Billington Holdings Plc Annual Report 2022

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FY2022 Annual Report · Billington Holdings Plc

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Annual Report &
Financial Statements

YEAR ENDED 31 DECEMBER 2022

Sandwell Aquatics Centre, Birmingham

CONTENTS

Chairman’s Statement

03 Operational Review

Financial Review

Board Profile and Registered Office

Report of the Directors

Strategic Report

Sustainable and Responsible Business

25 Governance Report

Independent Auditor's Report

Consolidated income statement

38 Consolidated statement of comprehensive income

39 Consolidated statement of financial position

40 Consolidated statement of changes in equity

Consolidated cash flow statement

Principal accounting policies

Notes forming part of the Group financial statements

Parent company statement of financial position

Parent company statement of changes in equity

73 Notes forming part of the parent company financial statements

CHAIRMAN’S STATEMENT

2022 was a year of significant progress and achievement for Billington, with an
excellent trading performance, despite continuing industry wide challenges of
material price increases along with restrictions in the availability of certain products
and some labour shortages arising throughout the period.

In 2022 revenue increased by 4.7 per cent to £86.6 million
(2021: £82.7 million) with profit before tax increasing to £5.8
million (2021 - underlying: £1.3 million), reflective of efficiency
improvements implemented across the Group, combined
with the successful delivery of a number of large, complex
projects. The Basic Earnings Per Share (“EPS”) for the year
amounted to 39.1 pence compared with 0.6 pence in 2021.
Our balance sheet remained strong with Net Assets of
£34.3 million at 31 December 2022 (2021: £29.4 million), with
a continuing strong gross cash balance of £11.6 million at 31
December 2022 (31 December 2021: £10.4 million), despite
the continued maintenance of significant levels of inventory
and contract work in progress at the year end.

Billington Structures enjoyed an improved performance
in 2022, with the results achieved being significantly
ahead of our expectations at the start of the year. The
business operated at close to full capacity for much of the
year and whilst it continued to be impacted by continuing
material price inflation and volatility, coupled with material
availability constraints as a result of the conflict in Ukraine,
the performance and outlook improved during the course of
the year. A number of larger than average contracts were
secured in the second half of the year at more attractive
margins, particularly in the data centre, energy from waste
and industrials sectors. These larger contract wins, coupled
with the benefits being realised from the Group’s capital
investment strategy and focus on efficiency improvements
enabled a significantly improved performance to be
realised. The structural steel businesses also benefited
from the additional skilled labour recruited from overseas
that has provided further capacity for 2023 and beyond.
The prospects for the business in 2023 are encouraging,
with a variety of higher margin projects secured and a
further healthy pipeline of opportunities available.

Peter Marshall Steel Stairs continued the strong
performance seen over the past two years into 2022, again
recording record revenues for the year and operating at
near full capacity. Whilst the business was impacted by
steel price increases, it retained robust margins, focusing on
contracts where an appropriate margin could be achieved.
It currently enjoys a strong order book both for projects
being undertaken by Billington Structures and third parties,
with significant prospects to secure further business.

The Easi-Edge perimeter edge protection and fall
prevention business continued to see lower than pre-
pandemic levels of utilisation as the commercial office
market remained subdued, although it remained a
significant contributor to Group profits. Easi-Edge continues
to benefit from the significant investment the Group made
in the business prior to the pandemic and it is well placed
to take advantage of its market leading position as markets
continue to recover.

Hoard-it enjoyed an exceptional 2022, operating at full
capacity for much of the year, as it continued to take
advantage of growing demand from tier one and tier two
contractors and adding to its product offerings. The positive
momentum has continued into the current year with a good
pipeline of new business for 2023 and plans to expand the
business into areas of the UK currently underserved.

In March 2022 the Group announced the formation of a

new subsidiary, Specialist Protective Coatings Ltd, focused
on surface preparation and the application of protective
coatings for products across a variety of sectors including
rail, highways, defence, petrochemical, energy, structural
steel and infrastructure. The business was formed following
the Company's acquisition out of administration of the
trading assets of Orrmac Coatings Limited, a specialist
painting company based in Sheffield, UK, in January 2022.
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. The
business has made good progress since its formation with
significant capital expenditure to ensure that an exceptional
quality service is delivered for both internal Billington work
and external customers.

Billington has emerged from the Covid related market
disruption as a stronger and more efficient business, which
continues to be supported by a healthy balance sheet and a
committed workforce. However, we are not immune to the
impacts of wider macroeconomic and global events. During
2022 the conflict in Ukraine presented new challenges.
Significant volumes of steel products originate in Russia
and Ukraine and with supplies restricted from these
regions, shortages, and as a consequence price increases,
were experienced for some of the Group’s raw materials.
However, alternative sources for these products were
quickly found and supply constraints had a lessening impact
as the year progressed.

The Group has secured a number of significant contracts for
2023 and is well placed to take advantage of the significant
number of further opportunities at attractive 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
volatile equity and bond markets towards the latter part
of 2022. In light of the continuing surplus, measures have
been taken to reduce the risk profile of the assets held by
the scheme. At 31 December 2022 a surplus of £2,174,000
(2021: £2,673,000) along with a corresponding deferred
tax liability of £544,000, has resulted in a net recognised
surplus of £1,630,000 (2021: £2,005,000).

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 2022 Billington declared a final dividend
in relation to the year ended 31 December 2021 of 3.00
pence per share amounting to £0.4 million, which was
2.7 times covered by 2021 earnings. The Board feels it
is appropriate for Billington to continue to be dividend
paying at a level that reflects underlying earnings, whilst
continuing to maintain a robust balance sheet. The Board
is therefore recommending an increased final dividend of
15.5 pence per share for 2022, which is covered 2.52 times

by earnings. The dividend declared is at the highest level in
the Company’s history.

The final dividend will be paid on 4 July 2023, subject to
shareholder approval at the Company’s AGM on 6 June
2023. The associated ex-dividend date will be 8 June 2023
with a record date of 9 June 2023. No interim dividend for
2022 was declared (2021: nil), a policy consistent with prior
years.

Liquidity and Capital Reserves

In 2022 the Group experienced a net cash inflow of £1.2
million (2021: £4.7 million net cash outflow) increasing the
Group’s gross cash and cash equivalents as at 31 December
2022 to £11.6 million from £10.4 million as at 31 December
2021. The cash balance at 31 December 2022 reflected
good cash collection and certain modest customer
pre-payments, offset by an increase in inventories and
contract work in progress by £4.7 million to £16.9 million (31
December 2021 £12.2 million). The increase in inventories
and contract work in progress at the year end was reflective
of several ongoing larger contracts due for completion post
period end.

During the year the Group temporarily utilised a
proportion of its cash resources to maximise the margin
available on contracts via the stockpiling of steel when
appropriate to take advantage of attractive supply and
pricing opportunities. At the year end the amount of steel
stockpiled by the Group had returned closer to levels held
historically for a similar level of business.

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 2022 increased as the Group
continues to invest in process improvements, together with
the establishment of the Specialist Protective Coatings
business.

Board

John Gordon, a Non-executive Director, has notified the
Company that he does not wish to stand for re-election at
the forthcoming Annual General Meeting, having served as
a Non-executive Director of Billington since 2007. John will
therefore leave the Board at the conclusion of the Annual
General Meeting to be held on 6 June 2023. I, on behalf
of the Board, would like to thank John for his substantial
contribution to Billington and we wish him well in his future
endeavours.

The Board has commenced a process to find a suitable
replacement non-executive Director. Until an appointment
is made Stephen Wardell will assume the Chairmanship of
the Company’s Remuneration Committee.

