgements
Contracts with customers are typically for the construction
of structural steelwork. 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 or by measure of
costs incurred.
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
the audit of the company's subsidiaries - non-reoccurring
tax compliance
other services
Depreciation
Foreign exchange (gains)/losses
Government grants - CJRS
Profit on disposal of property, plant and equipment
2021
£’000
2020
£’000
55
60
30
6
-
1,960
92
-
(221)
37
41
-
11
1
1,911
(207)
(730)
(274)
51
The non-underlying item separately identified on the face of the income statement in the current year is a one-off
significant impairment loss of £1,123,000 against a trade receivables and contract work in progress due to a customer
entering administration.
52
3. Staff costs
Staff costs during the year including Directors:
Wages and salaries
Social security
Pension costs
Share-based payments
2021
£’000
14,343
1,408
570
(53)
16,268
2020
£’000
13,917
1,378
552
181
16,028
4. Net finance (expense)/income
Payable on bank loans and overdrafts
Interest expense for leasing arrangements
Receivable on bank balances
Other finance (expense)/income - pension scheme (see note 23)
Net finance (expense)/income
The average number of production employees of the Group during the year was 183 (2020 - 185).
The average number of administration employees of the Group during the year was 189 (2020 - 194).
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:
Salary
and fees
£’000
Other
emoluments
£’000
Pension
£’000
Total
2021
£’000
Total
2020
£’000
249
181
66
40
40
25
601
42
35
2
1
-
-
80
18
27
-
-
-
-
45
Executive
M. Smith
T. M. Taylor
Non-executive
I. Lawson
J.S. Gordon
S.J. Wardell
A. Ospelt
Employer’s NI
Share based payment
Key management personnel compensation
Short-term employee benefits
Post-employment benefits
Share-based payment
309
243
68
41
40
25
726
85
(13)
798
766
45
(13)
798
280
218
62
37
36
12
645
76
127
848
681
40
127
848
Other emoluments received consist of the provision for private medical care, bonuses and motor car allowances.
During the year two Directors (2020: two Directors) exercised share options with a total gain on exercise of £42,000
(£24,000 related to the highest paid director).
During the year no Directors (2020: no Directors) participated in defined benefit pension schemes and two Directors
(2020: two Directors) participated in a defined contribution pension scheme.
2021
£’000
(25)
-
21
(33)
(37)
2020
£’000
(35)
(2)
41
4
8
2021
£’000
2020
£’000
(169)
4
(165)
284
(8)
111
(68)
-
(68)
364
2
298
2020
£’000
1,667
317
3
31
2
26
(81)
298
5. Tax on profit
The tax charge represents:
Corporation tax at 19% (2020 - 19%)
Adjustments in respect of prior years
Total current tax
Deferred tax charge at 25% (2020 - 19%)
Adjustments in respect of prior years
Total tax charge for the year
The tax assessed for the year is at the standard rate of corporation tax in the United Kingdom of 19% (2020: 19%).
The differences are explained as follows:
Profit before tax
Profit multiplied by the standard rate of corporation tax in the
United Kingdom of 19% (2020: 19%)
Effects of:
expenses not deductible for tax purposes
fixed asset differences
adjustments to tax charge in respect of prior years
rate differences
other adjustments
Total tax charge for the year
2021
£’000
179
34
15
(18)
(4)
120
(36)
111
53
54
6. Dividends
9. Investments
A final dividend has been proposed in respect of 2021 of 3.0 pence per ordinary share (£388,000) (2020: 4.25 pence)
per ordinary share (£550,000). As the distribution of dividends by Billington Holdings Plc requires approval at the
shareholders' meeting, no liability in this respect is recognised in the consolidated financial statements.
All Group companies have only ordinary shares in issue, are registered in England and Wales and have the same
registered office as the parent Company.
The subsidiary undertakings and joint ventures are as follows:
7. Earnings per share
Underlying
2021
Non-underlying
2021
Total 2021
2020
Earnings per share (basic and diluted)
8.1p
(7.5)p
0.6p
11.3p
Earnings per share and underlying earnings per share are calculated by dividing the profit for the year of £68,000 and
underlying profit for the year of £886,000 respectively (2020: profit - £1,369,000) by 12,106,797 (2020: 12,082,548) fully
paid ordinary shares, being the weighted average number of ordinary shares in issue during the year, excluding those
held in the ESOT.
Activity
Proportion of shares held by
Company
%
Group
%
Continuing
Billington Structures Limited
Easi-Edge Limited
Peter Marshall Steel Stairs Limited
Hoard-it Limited
Structural steel
Safety solutions
Structural steel
Site hoarding solutions
There is no impact on a full dilution of the earnings per share calculation as there are no potentially dilutive ordinary shares.
Specialist Protective Coatings Limited
Specialist treatment applicator
Billington Fleet Management Limited
Vehicle leasing solutions
Shafton Steel Limited
Shafton Steel Services Limited
Tubecon Limited
Amco Corporation Limited
Joint ventures
BS2 (2011) Limited
Dormant
Dormant
Dormant
Dormant
Structural steel
Specialist Protective Coatings Limited was incorporated on 21 December 2021
BS2 (2011) Limited was dissolved in the year ended 31 December 2021.