Our People

The key to Billington’s continued success is the hard work
and dedication of its workforce, and I would like to place
on record my thanks to the whole Billington team for their
contribution in 2022.

However, the Group, in common with the wider industry,
faces challenges in recruiting sufficient skilled labour.
Whilst the Group continues to train and develop skilled
labour locally, working in partnership with a number of
education providers, it has become necessary to recruit
skilled labour from overseas. In 2022 we welcomed 26 new
staff members from overseas, who have already provided
a valuable contribution to the Group’s capabilities and are
allowing us to service the demand we are seeing.

The Group remains committed to supporting its employees,
particularly in a time when rapid increases in the cost of
living are being experienced and continues to actively
promote its apprenticeship and graduate schemes.

Economic Outlook

During the year iron ore and metallurgic coking coal prices
continued to be volatile, rising at the start of the year, before
subsiding through the middle and then returning to an
upward trend at the end of the year, which has continued
into 2023. This, coupled with continuing high energy
prices and the impact of the conflict in Ukraine, has led
to continued volatility and inflationary pressures on steel
prices, a situation that has remained post period end. Whilst
the Group operates many fixed price supply contracts
and has arrangements in place to mitigate some of the
increases, we have suffered continued escalation in the
price of consumables and ancillary products, cost increases
which often cannot be passed on. We expect inflationary
pressures and the restrictions in the supply of certain steel
products to continue for some time, although we anticipate
these pressures will ease as we move through 2023.

Post the Covid-19 related impact on the market, many of
the sectors in which Billington operates continue to see
reduced levels of activity, particularly large commercial
office developments. However, other sectors such as
large distribution warehouses and industrial developments
combined with energy from waste and data centre facilities
are considerably more active and have returned to, or
exceeded, pre-pandemic levels.

The UK structural steelwork market grew by 11.7 per cent in
2022, following a 16.9 per cent increase in 2021. Current
forecasts are for the market to contract slightly in 2023,
with an overall decline of 3.0 per cent, before the market
stabilises with 0.5 per cent growth in 2024. However, these
forecasts are likely to be subject to revision as the impact of
wider macroeconomic factors are assessed.

With all our projects we are conscious that many of the
main construction contractors continue to operate under
significant pressure. The Group insures its exposures
with the maximum available cover, in a challenging credit
insurance market, and continues to focus on projects with
the more robust larger contractors that can deliver an
appropriate margin. We have processes in place to assess
the risks associated with individual projects on a case-
by-case basis to reduce and mitigate the associated risks
where possible.

Current Trading and Outlook

Billington is a robust business with a strong market position.
Whilst there inevitably remain further challenges ahead
and macroeconomic headwinds are likely to remain for
some time, particularly with regard to material availability,
price volatility and continuing inflationary pressures, we are
seeing a consistent stream of opportunities at improved
margins and have a very healthy order book.

The Group’s capital investment programme and efficiency
improvements implemented are enabling us to achieve
improved margins on opportunities we are seeing and I
believe Billington is well placed to deliver improved results
in 2023.

In closing, I would like to thank Billington's Board,
employees, shareholders and all stakeholders for their
continued support.

Ian Lawson
Non-Executive Chairman

17 April 2023

OPERATIONAL REVIEW

2022 saw a further recovery in the market following the Covid-19 pandemic,
although there continued to be an impact from the turbulent and inflationary
macroeconomic environment, exacerbated by the conflict in Ukraine. Against this
background, the Group's revenue increased by 4.7 per cent to £86.6 million for the
year (2021: £82.7 million).

During the period as margin pressure remained across the industry, the Group
successfully secured a number of significant contracts at improved margin levels
and has a very healthy pipeline of current and potential business. The Group
achieved a significant increase in profits, ahead of our expectations at the start
of the year, despite these continuing challenging market conditions, with profit
before tax of £5.8 million (2021 - underlying: £1.3 million), in particular showing the
benefit of significant efficiency improvements implemented across the Group in
recent times.

Whilst we are mindful of the continuing volatile macroeconomic environment,
coupled with supply constraints on materials and labour, we anticipate a further
improvement in performance during 2023. Beyond the current year the market
is more unpredictable, however Billington has emerged from the pandemic as
a stronger and more efficient business, which continues to be supported by
a healthy balance sheet and a committed workforce. I believe we can remain
resilient to any challenges presented and the Group is well placed to take
advantage of the significant number of opportunities at more attractive margin
levels that are currently being seen.

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 10,000
tonnes. With two facilities in Barnsley and a further
facility in Bristol and a heritage dating back over 75 years,
the business is well recognised and respected in the
industry with the capacity to process 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 for growth
as well as allowing for the supply of value added,
complementary products and services enhancing the
comprehensive offering of the Group.

During the year the Group's structural steel businesses
continued to operate at near full capacity, although a
number of projects continued to be subject to delays and
timetable movements. Many of the projects undertaken
in the first half of the year, as in 2021, continued to be
in areas, 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, albeit positive margin. The business
was also impacted by continuing material price inflation
and volatility, coupled with material availability constraints
as a result of the conflict in Ukraine.

During the first half of the year the margins achieved
were also impacted by a number of legacy contracts
following the Covid-19 pandemic. However, a number
of larger than average contracts were secured and
delivered in the second half of the year at improved
margins, particularly in the data centre, energy from
waste and industrials sectors. These larger contract
wins, coupled with the benefits being realised from
the Group’s capital investment strategy and focus on
efficiency improvements enabled a significantly improved
performance to be realised in the second half. The
structural steel businesses also benefited from the
additional skilled labour recruited from overseas.

The larger projects undertaken by Billington Structures
during 2022 included:
• Shepperton Film Studios - London
• Sandwell Aquatics Centre - Birmingham
• Magna Park Industrial Units - Lutterworth
• Wakefield Trinity RUFC Stadium - Wakefield
• Segro Industrial Unit - Coventry

Shafton Steel Services

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. Newhurst Energy
from Waste development was the winner of the 2022
Tekla, industrials category award.

Billington Structures has a strong order book for 2023
and is seeing additional significant future project
opportunities at stable margins. This includes more
complex projects, such as large industrial warehousing,
stadia, film studios and renewable energy infrastructure.
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.

Specialist Protective Coatings

In March 2022 the Group announced the formation of a
new subsidiary, Specialist Protective Coatings Ltd ("SPC"
or “Specialist Protective Coatings”), focused on surface
preparation and the application of protective coatings
for products across a variety of sectors including rail,
highways, defence, petrochemical, energy, structural
steel and infrastructure. The business was formed
following the Company's acquisition out of administration
of the trading assets of Orrmac Coatings Ltd ("Orrmac
Coatings"), a specialist painting company based in
Sheffield, UK, in January 2022.

The Group had 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, based
in a 55,000 square foot facility in Sheffield, it has
undergone a substantial refurbishment and an 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 in the UK.

The business has made good progress since its
formation, servicing both internal Billington work and
external customers. In particular, the benefits of the
newly installed equipment, which was operational from
November 2022, is enabling the business to focus on
maximising margin from its opportunities. A second shift
is also being implemented at SPC to maximise the ability
to service the demand being experienced. This demand
is expected to increase in 2023 as a number of historic
competitors have exited the market.

In addition, the Group established a dedicated on-site
painting service to enable SPC to be a one-stop-shop for
the painting requirements of the structural steel sector.
This service has seen significant demand and further
expansion in the number of on-site painting teams is
expected in 2023.

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 its strong
performance during the year, again recording record

revenue and maintaining robust margins, undertaking
substantial work as part of contracts with Billington
Structures and for third parties. The business operated at
near full capacity during the year and whilst there was an
impact from increased steel prices, strong margins were
maintained.

Contracts were secured from a variety of sectors, with
particularly strong demand from projects in the leisure,
data centre and industrial warehousing sectors.

Notable projects undertaken in 2022 included:
• Cherry Park Residential Development - Stratford
• Siemens Wind Turbine Blade Facility - Hull
• KLON2 Data Centre - Harlow
• HH4 Data Centre Ph2 - Hemel Hempstead

Peter Marshall Steel Stairs enjoys a secure market
position, as one of the largest companies in its sector,
in what is a fragmented market. The outlook for the
business continues to be very positive, with a strong
order book for the remainder of 2023, comprising both
projects being undertaken by Billington Structures and
third parties. Additional skilled labour has been secured
from overseas to ensure the business has the capability
and capacity to fulfil this demand.

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.

Easi-Edge continued to see lower than pre-pandemic
levels of utilisation as the commercial office market, a
sector that requires a greater amount of product when
compared to most other types of projects, such as
distribution warehouses, remained subdued. However,
the business remained a significant contributor to Group
profits and benefited from historic investment in its
product.

Easi-Edge continues to take advantage of its market
leading position, securing opportunities in those market
sectors where new developments are being undertaken
and it is anticipated that activity for the remainder of 2023
will be similar to that achieved in 2022.

Significant projects undertaken by Easi-Edge in 2022
included:
• Deyes High School - Manchester
• Aintree Fire Training Facility - Liverpool
• Mynydd School - Mold
• Lancashire Cricket Ground Hotel - Manchester

Hoard-it

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. An expanded graphics
solution, Brand-it, was introduced in 2021, which is being
utilised on both Hoard-it’s own product 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. Brand-it is a continuation of the desire
to increase the product range of the company with high
quality, higher margin products to its clients.

Hoard-it had an exceptional 2022, outperforming
management’s expectations and operating at full
capacity for much of the year. It continued to take
advantage of its industry leading position and growing
demand from tier one and tier two contractors, together
with further adding to its product offering. The Brand-it
graphics solution has enabled the business to diversify
into residential developments and during the year Hoard-
it secured its largest ever order of over £0.5 million for a
large mixed-use development in Kent.

Other significant projects were undertaken for both new
and existing customers, as the client base expanded
in line with the goal of ensuring the Hoard-it system
becomes the number one choice for main contractors
and developers in the built environment. Hoard-it
particularly benefited from the Group’s investment in
stock levels in advance of anticipated demand, enabling
rapid deployment of its solutions and providing a degree
of mitigation for inflationary pressures on its materials to
ensure margins were protected.

Notable projects in 2022 undertaken by Hoard-it
included:
• Mixed-used Residential and Leisure Scheme, - Hythe -

2,500 linear meters

• Wigan Galleries project - Wigan - 700 linear meters
• Coundon Secondary School - Coventry - 650 linear

meters

The positive momentum has continued into the current
year with a good pipeline of new business for 2023 and
plans to expand the business geographically into areas of
the UK currently underserved.

Our People

Billington, alongside the wider steel industry has
struggled with the recruitment of sufficient skilled UK
production and technical labour at its facilities in recent
years, resulting in reduced capacity and under recovery
of its overheads. In order to address these issues the
Group has both continued to train and develop skilled
labour locally and has recruited skilled labour from
overseas.

Close relationships are being maintained with a number
of 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 remains in partnership with Betterweld, a
specialist training provider, to provide fabrication/welding
training at an external facility before being employed by
the Group. This partnership provides access to increased
numbers of direct personnel on a consistent basis at its
two Barnsley based facilities through a structured training
and development programme.

We continue to actively promote the company’s
apprenticeship and graduate schemes in other areas,
particularly focusing on technical staff. 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 Group
to train, educate and progress structural steelwork
fabricators.

Despite the continuing programmes to develop skilled
personnel locally, it has become necessary for the Group
to recruit skilled labour from overseas in order to meet
the shortfall in available skilled personnel and increase
the production capacities of the Company. In 2022 a
total of 26 staff members were recruited from overseas.
These highly skilled fabricators, welders and technical
staff, have already proved to be a strong asset for the
business, being deployed in Billington Structures, Shafton
Steel Services, Peter Marshall Steel Stairs and Group
services.

Kendal Westmorland General Hopsital

Canvey Island, Essex

Average staff numbers in 2022 increased by 8.3 per
cent, with 415 employed at the year end. We anticipate a
further modest increase in staff numbers in 2023.

Health, Safety, Sustainability, Quality and the
Environment

A commitment to health, safety, sustainability, quality
and the environment is core to everything that Billington
does.

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. 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. We are also actively involved in a number
of initiatives both locally and nationwide to ensure the
safety of our and others staff.

2023 will see the roll out of a behavioural safety
programme across all Group facilities to further enhance
the safety culture and eliminate all avoidable accidents.

Minimising the impact of our operations on the
environment remains a strong focus. The Group has
implemented a number of initiatives aimed at reducing
the carbon footprint of our activities. All new energy
contracts being entered into by Group companies are
“green” tariffs that include carbon offsetting and the
Group is investigating the installation of wind turbines
and solar power where possible at its facilities. We are
also focused on reducing energy usage where possible,
altering or replacing machinery where appropriate, and
utilising hybrid, electric and biofuel vehicles.

The Group implemented a formal ESG committee in 2021
and significant progress has been made to investigate,
benchmark and develop a roadmap for carbon reduction
initiatives associated with the activities of the Company.
Steel Zero, a commitment to become carbon neutral and
employ a responsible steel sourcing strategy was joined
in the year as part of the Group’s journey to be a leader in
driving carbon reduction initiatives.

The Group’s primary requirement for energy comes from
electricity, as opposed to gas, and a large proportion
of the Group’s four-year fixed energy price contracts
end in 2023. On renewal there will be an increase

in Group costs, but the price of long term electricity
supply contracts is reducing and the impact on Group
profitability will be significantly less than that caused by
material price increases.

The Group is also conscious of other environmental
impacts from its operations and is seeking to reduce
these as far as possible. Weld fume extraction is one
area of particular focus and covered by extensive
legislation. Approximately £400,000 has been invested
in this area to ensure the Group meets current and
expected future legislative requirements, together with
ensuring the safety and wellbeing of its staff and the
wider community.

Charity

In 2017 the Billington Charity Foundation was established
and Billington continues to be a significant advocate and
supporter of both local and national charities.

Throughout 2022, Billington donated to charities
including Macmillan Cancer Support, The Trussell Trust,
Andy’s Man Club and Weston Park Cancer Charity,
together with a range of local sports teams and other
causes that our employees are involved with. The Group
actively 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.

Shafton Steel Services

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.

Steel Industry

Following the significant increases in steel prices
experienced in 2020 (approximately 40%) and 2021
(approximately 60%) as a result of the fluctuating cost
of steelmaking raw materials combined with escalating
energy prices, 2022 was a period of further significant
volatility. The onset of the conflict in Ukraine in early
2022 led to a restriction in the availability of some raw
materials used in the steel making process and of some
steel products, particularly plate, leading to further price
escalation. The Company sought to protect itself against
the plate shortage through directly importing material
into the UK and temporarily utilising its cash resources to
maintain certainty of price and availability.

From March to October 2022 a reduction in steel prices
was experienced, before further price rises in the later
part of the year. Additional price increases have been
noted in early 2023, although the Group expects a more
stable price outlook in 2023 when compared to the last
three years.

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
undertaken when considered appropriate, enables most
projects principal pricing risk to be covered, mitigating
the immediate impact. Although, over the longer-term,
price rises are passed onto customers as far as possible.
The Group also continually reviews its steel procurement
strategy in order to reduce its reliance on any one
supplier as far as possible.