8. Property, plant and equipment
Cost
At 1 January 2020
Additions
Disposals
At 1 January 2021
Additions
Reclassification
Disposals
At 31 December 2021
Depreciation
At 1 January 2020
Charge for year
Disposals
At 1 January 2021
Charge for year
Disposals
At 31 December 2021
Net book value at 31 December 2021
Net book value at 31 December 2020
Freehold
property
£’000
Long
leasehold
property
£’000
Plant
equipment &
vehicles
£’000
Assets
under
construction
£’000
Total
£’000
8,414
1,125
-
-
-
-
8,414
1,125
-
-
-
8,414
-
-
(125)
1,000
16,819
1,295
(492)
17,622
1,930
921
(1,484)
18,989
-
26,358
921
-
921
421
2,216
(492)
28,082
2,351
(921)
-
-
(1,609)
421
28,824
Freehold
property
£’000
Long
leasehold
property
£’000
Plant
equipment &
vehicles
£’000
Assets
under
construction
£’000
854
88
-
942
88
-
1,030
7,384
7,472
79
46
-
125
-
(125)
-
1,000
1,000
11,174
1,777
(472)
12,479
1,872
(1,411)
12,940
6,049
5,143
-
-
-
-
-
-
-
421
921
Total
£’000
12,107
1,911
(472)
13,546
1,960
(1,536)
13,970
14,854
14,536
Freehold property includes £3,994,000 in respect of land which is not subject to depreciation. As at 31 December 2021
the long leasehold property represents land which is not subject to depreciation.
The Group has a contractual commitment to acquire plant of £1,099,000 payable in 2022. There were no other material
contractual commitments to acquire property, plant and equipment at 31 December 2021 (2020: £336,000).
All the Group's freehold properties have been charged to the bank to secure bank facilities.
55
100
100
100
100
100
100
100
100
100
100
50
100
100
100
100
100
100
100
100
100
100
-
Newhurst EFW, Shepshed
56
10. Share based payments
The Employee Share Ownership Trust ("the Trust"/"ESOT") was established by Deed dated 14 December 2015 between
Billington Holdings Plc ("the Company") and Ocorian Trustees (Jersey) Limited ("the Trustee") (previously Bedell Trustees
Limited). It is an employee benefit trust established for the benefit of the bona fide employees of the Company and
other Group companies ("the Beneficiaries"). The Trust is a discretionary trust whose assets at present are shares in
the Company and cash, although there are wide investment powers in the hands of the Trustee, who has full power to
distribute the assets as it deems fit to the Beneficiaries.
The Trust was established to allow for the participation of any Inland Revenue approved or unapproved share schemes
to employees of the Group.
Administration costs amounted to £1,000 during the year (2020: £2,000).
As of 31 December 2021 the Trust held 821,330 (2020: 833,731) ordinary shares of 10p each in the capital of the company
(6.35% of the allotted share capital (2020: 6.42%)). The market value of the shares in the ESOT Trusts at 31 December
2021 was £1,930,126 (2020: £2,601,241).
Dividends have been waived by the Trust.
During the year ended 31 December 2021, the Group had two share-based payment arrangements for employees,
subsidiary and Group Directors (Approved ESOT and LTIP) and two share-based payment arrangements for the Group
Directors (Bonus Scheme and Deferred Bonus Scheme). Under each of the arrangements the options are granted
with a fixed exercise price, are exercisable three years after the date of grant and expire ten years after the date of
grant. Employees are not entitled to dividends until the shares are exercised. Employees are required to remain in
employment with the Group, or have left in accordance with the 'good leaver' provisions until exercise, otherwise the
awards lapse. On exercise of the options by the employees the Company issues shares held in trust by the Billington
Holdings ESOT.
In addition, the LTIP provides additional remuneration for those employees who are key to the operations of the
Company. Vesting of the options for this scheme is also conditional on meeting agreed growth targets (non-market
performance conditions).
Brought forward at 1 January
Granted
Exercised
Lapsed
Outstanding at 31 December
Exerciseable at 31 December
Number of shares
2021
No.
2020
No.
Weighted average exercise price
2020
£
2021
£
514,395
424,705
-
234,446
(12,401)
(27,417)
(144,256)
(500)
474,577
514,395
53,914
73,447
0.43
-
-
3.03
0.29
2.56
1.54
-
3.03
3.03
0.43
3.03
11. Inventories
Raw materials
2021
£’000
1,894
2020
£’000
908
Raw materials and consumables recognised as an expense in the Income Statement for the year ended 31 December
2021 totalled £55,784,000 (2020: £40,514,000).
The provision against the value of raw materials at the balance sheet date was £115,000 (2020: £77,000).
No reversal of previous write-downs was recognised as a reduction of expense in 2021 or 2020. None of the inventories
are pledged as securities for liabilities.