Strategy and Acquisition

The Group has continued its strategy of improving
operating margins 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. The benefits of this strategy
have been seen in the improved operating margins
achieved in 2022 and the Group will continue to invest to
ensure the Group maximises the inherent value within the
business and capitalises upon its strong market position
within the industry.

In 2022 we established a new trading subsidiary,
Specialist Protective Coatings, following the Company’s
acquisition of the trading assets of Orrmac Coatings
out of administration. The establishment of Specialist
Protective Coatings and the investment we have made
in the business during the year, including setting up a
dedicated on-site painting service, is already providing
the Group with increased control of a significant
subcontract trade that had previously been outsourced
and is ensuring the margin associated with this trade
is maintained within the business. We will continue to
invest in this area in order to grow capacity and be able
to service the demand we are seeing.

Prospects and Outlook

The first half of 2022 was a period of stabilisation and
continued recovery following the Covid-19 related
disruption to the market, with a number of lower margin
legacy contracts being completed, before a significant
improvement in the Group’s trading performance in the
second half of the year as higher margin contracts were
delivered.

Whilst macroeconomic headwinds are likely to remain
for some time, particularly with regard to material
availability, energy costs, price volatility and continuing
inflationary pressures, we are seeing a consistent stream
of opportunities at more attractive margins and have a
very healthy order book. The benefits of the Group’s
investment in efficiency improvements and people,
coupled with its strong market position, is enabling the
Group to achieve higher than historic margins and to
focus on those sectors that can deliver better returns.

Contracts secured in 2022 for two energy from waste
facilities and a number of large industrial production /
warehousing projects are good examples of the type
of business we are managing to secure. We are also
seeing other opportunities particularly in large retail
distribution warehouses, data centres, 'Gigafactories',
food processing developments, public sector works, rail
infrastructure and stadium developments, together with
a return of some commercial office development projects
and for projects outside of the UK.

I would like to thank my Board colleagues and all of
Billington’s staff for their hard work and dedication,
and our shareholders and other stakeholders for their
continued support.

Supported by a robust balance sheet I believe Billington
is well placed for the future, and I expect to see a further
improvement in financial performance in 2023.

Mark Smith
Chief Executive Officer

17 April 2023

FINANCIAL REVIEW

Revenue

Profit before tax

£86.6m

£5.8m

Operating
profit margin

6.8%

Net cash inflow

£1.2m

Cash and cash
equivalents

£11.6m

Earnings per share from
continuing operations

39.1p

Consolidated Income Statement

Revenue

Operating profit/(loss)

Profit/(loss) before tax

Profit/(loss) after tax

Profit/(loss) for shareholders

Operating profit margin

Return on capital employed*

Earnings/(loss) per share (basic)

2022
£’000

86,614

5,911

5,829

4,734

6.8%

29.7%

39.1 p

Underlying
2021
£’000

Non-Underlying
2021
£’000

82,720

1,339

1,302

978

1.6%

8.4%

8.1p

(1,123)

(910)

(7.5)p

Total
2021
£’000

82,720

216

179

0.3%

1.4%

0.6p

*Operating profit divided by total equity less the net defined benefit pension surplus and net cash.

Revenue increased 4.7 per cent year on year as a result
of increased output across both trading segments of the
Group. Structural Steel output increased 2.7 per cent and
output related to Safety Solutions increased 21.4 per cent,
primarily related to additional site hoarding provided
through Hoard-It.

Forecasts indicate that the consumption of structural
steelwork within the UK increased to 894,000 tonnes in
2022 from 801,000 tonnes in 2021, an increase of 12 per
cent. Projections indicate that consumption will reduce
by 3 per cent to 867,000 tonnes in 2023 before returning
to growth with a forecast 0.5 per cent increase to 871,000
tonnes in 2024. The UK market outlook and the forecast
severity and duration of a recessionary period is now
anticipated to be shallower and shorter in duration than
was previously forecast allowing the Company to look
forward with cautious optimism.

Underlying operating margins increased to 6.8 per cent
in the year as a result of tight cost control, production
efficiencies arising from a program of capital investment,
successful resolution of legacy accounts and increased
stability in input costs in the second half of the year.
The operating margin achieved within the Safety
Solutions entities continued its positive progression, on
increased output, at 22.3 per cent (2021: 17.9 per cent).
The operating margin achieved within the Structural

Steelwork entities represented a significant improvement
against the prior period, at 5.8 per cent (2021 -
underlying: 0.1 per cent).

Underlying earnings per share increased from 8.1 pence
in 2021 to 39.1 pence in 2022 representing an increase of
383 per cent.

Cash management and prudent utilisation was a primary
focus during the year. During the first half of the year,
with escalating steel price rises, the conscious decision
was made to pre order quantities of steel to preserve
and enhance margins on future contracts. With reduced
volatility in input costs relating to steel in the second
half of the year the cash utilisation eased and the year
concluded with a more normalised gross cash balance
of £11.6 million (2021: £10.4 million). The average gross
cash balance during the year was £7,890,000 (2021:
£13,390,000). 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.

As a result of rising interest rates the remaining mortgage
of £750,000 associated with the purchase of the Shafton
site in 2015 was repaid in January 2023.

Wigan Galleries

Average staff numbers in 2022 increased 8.3 per cent
to 403, with an overall rise in staff costs of 14.9 per cent
year on year excluding the cost associated with Share
Based Payments (SBP). Industry wide challenges remain
to ensure wage inflation is mitigated and in attracting
sufficient quality resource across all disciplines. At the
year end employee numbers increased to 415 and the
Group anticipates a further modest increase in staff

numbers in 2023 as further overseas labour arrives in the
UK.

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.

2022
£’000

21,902

38,774

(22,506)

(3,823)

34,347

2021
£’000

17,527

35,428

(21,705)

(1,858)

29,392

Further investment projects to improve operational
efficiencies and increase certain manufacture capacities
were commenced just prior to the year end, with a further
order being placed for a saw / drill line for the Yate facility.
The machine was delivered in March 2023 with a forecast
two-month installation period.

Consolidated Balance Sheet

Non current assets

Current assets

Current liabilities

Non current liabilities

Total equity

As part of the capital investment programme across the
Group two further significant capital expenditure projects
were completed. One project, at Shafton, related to
the investment in substantially increasing the plate
processing capacity and capabilities to provide additional
plate girder profiling capacity, combined with increasing
the capacity open to external customers. The second
project related to the replacement of an aged saw / drill
machine at the Wombwell facility.

The acquisition of the trading assets of Orrmac Coatings
Ltd out of administration and the formation of Specialist
Protective Coatings Limited has seen a number of capital
investment projects completed at its Sheffield facility over
the course of the year. £1,171,000 of capital expenditure
was incurred in modernising the facility in 2022, the
largest single project being the installation of a new
shotblast machine, designed for the efficient processing
of structural steelwork.

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 three years.

Within non-current assets, property, plant and equipment
increased by £4,410,000, represented by capital
additions of £6,558,000 (including £2,078,000 related
to right of use assets in respect of IFRS16), depreciation
charges of £2,044,000 and net disposals of £105,000.

The defined benefit pension scheme has performed well
in the period against a backdrop of turbulent equity and
bond markets towards the latter part of 2022. At the year
end, a surplus of £2,174,000 along with a corresponding
deferred tax liability of £544,000 has resulted in a net
recognised surplus of £1,630,000. The scheme was
closed to future accrual in 2011.

The net deferred tax liability at the year end was
£1,525,000 (2021: £1,108,000), being a deferred
tax liability of £981,000 (2021: £440,000) related to
temporary timing differences, combined with a deferred
tax liability of £544,000 (2021: £668,000) related to the
defined benefit pension scheme surplus.

Consolidated Cash Flow Statement

The increase of £3,346,000 in current assets included an
increase of £4,731,000 in inventories and contract work
in progress, a decrease of £1,958,000 in trade and other
receivables, and an increase in the gross cash balance of
£1,252,000.

Retention balances, contained within trade and other
receivables outstanding at the year end, were £2,198,000
(2021: £1,951,000). It is anticipated that £1,992,000 will be
received within one year and £206,000 in greater than
one year.

Trade and other payables increased by £589,000.
Within this, trade payables and accruals decreased
£1,655,000 and £1,187,000 respectively with contract
liabilities increasing £3,430,000 and minor movements
being noted in social security and other taxes and other
payables.

Total equity increased by £4,955,000 in the year to
£34,347,000. The financial position of the Group at the
end of the year remains robust and provides a strong
platform to drive shareholder value.

Working Capital

Working capital at the year end was as below:

Inventories and contract work in progress

Trade and other receivables

Trade and other payables

Working capital at end of year

2022
£’000

16,882

10,258

(22,044)

5,096

2021
£’000

12,151

12,216

(21,455)

2,912

Cash balances at the year end totalled £11,634,000 and
there were property loans outstanding of £750,000
representing a net cash position of £10,876,000 (2021:
£9,382,000). 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 steel to mitigate some of the price
escalations during the year and mitigate margin pressure.

2023 to 2025 will see the continued 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 offer 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.

The strong cash position also 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.

2022
£’000

4,734

2,044

(4,516)

(404)

192

1,095

2021
£’000

1,960

(2,351)

(246)

111

(2,064)

(3,565)

(363)

(250)

806

(22)

1,252

10,382

11,634

(515)

(250)

(53)

(4,744)

15,126

10,382

Result for shareholders

Depreciation

Capital expenditure

Investment property movement

Tax received/(paid)

Tax per income statement

Increase in working capital

Dividends paid

Net property loan movement

Share based payment charge/(credit)

Others

Net cash inflow/(outflow)

Cash at beginning of year

Cash at end of year

Dividends of £363,000 were paid in the year.

A dividend has been proposed in respect of the 2022
financial year of 15.5 pence per share (£2,005,000),
covered 2.52 times earnings and will be paid to
shareholders in July 2023 upon approval at the AGM.
Confidence in future trading and cash generation has led
to the declaration of a dividend at a level higher than any
previously made by the Company.

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.

Thorpe Park, Leeds

Pension Scheme

Scheme assets

Scheme liabilities

Surplus

Other finance expense

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 liabilities have
moved broadly in line with the scheme’s assets. The
assets are primarily invested in UK Government bonds
and the scheme continues to remain in a strong surplus
position with an unlikely requirement that funds will be
required from the Company in the foreseeable future.

Next, Brookfield

2022
£’000

6,820

(4,646)

2,174

(13)

2021
£’000

9,693

(7,020)

2,673

(33)

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.

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 996,669 (2021: 474,577) share
options outstanding at an average exercise price of £0.14
(2021: £0.29) per share. Share options are in place in
HMRC approved and unapproved schemes.

The charge included within the accounts in respect of
options in issue is £806,000 (2021: credit £53,000).

Trevor Taylor
Chief Financial Officer

17 April 2023

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. Appointed as Chief Executive on 1 January 2015.
An in depth knowledge of construction industry for over 30 years
driving for growth and profit in competitive markets.

Trevor Michael Taylor
Chief Financial Officer
Appointed: 31/10/2011

Nationality: British

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.

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.

Alexander Ospelt
Non Executive Director
Appointed: 01/01/2013

Nationality: Liechtensteiner

Stephen John Wardell
Non Executive Director
Appointed: 14/01/2019

Nationality: British

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.

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.

Directors
Ian Lawson - Non Executive Chairman
Mark Smith - Chief Executive Officer
Trevor Taylor - Chief Financial Officer
John Gordon - Non Executive Director
Alexander Ospelt - Non Executive Director
Stephen Wardell - Non Executive Director

Secretary
Darren Kemplay

Registered Office
Barnsley Road, Wombwell
Barnsley, South Yorkshire S73 8DS

Auditor
Grant Thornton UK LLP
Chartered Accountants & Statutory Auditors
No.1 Whitehall Riverside, Leeds LS1 4BN

Registered in England
Company Number - 02402219

Sandwell Aquatics Centre, Birmingham

REPORT OF THE DIRECTORS

The Directors present their report together with the audited financial statements for
the year ended 31 December 2022.

Results and Dividends

The consolidated income statement is set out on page
37 and shows the result for the year.

A final dividend in respect of 2021 of 3.0 pence
(£363,000) per ordinary share was paid on 3 July 2022.
No interim dividends were paid in 2022. A final dividend
has been proposed in respect of 2022 of 15.0 pence
(£1,940,000) per ordinary share. 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.

Following a review of unclaimed dividends over 12
years old, in accordance with the Company's Articles
of Association a write-back of £142,000 has been
recognised during the year.

Financial Risk Management
Objectives and Policies

The Group uses financial instruments 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 interest rate risk, liquidity risk, credit
risk and pricing risk. The Directors review and agree
policies for managing each of these risks and they are
summarised below.

Interest rate risk

The Group finances its operations through a mixture of
retained profits and bank borrowings on an individual
company basis. The Group's exposure to interest rate
fluctuations on its borrowings is managed on a Group
basis through the use of floating facilities on individual
company accounts.

Billington Holdings Plc ordinary 10p shares

Ian Lawson

Mark Smith

Trevor Taylor

John Gordon

Alexander Ospelt

Stephen Wardell

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 14 & 20 to the
consolidated financial statements).

Pricing risk

The Group is exposed to commodity price risk as a result
of its operations. The risk is managed securing purchase
prices as soon possible after an order is received from a
customer to mitigate the expsoure and risk.

Directors

All Directors served throughout the year.

In accordance with the Articles of Association
Mr J.S. Gordon and Mr A. Ospelt retire and
Mr A. Ospelt offers himself for re-election.

The interests of the Directors at the year end in shares
of the company were as follows:-

31 December 2022

1 January 2022

Options

17,200

19,554

19,323

82,270

6,500

337,115

252,835

17,200

17,161

17,438

82,270

6,500

160,968

120,904

The Directors outstanding options at the year of the year were as follows:

Streamlined Energy and Carbon Reporting (‘SECR’)

Deferred Bonus Plan

LTIP 2020 - 2022

LTIP 2022 - 2023

LTIP 2022 - 2024

Statement of Directors’ Responsibilities

The Directors are responsible for preparing the Strategic
Report and the Report of the Directors 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 to prepare the financial statements in
accordance with UK-adopted international accounting
standards and have elected to prepare the parent
company financial statements in accordance with United
Kingdom Generally Accepted Accounting Practice
(United Kingdom Accounting Standards and applicable
law, 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 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;

• prepare the financial statements on the going concern

basis unless it is inappropriate to presume that the
company will continue in business.

• for the parent Company financial statements, state

whether applicable UK accounting standards have been
followed, subject to any material departures disclosed
and explained in the financial statements;

The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Group’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
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.