12. Contract work in progress
Contract work in progress
2021
£’000
10,257
2020
£’000
4,170
The provision against contract work in progress at the balance sheet date was £958,000 (2020: £nil).
13. Trade and other receivables
Amounts due from customers:
- Trade receivables
- Retentions due within one year
- Retentions due after one year
Total
Other receivables
Derivative financial instruments (note 19)
Prepayments and accrued income
2021
£’000
2020
£’000
8,394
1,667
284
10,345
889
-
982
8,789
2,921
189
11,899
86
15
876
12,216
12,876
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:
Detailed disclosures relating to the credit risk exposures and analysis relating to the allowance for expected credit
losses are in note 19. Certain trade receivables were found to be impaired and a loss allowance for lifetime credit
losses of £542,000 (2020: £441,000) has been recorded accordingly. The amount debited to the consolidated income
statement for the year in relation to expected credit losses was £126,000 (2020: £2,000).
Scheme
Date of Grant
Share price at date of grant
Weighted average exercise price
Expected volatility
Expected dividends
Risk free rate
Expected option life
Approved ESOT
LTIP 2019
LTIP 2020
The movement in the expected lifetime credit losses for trade receivables can be reconciled as follows:
18 January 2016
19 August 2019 23 December 2020
303p
263p
25.0%
Nil
1.5%
290p
295p
nil
n/a
Nil
n/a
nil
n/a
Nil
n/a
3 years
3 years
3 years
Balance at 1 January
Impairment loss
Receivables written off during the year
Balance at 31 December
2021
£’000
441
126
(25)
542
2020
£’000
501
(2)
(58)
441
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 credit for the year was £53,000 (2020: charge of £181,000).
57
58
14. Trade and other payables
Trade payables
Social security and other taxes
Other payables
Contract liabilities
Contract losses
Accruals
2021
£’000
14,539
620
151
2,052
462
3,631
21,455
2020
£’000
7,351
3,029
121
1,939
1,850
4,317
18,607
A prior year balance of £4,476,000 included within trade payables has been reclassified and is now presented within
contract liabilities (£1,939,000), contract losses (£1,850,000) accruals (£2,687,000) to more accurately reflect the nature of
the balances.
The opening contract losses as at 31 December 2021 was £1,850,000. During the year, additional losses of £2,853,000
were recorded, with £3,505,000 of losses utilised during the year and £735,000 of losses reversed during the year,
resulting in closing contract losses balance of £462,000 as at 31 December 2021. The construction of structural steel
frames normally takes 6–12 months from commencement of design through to completion of installation and therefore
most losses are fully utilised in the year in which they are created. The contract losses have all substantially been utilised
within 3 months of the balance sheet date.
15. Cash and cash equivalents
Cash at bank and in hand
Short term deposits
16. Long term borrowings
Property loans (note 17)
2021
£’000
10,382
-
10,382
2021
£’000
1,000
1,000
2020
£’000
5,126
10,000
15,126
2020
£’000
1,250
1,250
17. Property loans
Loans at commercial rates -
due within one year
repayable within five years
2021
£’000
2020
£’000
250
750
1,000
250
1,000
1,250
The bank loan is secured by way of first legal mortgage over certain freehold properties of the Group. The loan is for a
five year term and interest is payable at 2% over bank base rate.
18. Deferred tax liability
Deferred tax provided in the financial statements is set out below and is calculated using a tax rate of 25% (2020: 19%).
Deferred liability 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
2021
£’000
2020
£’000
(156)
(284)
(440)
(623)
183
(440)
(668)
(1,108)
199
(355)
(156)
(299)
143
(156)
(320)
(476)
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 liability 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.
At the 2020 Budget, the UK Government announced that the Corporation Tax main rate for the years starting 1 April
2020 and 2021 would remain at 19%. At the 2021 Budget, the UK Government announced Corporation Tax main rate
would increase to 25% from 1 April 2023.
59
60
Littlebrook Power Station, Dartford
19. 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 are equal to the fair value and are as follows:
31 December 2021
Current financial assets
Trade and other receivables
Cash and cash equivalents
Liabilities
Trade and other payables
Non-current borrowings
Current borrowings
31 December 2020
Current financial assets
Trade and other receivables
Derivative financial instruments
Cash and cash equivalents
Liabilities
Trade and other payables
Lease liabilities
Non-current borrowings
Current borrowings
Amortised cost
£’000
FVTPL
£’000
11,234
10,382
21,616
14,690
750
250
15,690
-
-
-
-
-
-
-
Amortised cost
£’000
FVTPL
£’000
12,000
-
15,126
27,126
7,472
9
1,000
250
8,731
-
15
-
15
-
-
-
-
-
Derivative financial instruments
The Group’s derivative financial instruments are measured at fair value and are summarised below:
EUR time-option forward contracts
Derivative financial assets
2021
£’000
-
-
Total
£’000
11,234
10,382
21,616
14,690
750
250
15,690
Total
£’000
12,000
15
15,126
27,141
7,472
9
1,000
250
8,731
2020
£’000
15
15
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.