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

Mark Smith

Trevor Taylor

Exercise price exercise date

Expected

18,160

69,153

123,359

126,443

337,115

13,620

51,864

92,519

94,832

252,835

nil

Apr 23

Apr 24

Apr 25

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
trading performance in 2022 are detailed in the Financial
Review and they demonstrate the robust position of the
Group heading into 2023.
The Group has a gross cash balance of £11.6 million at 31
December 2022 and no significant long-term borrowings or
commitments. The Group repaid its only remaining borrowing
shortly after the period end, being £0.75m relating to the
mortgage on the Shafton site taken out in 2015 in order to
reduce the interest cost associated with the loan. The Group
has short term agreed overdraft facilities with its bankers
should they be required, these are reviewed annually and
have not been utilised during 2022.
The Group has maintained it strong cash position
notwithstanding the continued capital expenditure
programme currently being completed. The capital
expenditure programme across the Group is part of the
Group’s operational improvement programme that is,
and will continue to, yield production efficiency gains in
the short to medium term. The Directors have prepared
forecasts covering the period to April 2024 and approved
by the Board in February 2023. Pleasingly the impacts
of COVID-19 subsided during the course of 2022 with a
number of deferred or cancelled projects returning to the
market ensuring levels of output to be maintained.
The orderbook at the period end date increased 71% from
the prior year with high quality contracts across a number of
buoyant market sectors and with financially robust clients.
The Russia / Ukraine conflict that commenced in the early
part of 2022 has resulted in increased uncertainty across
the globe. There have been consequential impacts on
material availability, energy prices, input costs and latterly
the possibility of a recessionary period in the UK are noted
by the directors and the anticipated effects addressed
and mitigated where possible. Workloads and anticipated
margins across the Group remain buoyant and to date there
has been limited impact to trading levels.
The Group anticipates making further progress in terms
of volumes and efficiency enhancements in 2023. The
Directors are forecasting trading performance will continue
to improve, generating positive cash flows and continuing
to build on a strong, debt free statement of financial
position.
The Directors have reviewed the Group’s forecasts
and projections for the period to April 2024, including
sensitivity analysis to assess the Group’s resilience to
potential adverse outcomes including a highly pessimistic
‘severe but plausible’ scenario. This scenario is based
on a significant reduced trading performance for some
of the entities within the Group and no further orders
being received for the Group’s primary trading entity.
Furthermore, significant contract deterioration from that
anticipated at the period end date has been assumed
in the pessimistic scenario. Notwithstanding the stress
tests that have been completed on the forecasts and
projections the Group projects that it would have sufficient
resources to continue trading without the requirement for
any external funding requirements.

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
2022 were used.

For the year ended 31 December 2022 the energy usage is as follows:

2022
KwH

2021 restated
KwH

Total energy consumption used to calculate emissions:

6,125,967

6,235,991

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

2022
Tonnes of
CO2e

2021 restated
Tonnes of
CO2e

517

206

521

1,265

14.6

542

234

539

1,353

16.4

The Group's approach to environmental matters is
included within the Sustainable and Responsible
Business Report.

The Group maintains the BCSA Gold Standard awarded
for meeting the requirements of the Steel Construction
Sustainability Charter. During the year, Billington has
joined the SteelZero initiative committing to procure 100%
net zero steel by 2050.

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.

Following the establishment of the Environmental, Social
and Governance Committee during the prior year, the
Committee has started the process to set environmental
targets for the Group and starting to implement various
policies and procedures to work towards achieving
carbon accreditation.

During the year, the Group has placed purchased further
fully-electric and hybrid vehicles and has installed electric
charging points at the head offices. The project to migrate
all lighting to LED across the Group has continued during
the year.

The prior year comparatives have been restated due to
notifcation from our electricity supplier in 2022 that the
incorrect electricity usage has been stated on invoices
from August 2021 to December 2021.

Research and Development

Research and development expenditure during the year
was £95,000 (2021: £86,000).

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 these
stakeholders are included in the Governance Report.

Corporate Governance

The Group's Statement on corporate governance can
be found in the 'Governance Report' of these financial
statements. The corporate governance report forms part
of this directors report and is incorporated into it by cross
reference.

Post Balance Sheet Events

As a result of rising interest rates the remaining mortgage
of £750,000 associated with the purchase of the Shafton
site in 2015 was repaid in January 2023 in order to
mitigate future interest costs.

Auditor

Grant Thornton UK LLP have expressed their willingness
to continue in office. In accordance with Section 489 (4) of
the Companies Act 2006 a resolution to reappoint Grant
Thornton UK LLP will be proposed at the Annual General
Meeting.

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

Darren Kemplay
Company Secretary

Billington Holdings Plc
Company Number - 02402219
17 April 2023

STRATEGIC REPORT FOR THE
YEAR ENDED 31 DECEMBER 2022

The Directors present their report together with the audited financial statements
for the year ended 31 December 2022.

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, Peter Marshall Steel Stairs Limited and Specialist
Protective Coatings 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 and branding systems

Key Non-financial Performance Indicators

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.

Production efficiency

Hire stock utilisation

AFR (own employees)

Average employee numbers

Apprentice intake

Staff turnover (excluding restructuring)

2022

119%

56%

0.22

403

18%

2021

123%

61%

0.57

372

16%

Principal Risks and Uncertainties

Principal risks and uncertainties have been reviewed and
updated. There are no new principal risks or uncertainties
identified 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.

Data Centre, Slough

Credit risk
Current economic conditions have impacted on the
Group's ability to maintain full credit protection on all
customers. This will remain an important issue for the
foreseeable future that will be constantly monitored to
ensure the Group is not exposed to an unacceptable
level of risk.

Failure to manage the above principal risks, as far as
the Group is able, could lead to significant impact 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

Applications for employment by disabled persons are
given full and fair consideration, having due regard
to their capabilities and abilities in relation to the jobs
available.

It is the policy of the Group that training, career
development and promotion opportunities should be
available to all employees.

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 11).

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

Darren Kemplay
Company Secretary

Billington Holdings Plc
Company Number - 02402219
17 April 2023

City Square, Leeds

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
against they 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.

RAF Coningsby

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.

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.

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.

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.

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 roadmap
for the Group's desire to become Carbon Zero will be
established early in 2023.

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.

During the year the Company has become a member
of SteelZero, which a commitment to procure, specifiy
or stock 100% net zero steel by 2050 and an interim
commitment to procure, sepcify or stock 50% of our steel
requirement by 2030.

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.

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

11/11

10/11

6/11

11/11

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
a 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.

NewCold, Corby

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 2022, which comprise the consolidated
income statement, the consolidated statement of
comprehensive income, the consolidated statement
of financial position, the consolidated statement
of changes in equity, the consolidated cash flow
statement, the notes forming part of the Group
financial statements, the principal accounting
policies, the parent company statement of financial
position, the parent company statement of changes
in equity and the notes forming part of the parent
company financial statements, including a summary
of significant 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 2022 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.

Our evaluation of the directors’ assessment of the group’s
and the parent company’s ability to continue to adopt the
going concern basis of accounting included:

• evaluating management’s board paper, which

incorporated detailed cashflow forecasts covering
the period to 30 April 2024, along with challenge and
assessment of the inputs and assumptions used to
prepare the forecast;

• evaluating the historical accuracy of forecasting in

relation to going concern assessments;

• evaluating management’s forecasts and their

consideration of the magnitude of a decline in cash that
would give rise to the elimination of the headroom in the
cash flow forecast, including performing an additional
sensitivity analysis to those performed by management;
and

• testing management’s severe but plausible scenario

to corroborate that there is adequate headroom in the
forecast to cover unforeseen cost increases or reduced
revenues.

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 inflation and the crisis in Ukraine and we 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.

Our auditor’s report for the year ended 31 December
2021 included one key audit matter that has not been
reported as a key audit matter in our current year’s report,
that being Going concern. Going concern has not been
assessed as a key audit matter as a result of improved
results and cash flow forecasts.

Scoping has been undertaken to ensure appropriate
coverage of the significant risks as well as coverage of the
key results in the financial statements:

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.

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.

Our responsibilities and the responsibilities of the
directors with respect to going concern are described in
the relevant sections of this report.

Our approach to the audit

Overview of our audit
approach

Overall materiality:

Group: £433,000, which
represents 0.5% of the
group’s revenue.

Parent Company:
£231,000, which
represents 1% of the
parent company’s total
assets.

Materiality

Key Audit
Matters

Scoping

One key audit matter has been identified which remains
the same as the previous year:

• Inappropriate recognition of revenue (Group)

We performed an audit of the financial information of
two components using component materiality (full-
scope audit procedures). We performed specific-scope
audit procedures on a further three components
using component materiality. We performed analytical
procedures on the financial information of the remaining
two group components using group materiality.

Key audit matters

Description

Audit response

KAM

Disclosures

Our results

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.

In the graph below, we have presented the key audit
matters, significant risks and other risks relevant to the
audit.

Key Audit Matter – Group

How our scope addressed the matter – Group

Inappropriate recognition of revenue
We identified inappropriate recognition of revenue in
relation to open construction contracts as one of the
most significant assessed risks of material misstatement
due to fraud.

Under International Standard on Auditing UK (ISA (UK))
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.

Revenue is recognised in accordance with International
Financial Reporting Standard (IFRS) 15 ‘Revenue from
Contracts with Customers’ and recognition of revenue
requires management to make judgements relating to:

• allocation of consideration,

• assessing the stage of completion for a contract
derived from the total expected contract costs; and

• forecasting margin derived from the expected

contract value and total expected contract costs.

This risk relates to the occurrence assertion. This area
includes management judgement over incomplete
contracts at the year end and varying degrees of
complexity associated with individual contracts.

The judgements made by management create the
opportunity for fraud, which increases the associated
risk in relation to revenue recognition.

In responding to the key audit matter, we performed the
following audit procedures:

• Evaluated the group’s 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
assessed whether 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 per 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
by reference to the accuracy of the percentage of
completion. We 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; and

• Tested the historical accuracy of forecasting by comparing
final results of completed contracts to original forecasts.

Relevant disclosures in the Annual Report
and Accounts 2022
• 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 the audit work performed, we have not identified
material misstatements in respect of the revenue recognition for
open construction contracts.

High

Potential
ﬁnancial
statement
impact

Low

Inventory

Cash at bank
and in hand

Going concern

Inappropriate
recognition
of revenue

Contract costs

Management override of controls

Trade receivables and contract work in progress

Share based
payments

Pension
surplus

Trade payables
and accruals

Contract liabilities

Provision for
contract losses

Key audit matter

Signiﬁcant risk

Other risk

Extent of management judgement

High

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

£433,000, which is 0.5% of the group’s
revenue.

£231,000, which is 1% of the parent
company’s total assets.

Specific materiality

We determined a lower level of specific
materiality for the following areas:

Significant judgements made
by auditor in determining
materiality

In determining materiality, we made the
following significant judgements:

• Directors remuneration; and

• Related party transactions

• Identification of the metric most relevant to
the users of the financial statements, which
was determined to be total assets for the
parent company;

• The parent company does not trade and is

the holding company for the Group.

Materiality for the current year is higher than
the level that we determined for the year
ended 31 December 2021 to reflect both the
increase in the parent company’s total assets
and also the percentage benchmark applied.

• Identification of the metric most

relevant to the users of the financial
statements, which was determined
to be revenue following the review
of broker reports and the previous
financial statements;

• Revenue is considered to be the most
stable benchmark given the volatility
in profit before tax that can arise due
to the variability and timing of contract
completions; and

• Revenue is also a key performance
metric for the stakeholders of the
group and is presented as the first
financial highlight on page 7.

Materiality for the current year is higher
than the level that we determined for
the year ended 31 December 2021 to
reflect both the increase in the group’s
total revenue and also the percentage
benchmark applied.

Communication of
misstatements to the
audit committee

We determine a threshold for reporting unadjusted differences to the audit committee.

Threshold for communication £22,000 and misstatements below

that threshold that, in our view, warrant
reporting on qualitative grounds.

£12,000 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

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

£303,000, which is 70% of financial
statement materiality.

£162,000, which is 70% of financial statement
materiality.

Significant judgements made
by auditor in determining the
performance materiality

In determining performance materiality,
we made the following significant
judgements:

• The number and value of errors
identified in the prior year, along
with identified control deficiencies,
were significant enough to result
in decreasing the performance
materiality threshold.

In determining performance materiality, we
made the following significant judgements:

• The number and value of errors identified in
the prior year, along with identified control
deficiencies, were significant enough
to result in decreasing the performance
materiality threshold.

Total revenue £86,614,000
FSM £433,000, 0.5%

PM £303,000, 70%
TFPUM £130,000, 30%

Total assets £23,426,000
FSM £231,000, 1%

PM £162,000, 70%
TFPUM £69,000, 30%

FSM: Financial statements materiality, PM: Performance materiality, TFPUM: Tolerance for potential uncorrected misstatements

An overview of the scope of our audit

Changes in approach from previous period

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:

• an additional component has been included within our
audit scope for the first time as the group’s year end is
also the component’s first year end since incorporation.

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 group’s 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 revenue and qualitative
factors, such as the 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)

• full-scope audit procedures were performed on

the financial information of two components using
component materiality. These procedures included
a combination of tests of details and analytical
procedures.

• specific-scope audit procedures were carried out on a
further three components using component materiality.
These procedures included a combination of tests of
details and analytical procedures and were designed
to increase coverage of the group’s financial statement
line items.

• for the two components that were not individually
significant to the group, we carried out analytical
procedures. Where there were material balances in
these components that affect the group, we performed
procedures on those balances to determine whether
there was evidence of material misstatement.

Performance of our audit

• the going concern assessment was tested as part of our

work at a group and parent company level.

• the inappropriate recognition of revenue key audit

matter was addressed with the full-scope and specific-
scope audit procedures across the components per the
scope described above.

• audit procedures across all components were
performed by the group engagement team in
accordance with the scope described. There were no
component engagement teams engaged to support the
group engagement team.

• one component within the group has not been subject
to the full-scope audit prcoedures employed in the
previous year owing to its financial insignificance in the
context of the group as a whole.

Audit
approach

No. of
components

% coverage
revenue

Full-scope audit

Specific-scope audit

Analytical procedures

84%

16%

Other information

The other information comprises the information included
in the Annual Report and Accounts 2022, other than the
financial statements and our auditor’s report thereon.
The directors are responsible for the other information
contained within the Annual Report and Accounts 2022.
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.

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 themsleves. 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 their environment
obtained in the course of the audit, we have not identified
material misstatements in the strategic report or the
report of the directors.

Matters on which we are required to report by
exception
We have nothing to report in respect of the following
matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:

• adequate accounting records have not been kept by the
parent company, or returns adequate for our audit have
not been received from branches not visited by us; or

• the parent company financial statements are not in

agreement with the accounting records and returns; or

• certain disclosures of directors’ remuneration specified

by law are not made; or

• we have not received all the information and

explanations we require for our audit.

Responsibilities of directors for the financial
statements
As explained more fully in the directors’ responsibilities
statement set out on page 17, 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.

Irregularities, including fraud, are instances of non-
compliance with laws and regulations. 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 identified areas of laws and regulations that could
reasonably be expected to have a material effect on
the group and parent company financial statements
from our general commercial and sector experience
and through discussion with the directors. We also
discussed the policies and procedures regarding
compliance with laws and regulations with them.

• 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.

• In assessing the potential risks of material misstatement,

we obtained an understanding of:

- the group 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 group and parent company’s control

environment, including:

• management’s knowledge of relevant laws and
regulations and how the company is complying
with those laws and regulations;

• the adequacy of procedures for authorisation of

transactions; and

• procedures to ensure that possible breaches of
laws and regulations are appropriately resolved.