As at 31 December 2020 the Group had an open forward
exchange contract to sell EUR 2,000,000. The contract
is a time-option that matured on 1 February 2021 and the
forward rate of the contract is 1.104539. The fair value of
the contract as at 31 December 2020 was £14,834. The
Group has no open forward exchange contracts as at
31 December 2021.
The forward exchange contract is considered
by management to be part of economic hedge
arrangements but has not been formally designated as
such. Therefore a gain of £15,000 has been recognised in
the profit and loss account during the prior year.
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.
31 December 2021
31 December 2020
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.
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 2021, 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% (2020: +/- 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.
Profit for the year
Equity
+1%
(10)
(13)
-1%
10
13
+1%
(10)
(13)
-1%
10
13
61
62
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 procedures.
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.
The Group continuously monitors the credit quality of
customers based on a credit rating scorecard. Where
available, credit insurance is obtained on all customers
across the Group. External credit ratings and/or reports on
customers are also obtained and used. The Group’s policy is
to deal only with credit worthy counterparties. Where credit
insurance is not obtainable for a specific customer, trade
is only permissible following Director approval. Exposure
is monitored on an ongoing basis. The credit terms range
between 30 and 90 days. The credit terms for customers as
negotiated with customers are subject to an internal approval
process which considers the credit rating scorecard. The
ongoing credit risk is managed through regular review of
ageing analysis, together with credit limits per customer.
Security
Trade receivables consist of a large number of customers in
various industries, predominantly although not exclusively
construction, and geographical areas. The Group does not
hold any security on the trade receivables balance.
In addition, the group does not hold collateral relating to
other financial assets (eg derivative assets, cash and cash
equivalents held with banks).
Trade receivables
The Group applies the IFRS 9 simplified model of
recognising lifetime expected credit losses for all trade
receivables as these items do not have a significant
financing component.
In measuring the expected credit losses, the trade
receivables have been assessed on a collective basis
as they possess shared credit risk characteristics. They
have been grouped based on the days past due and also
according to the geographical location of customers.
The expected loss rates are based on the payment
profile for sales over the past 48 months before 31
December 2021 and 1 January respectively as well as
the corresponding historical credit losses during that
period. The historical rates are adjusted to reflect current
and forwarding looking macroeconomic factors affecting
the customer’s ability to settle the amount outstanding.
The Group has identified gross domestic product (GDP)
and unemployment rates of the countries in which the
customers are domiciled to be the most relevant factors
and according adjusts historical loss rates for expected
changes in these factors. However given the short period
exposed to credit risk, the impact of these macroeconomic
factors has not been considered significant within the
reporting period.
Trade receivables are written off (ie derecognised) when
there is no reasonable expectation of recovery. Failure to
make payments 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.
On the above basis the expected credit loss for trade receivables as at 31 December 2021 was determined as follows:
Expected credit rate loss
Gross carrying amount (£’000)
Lifetime expected credit loss (£’000)
Current
1%
7,879
263
More than
30 days
Trade receivables days past due
More than
60 days
More than
90 days
19%
632
122
18%
288
53
75%
137
104
Total
6%
8,936
542
The closing balance of the of the trade receivables loss allowance as at 31 December 2021 reconciles with the trade
receivables loss allowance opening balance as follows:
Opening loss allowance as at 1 January 2021
Loss allowance recognised during the year
Receivables written off during the year
Loss allowance as at 31 December 2021
£’000
441
126
(25)
542
Liquidity risk
As at 31 December 2021 the Group's financial liabilities have contractual maturities (including inetrest payments where
applicable) which are summarised below:
31 December 2021
Trade payables
Other payables
Property loans
Current within
six months
£’000
Current six to
twelve months
£’000
Between one
and five years
£’000
14,539
151
136
14,826
-
-
134
134
-
-
780
780
This compares to the maturity of financial liabilities for the Group in the previous reporting period which was as follows:
31 December 2020
Trade payables
Other payables
Lease liabilities
Property loans
Current within
six months
£’000
Current six to
twelve months
£’000
Between one
and five years
£’000
7,351
121
9
125
7,606
-
-
-
125
125
-
-
-
1,000
1,000
Liquidity risk is the risk that the Group might be unable to meet its obligations. The Group manages its liquidity needs
through the close control, monitoring and forecasting of cash inflows and cash outflows. Net cash requirements are
compared to available borrowing facilities in order to determine headroom or any shortfalls. Management believe that
levels of cash reserves and available headroom are sufficient to meet the Group's needs over its forecast period.
20. Equity
Called up share capital
Authorised
2021
2020
No. of shares
£’000
No. of shares
£’000
Ordinary shares of 10p each
27,500,000
2,750
27,500,000
2,750
Allotted and fully paid
Ordinary shares of 10p each
“A” ordinary shares of 10p each
12,860,959
73,368
12,934,327
1,286
7
1,293
12,860,959
73,368
12,934,327
1,286
7
1,293
Both classes of share rank pari passu in all respects.
Details of Company share options outstanding at 31 December 2021 and treasury shares held by the ESOT are given in
note 10.
63
64
Other components of equity
The details of other components of equity are as follows:
At 1 January 2020
ESOT movement in year
At 31 December 2020
At 1 January 2021
ESOT movement in year
At 31 December 2021
ESOT
£’000
(820)
37
(783)
(783)
13
(770)
Cash flow
hedges
£’000
-
-
-
-
-
-
Total
£’000
(820)
37
(783)
(783)
13
(770)
21. Ultimate controlling related party
At the year end, the Directors considered that the Company had no ultimate controlling party.
22. 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
2021
£’000
2020
£’000
-
-
-
-
8
8
2021
£’000
2020
£’000
-
-
-
9
-
9
23. 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 £570,000 (2020:
£552,000).
Defined contribution schemes accounted for £570,000
(2020: £552,000) of this amount with £nil (2020: £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 2020 (approved 10 December 2020).
In accordance with the terms of schedule of contributions
dated 10 December 2020 the Company expects to
contribute approximately £nil to the defined benefit
pension scheme in the year ending 31 December 2022.
The next scheme funding actuarial valuation is due as
at 31 March 2023. The recovery plan 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.
There were no additions to right of use assets during the year.
The Group leased one property and various cars during the year. The property lease expired during the prior year and
all car leases expired during the current year and were 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 £9,000 (2020: £109,000).
2021
£’000
2020
£’000
-
8
1
-
46
60
2
-
Equities - Overseas
Bonds - UK Government
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
The scheme exposes the Group to actuarial risk such
as interest rate risk, investment risk, longevity risk and
inflation risk:
Investment risk
The plan assets at 31 December 2021 are held
predominantly in bonds and debt instruments. The fair
value of the equity assets is exposed to the risks of
movements in UK and Overseas equity markets.
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.
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.
The assets of the schemes were:
Value at 31 December
2021
£’000
-
7,838
-
27
1,828
9,693
(7,020)
2,673
(668)
2,005
2020
£’000
-
4,690
2,750
45
1,807
9,292
(7,609)
1,683
(320)
1,363
2019
£’000
-
3,338
2,482
31
2,701
8,552
(6,347)
2,205
(375)
1,830
65
66
2021
£’000
2020
£’000
The significant actuarial assumptions used for the valuation are as follows:
Rate of increase in pensionable salaries
Rate of increase in pensions in payment
Discount rate
Inflation assumption
2021
%
2.5
3.4
1.8
3.4
2020
%
2.5
2.9
1.2
2.9
The mortality assumption adopted for the purposes of the calculations as at 31 December 2021 is as follows:
- Base table: S3PxA tables, year of birth
- Future mortality improvements: CMI 2020 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)
2021
£’000
24.9
26.7
27.5
29.2
2019
%
2.5
2.7
1.9
2.7
2020
£’000
24.9
26.6
27.3
29.1
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
2021
£’000
(562)
281
281
2020
£’000
(609)
380
304
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.
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
Administration cost
Total (expense)/income recognised in profit or loss
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/(losses) from changes in demographic assumptions
Actuarial gains/(losses) from experience differing from that assumed
Total gain/(loss) recognised in other comprehensive income
Movements in the fair value of plan assets during the year were as follows:
At 1 January
Interest cost
Return on plan assets (excluding amounts included in net interest)
Contributions
Benefits paid
Administration costs
At 31 December
Movements in the defined benefit obligation during the year were as follows:
At 1 January
Interest cost
Remeasurement - actuarial gains/(losses) from changes in financial assumptions
Remeasurement - actuarial gains/(losses) from changes in demographic assumptions
Remeasurement - experience differing from that assumed
Benefits paid
At 31 December
(7,020)
9,693
2,673
110
(90)
(53)
(33)
544
461
16
2
1,023
2021
£’000
9,292
110
544
-
(200)
(53)
(7,609)
9,292
1,683
160
(119)
(37)
4
827
(968)
(127)
(258)
(526)
2020
£’000
8,552
160
827
-
(210)
(37)
9,693
9,292
2021
£’000
(7,609)
(90)
461
16
2
200
(7,020)
2020
£’000
(6,347)
(119)
(968)
(127)
(258)
210
(7,609)
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.
67
68
Pinewood Studios, Slough
24. Related party transactions
During the year sales of £130,000 (2020 - £120,000) were made by one of the Group subsidiaries, Easi-Edge Limited, to
Tolent Construction Limited. A non-executive Director of the ultimate parent of Tolent Construction Limited is also a non-
executive Director of Billington Holdings Plc. All transactions were conducted on an arm's length basis on normal trading
terms. At 31 December 2021 £12,000 (2020 - £59,000) was owed to Easi-Edge Limited.
No other 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.
25. 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 Company was dormant in the
year ending 31 December 2020 and dissolved in the year ended 31 December 2021.
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 2021 were as follows:
Share of revenue
Share of profit before taxation
Share of profit after taxation
Share of current assets
Share of liabilities due within one year
26. Reconciliation of financing activities
At 1 January 2020
Cash flow
At 31 December 2020
Cash flow
At 31 December 2021
2021
£’000
-
-
-
-
-
Cash and cash
equivalents
£’000
Property loans
£’000
Net cash
£’000
17,856
(2,730)
15,126
(4,744)
10,382
(1,500)
250
(1,250)
250
(1,000)
16,356
(2,480)
13,876
(4,494)
9,382
27. Post balance sheet event
Shortly after the year end, a client with whom the Company was completing a contract with entered administration. This
provided further evidence following previous communications prior to year end that there was significant uncertainty
regarding the recoverability of the receivable and contract work in progress owed by the client at the balance sheet
and is therefore considered an adjusting event. An impairment of £1,123,000 has therefore been recorded against the
receivable and contract work in progress balances.
69
70
PARENT COMPANY STATEMENT
OF FINANCIAL POSITION AS AT
31 DECEMBER 2021
PARENT COMPANY STATEMENT OF
CHANGES IN EQUITY FOR THE YEAR
ENDED 31 DECEMBER 2021
At 1 January 2020
ESOT movement in year
Profit for the financial year
Credit relating to equity-settled
share based payments
Share
capital
£’000
Share
premium
£’000
Capital
redemption
reserve
£’000
1,293
1,864
132
-
-
-
-
-
-
-
-
-
Other
reserve -
ESOT
£’000
(820)
37
-
-
Accumulated
profits
£’000
Total
equity
£’000
9,962
12,431
(37)
-
3,077
3,077
134
134
At 31 December 2020
1,293
1,864
132
(783)
13,136
15,642
At 1 January 2021
ESOT movement in year
Profit for the financial year
Credit relating to equity-settled
share based payments
Dividends
Share
capital
£’000
Share
premium
£’000
Capital
redemption
reserve
£’000
1,293
1,864
132
-
-
-
-
-
-
-
-
-
-
-
-
Other
reserve -
ESOT
£’000
(783)
13
-
-
-
Accumulated
profits
£’000
Total
equity
£’000
13,136
15,642
(13)
-
1,050
1,050
(17)
(515)
(17)
(515)
At 31 December 2021
1,293
1,864
132
(770)
13,641
16,160
The notes 1 to 20 form part of these parent Company financial statements.
Note
2021
2020
£’000
£’000
£’000
£’000
Fixed assets
Tangible assets
Investments
Current assets
Debtors falling due within one year
Deferred tax
Cash at bank and in hand
8
9
11
14
1,335
65
9,833
11,233
Creditors: amounts falling due within one year
12
(3,226)
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
13
15
16
16
16
16
8,333
570
8,903
8,007
16,910
(750)
16,160
1,293
1,864
132
(770)
13,641
16,160
935
51
15,093
16,079
(8,442)
8,435
570
9,005
7,637
16,642
(1,000)
15,642
1,293
1,864
132
(783)
13,136
15,642
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 profit after taxation of the Company for the year was £1,050,000 (2020: £3,077,000).
The parent Company financial statements were approved and authorised for issue by the Board of Directors on 25 April 2022.
Ian Lawson
Non-Executive Chairman
Trevor Taylor
Chief Financial Officer
The notes 1 to 20 form part of these parent Company financial statements.
71
B7 New Bailey, Salford
72
(a) Property, plant and equipment
Tangible fixed assets are stated at cost, net of depreciation
and any provision for impairment.
Depreciation is calculated to write off the cost of fixed
assets less estimated residual value by equal annual
instalments over their expected useful lives. Land is not
depreciated. The rates applicable are:
Buildings
Plant and equipment
2%
5% to 33.3%
(b) Current and deferred tax
The tax expense for the year comprises current and
deferred tax. Tax is recognised in retained earnings. The
current income tax charge is calculated on the basis of tax
rates and laws that have been enacted or substantively
enacted by the reporting date.
Deferred balances are recognised on all timing differences
that have originated but not reversed by the statement of
financial position date, except that:
• the recognition of deferred tax assets is limited to the
extent that it is probable that they will be recovered
against the reversal of deferred tax liabilities or other
future taxable profits; and
• any deferred tax balances are reversed if and when all
conditions for retaining associated tax allowances have
been met.
Deferred tax balances are not recognised in respect of
permanent differences.
(c) 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.
(d) Investments
Within the parent Company, investments in subsidiary
undertakings are stated at cost less provision for
permanent diminution in value.
(e) Debtors
Short term debtors are measured at transaction price, less
any impairment. Loans receivable are measured initially
at fair value, net of transaction costs, and are measured
subsequently at amortised cost using the effective interest
method, less any impairment.
(f) Creditors
Short term creditors are measured at the transaction
price. Other financial liabilities, including bank loans, are
measured initially at fair value, net of transaction costs, and
are measured subsequently at amortised cost using the
effective interest method.
(g) Financial instruments
The Company uses financial instruments, other than
derivatives, comprising borrowings, cash resources and
various items such as trade debtors, trade creditors etc.
that arise from its operations. The main purpose of these
financial instruments is to raise finance for the Company's
operations.
Income and expenditure arising on financial instruments is
recognised on the accruals basis, and credited or charged
to retained earnings in the financial period to which it
relates.
(h) Leased assets
All leases are operating leases and the annual rentals are
charged wholly to profit or loss.
(i) Government grants
Government grant income is recognised at the point that
there is reasonable assurance that the Company will
comply with the conditions attached to it and that the grant
will be received. During the prior year Coronavirus Job
Retention Scheme ('CJRS') income has been received and
accounted for under the accruals model and classified as
grants relating to revenue. Grant income is included within
other operating income in the profit and loss.
NOTES FORMING PART OF THE PARENT
COMPANY FINANCIAL STATEMENTS FOR
THE YEAR ENDED 31 DECEMBER 2021
1. Company information
4. Accounting Policies
Billington Holdings Plc is a Company domiciled in
England and Wales, registration number 02402219. The
registered office is Barnsley Road, Barnsley, S73 8DS.
Basis of preparation of financial statements
The financial statements have been prepared on the
historical cost 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, under
FRS 102 paragraph 1.12:
• the requirement to present a statement of cash flows
and related notes (Section 7 Statement of Cash Flows
& paragraph 3.17 (d))
• key management personnel (paragraph 33.7)
• 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 impairment of the Company's tangible assets. Factors
taken into consideration in reaching such a decision
include the economic viability and expected future
financial performance of the asset.
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.
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 continued positive
underlying trading performance in 2021 are detailed in the
Financial Review and they demonstrate the robust position
of the Group heading into 2022.
The Group has a gross cash balance of £10.4 million at 31
December 2021 and no significant long-term borrowings
or commitments.
The Directors have prepared forecasts covering the
period to April 2023 and approved by the Board in
March 2022. Whereas restrictions are easing within the
UK and the construction industry output increases there
remains some residual uncertainty as to the future impact
on the Company of Covid-19. The residual uncertainty
has been separately considered as part of the Directors'
consideration of the going concern basis of preparation.
The success of the vaccine roll out programme, combined
with the continued easing of restrictions, provides an
increased degree of confidence moving into 2022.
Industry projections (issued in January 2022) indicate
that output increased 16.8% in 2021 and a further 10.5%
anticipated in 2022. Furthermore, the current orderbook
secured for 2022 allows the Group to look forward with an
increasing degree of optimism.
Material price volatility and availability has been affected
through the onset of the conflict in Ukraine. The
Company's primary input materials relating to contracts
are that of steel sections and plate. The Company has
sought to agree fixed prices with its suppliers and forward
purchase sufficient quantity of these materials to provide
certainty the Company is able to meet its contractual
obligations.
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.
73
74
5. Profit before taxation
Profit before taxation is stated after:
Depreciation
Fees payable to the Company’s auditor for the audit of the Company’s annual accounts
Fees payable to the Company’s auditor for other services:
tax compliance
other services
Operating lease rentals
Government grant - furlough
6. Directors and employees
Staff costs during the year including Directors:
Wages and salaries
Social security
Pension costs
Share-based payments
2021
£’000
105
55
6
-
50
-
2021
£’000
1,421
164
77
(17)
2020
£’000
108
37
11
1
42
(28)
2020
£’000
1,231
169
71
134
1,645
1,605
7. Dividends
A final dividend has been proposed in respect of 2021 of 3.0 pence per ordinary share (£388,000) (2020: 4.25 pence)
per ordinary share (£550,000). As the distribution of dividends by Billington Holdings Plc requires approval at the
shareholders' meeting, no liability in this respect is recognised in the consolidated financial statements.
8. Property, plant and equipment
Cost
At 1 January 2021
Additions
At 31 December 2021
Depreciation
At 1 January 2021
Charge for year
At 31 December 2021
Net book value at 31 December 2021
Net book value at 31 December 2020
Land & Buildings
£’000
Plant & equipment
£’000
Total
£’000
9,199
-
9,199
804
88
892
8,307
8,395
130
3
133
90
17
107
26
40
9,329
3
9,332
894
105
999
8,333
8,435
Included within land and buildings above is land with a cost of £3,994,000 inclusive of leasehold land of £1,000,000,
both of which are not depreciated.
The Company has charged the freehold properties to secure bank facilities across the Group.
The average number of employees of the Company during the year was 20 (2020: 19).
Remuneration in respect of Directors was as follows:
9. Investments
Aggregate emoluments
Company pension contributions to a defined contribution scheme
2021
£’000
682
45
During the year no Directors (2020: no Directors) participated in defined benefit pension schemes and two
Directors (2020: two Directors) participated in a defined contribution pension scheme.
During the year two Directors (2020: two Directors) exercised share options with a total gain of £42,000
(£24,000 related to the highest paid director).
The amounts set out above include remuneration in respect of the highest paid Director as follows:
Aggregate emoluments
Company pension contributions to a defined contribution scheme
During the year the highest paid Director exercised share options.
2021
£’000
291
18
2020
£’000
605
41
2020
£’000
257
23
Cost
At 1 January 2020 and at 31 December 2021
Shares in
subsidiary
undertakings
£’000
570
All companies have only ordinary shares in issue and are registered in England and Wales unless otherwise stated.
The principal trading subsidiary undertakings are disclosed in note 9 of the Group consolidated financial statements.
10. Share based payments
The Company operates a share based payment scheme for certain employees. These share options are granted based
on seniority and length of service with share options granted in the Company. There are two Trusts in existence being a
HMRC approved share option scheme and an unapproved share option scheme.
The options are granted with a fixed exercise price, are exercisable three years after the date of grant and expire ten
years after the date of grant. Employees are not entitled to dividends until the shares are exercised. Employees are
required to remain in employment with the Company until exercise, otherwise the awards lapse. On exercise of the
options by the employees the Company issues shares held in the relevant trust in operation.
In addition, one of the schemes provides additional remuneration for those employees who are key to the operations of
the Company. Vesting of the options for this scheme is also conditional on meeting agreed growth targets (non-market
performance conditions).
75
76
Number of shares
2021
No.
2020
No.
Weighted average exercise price
2020
£
2021
£
13. Creditors: amounts falling due after more than one year
Brought forward at 1 January
322,645
185,356
Granted
Exercised
Lapsed
Outstanding at 31 December
Exercisable at the end of the year
-
(12,401)
(11,418)
161,429
(24,140)
-
298,826
322,645
12,690
15,723
0.15
-
3.03
-
0.04
3.03
0.59
-
3.03
-
0.15
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.
Under FRS102, the Group recognises an expense in the relevant Company's financial statements. The expense is
apportioned over the vesting period based upon the number of options which are expected to vest and the fair value of
those options at the date of grant. The total credit apportioned to Billington Holdings plc and recognised as credit in the
year was £17,000 (2020: expense of £134,000).
11. Debtors
Amounts falling due within one year
Amounts owed by group undertakings
Other debtors
Prepayments and accrued income
2021
£’000
2020
£’000
1,265
5
65
1,335
830
65
40
935
Amounts owed by group undertakings are payable on demand. Interest payable on these loans is charged at a market
rate. No provisions are deemed to be required against the outstanding amounts.
12. Creditors: amounts falling due within one year
Bank loans
Trade creditors
Amounts owing to group undertakings
Social security and other taxes
Accruals and deferred income
Current taxation
2021
£’000
250
252
1,999
126
536
63
2020
£’000
250
146
7,391
69
523
63
3,226
8,442
Amounts owed to group undertakings are payable on demand. Interest payable on these loans is charged at a market rate.
Bank loans and mortgages
Bank loans are repayable as follows:
Within one year
Between one to two years
Between two to five years
2021
£’000
750
250
250
500
1,000
2020
£’000
1,000
250
250
750
1,250
The bank loans are secured by way of first legal mortgage over certain freehold properties of the Group.
14. Deferred tax asset
Deferred tax provided in the financial statements is set out below and is calculated using a tax rate of 25% (2020: 19%).
Accelerated capital allowances
Other short term timing differences
Accelerated capital allowances
2021
£’000
6
59
65
2020
£’000
4
47
51
The recoverability of the deferred tax asset is dependent on future Group taxable profits which the Directors consider
likely as a result of recently prepared financial forecasts.
15. Called up share capital
Equity
Allotted and fully paid
Ordinary shares of 10p each
“A” ordinary shares of 10p each
2021
2020
No. of shares
£’000
No. of shares
£’000
12,860,959
73,368
12,934,327
1,286
7
1,293
12,860,959
73,368
12,934,327
1,286
7
1,293
Both classes of share rank pari passu in all respects.
Details of Company share options outstanding at 31 December 2021 and treasury shares held by the ESOT are given in
note 10 of the Group financial statements.
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78
Sandwell Aquatics Centre, Smethwick
16. Reserves
Share premium - represents the premiums received on issue of share capital.
Capital redemption reserve - represents the accumulated balance resulting from the Company’s purchase of own shares.
Other reserve - represents the accumulated balance of share capital held by the Employee Share Ownership Trust.
Retained earnings - includes all current and prior period retained profits and losses.
17. Ultimate controlling related party
At the year end, the Directors considered that the Company had no ultimate controlling party.
18. Retirement benefits
The Company operates funded pension schemes for certain employees and Directors. The total contributions to all
pensions by the Company for the year was £77,000 (2020: £71,000).
Defined contribution schemes accounted for £77,000 (2020: £71,000) of this amount with £nil (2020: £nil) relating to
defined benefit schemes, where the benefits are based on final pensionable pay.
19. 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.
In accordance with FRS102 Billington Holdings plc is exempt from disclosing related party transactions with its wholly
owned subsidiaries.
20. Contingent liabilities
The Company is part of the group cross guarantee to the principal bankers. At the year end there were no outstanding
liabilities.
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80
Billington Holdings Plc
Steel House, Barnsley Road, Wombwell, Barnsley, South Yorkshire S73 8DS
Tel: +44 (0) 1226 340666 info@billington-holdings.plc.uk
billington-holdings.plc.uk i l