• Audit procedures performed by the engagement team

included:

- evaluation of the programmes 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.

Specialist Protective Coatings

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

17 April 2023

• 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.

• The engagement partner’s assessment of the
appropriateness of the collective competence
and capabilities of the engagement team included
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 group and

parent company operates; and

- understanding of the legal and regulatory

requirements specific to the group and parent
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.

• We communicated relevant laws and regulations and
potential risks to all engagement team members and
remained alert to indications of fraud or non-compliance
with laws and regulations throughout the audit.

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.

CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022

CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME FOR THE
YEAR ENDED 31 DECEMBER 2022

A63 Hull

Revenue

Raw materials and consumables

Other external charges

Staff costs

Depreciation

Other operating charges

Impairment losses

Operating profit/(loss)

Net finance expense

Profit/(loss) before tax

Tax

Profit/(loss) for the year

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

Basic earnings per share

Diluted earnings per share

All results arose from continuing operations.

Note

2022
£’000

Underlying Non-Underlying
2021
£’000

2021
£’000

86,614

82,720

Total
2021
£’000

82,720

(55,784)

(4,542)

(16,268)

(1,960)

(2,827)

(1,123)

(51,277)

(55,784)

(4,792)

(4,542)

(19,566)

(16,268)

(2,044)

(3,024)

(1,960)

(2,827)

(80,703)

(81,381)

(1,123)

(82,504)

5,911

(82)

5,829

(1,095)

4,734

39.1p

37.8p

1,339

(37)

1,302

(324)

978

8.1p

(1,123)

213

(910)

(7.5)p

216

(37)

179

(111)

0.6p

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

2022
£’000

4,734

(486)

122

(364)

4,370

2021
£’000

1,023

(348)

675

743

The statement of accounting policies and notes 1 to 27 form part of these Group financial statements.

CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022

CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY FOR THE YEAR
ENDED 31 DECEMBER 2022

Assets

Non current assets

Property, plant and equipment

Investment property

Pension asset

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

Current tax payable

Total current liabilities

Non current liabilities

Long term borrowings

Lease liabilities

Deferred tax liabilities

Total non current liabilities

Total liabilities

Net assets

Equity

Share capital

Share premium

Capital redemption reserve

Other components of equity

Retained earnings

Total equity

Note

2022

2021

£’000

17, 18

3,334

13,548

10,258

11,634

250

22,044

143

500

1,798

1,525

19,264

464

2,174

21,902

38,774

60,676

14,854

2,673

17,527

35,428

52,955

1,894

10,257

12,216

679

10,382

250

21,455

22,506

21,705

750

1,108

1,858

23,563

29,392

1,293

1,864

132

(770)

26,873

29,392

3,823

26,329

34,347

1,293

1,864

132

(761)

31,819

34,347

At 1 January 2021

Transactions with owners

Dividends

Debit relating to equity-settled
share based payments

ESOT movement in year

Transactions with owners

Profit for the financial year

Other comprehensive income

Actuarial gains 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

(515)

(53)

(13)

(581)

(53)

(568)

1,023

(348)

743

At 31 December 2021

1,293

1,864

132

(770)

26,873

29,392

At 1 January 2022

Transactions with owners

Dividends (note 6)

Credit relating to equity-settled
share based payments

ESOT movement in year

Transactions with owners

Profit for the financial year

Other comprehensive income

Actuarial loses 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

(770)

26,873

29,392

(221)

806

(9)

576

4,734

806

585

4,734

(486)

122

4,370

At 31 December 2022

1,293

1,864

132

(761)

31,819

34,347

The Group financial statements were approved and authorised for issue by the Board of Directors on 17 April 2023.

The Group retained earnings reserve includes a surplus of £1,630,000 (2021 - £2,005,000) relating to the net pension surplus (note 24).

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.

Specialist Protective Coatings

CONSOLIDATED CASH FLOW
STATEMENT FOR THE YEAR ENDED
31 DECEMBER 2022

Note

Cash flows from operating activities

Group profit after tax

Taxation received/(paid)

Interest received

Depreciation on property, plant and equipment

Share based payment charge/(credit)

Profit on sale of property, plant and equipment

Taxation charge recognised in income statement

Net finance expense

Increase in inventories and contract work in progress

Decrease in trade and other receivables

Increase in trade and other payables

Net cash flows from operating activities

Cash flows from investing activities

Purchase of property, plant and equipment

Purchase of investment property

Proceeds from sale of property, plant and equipment

Net cash flow from investing activities

Cash flows from financing activities

Interest paid

Repayment of bank and other loans

Capital element of leasing payments

Dividends paid

Net cash flow from financing activities

Net increase/(decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

The statement of accounting policies and notes 1 to 27 form part of these Group financial statements.

2022
£’000

4,734

192

2,044

806

(309)

1,095

(4,731)

1,958

709

6,606

(4,516)

(404)

348

(4,572)

(95)

(250)

(74)

(363)

(782)

1,252

10,382

11,634

2021
£’000

(246)

1,960

(53)

(221)

111

(7,073)

660

2,848

(1,888)

(2,351)

294

(2,057)

(25)

(250)

(9)

(515)

(799)

(4,744)

15,126

10,382

PRINCIPAL ACCOUNTING POLICIES

These consolidated financial statements have been prepared under the historical
cost convention. except for the revaluation of the pension assets and liabilities, and in
accordance with the accounting policies set out below which comply with UK-adopted
international accounting standards and are effective from 1 January 2022.

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

Going concern

The consolidated financial statements have been prepared
on 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
trading performance in 2022 are detailed in the Financial
Review and they demonstrate the robust position of the Group
heading into 2023.

The Group has a gross cash balance of £11.6 million at 31
December 2022 and no significant long-term borrowings or
commitments. The Group repaid its only remaining borrowing
shortly after the period end, being £0.75m relating to the
mortgage on the Shafton site taken out in 2015 in order to
reduce the interest cost associated with the loan. The Group
has short term agreed overdraft facilities with its bankers
should they be required, these are reviewed annually and have
not been utilised during 2022.

The Group has maintained its strong cash position
notwithstanding the continued capital expenditure programme
currently being completed. The capital expenditure
programme across the Group is part of the Group’s operational
improvement programme that is, and will continue to, yield
production efficiency gains in the short to medium term. The
Directors have prepared forecasts covering the period to April
2024 and approved by the Board in February 2023. Pleasingly
the impacts of COVID-19 subsided during the course of 2022
with a number of deferred or cancelled projects returning to the
market ensuring levels of output to be maintained.

The orderbook at the period end date increased 71% from
the prior year with high quality contracts across a number of
buoyant market sectors and with financially robust clients.

The Russia / Ukraine conflict that commenced in the early
part of 2022 has resulted in increased uncertainty across the
globe. There have been consequential impacts on material
availability, energy prices, input costs and latterly the possibility
of a recessionary period in the UK are noted by the Directors
and the anticipated effects addressed and mitigated where
possible. Workloads and anticipated margins across the Group
remain buoyant and to date there has been limited impact to
trading levels.

The Group anticipates making further progress in terms of
volumes and efficiency enhancements in 2023. The Directors
are forecasting trading performance will continue to improve,
generating positive cash flows and continuing to build on a
strong, debt free statement of financial position.

The Directors have reviewed the Group’s forecasts and
projections for the period to April 2024, including sensitivity
analysis to assess the Group’s resilience to potential adverse

outcomes including a highly pessimistic ‘severe but plausible’
scenario. This scenario is based on a significant reduced
trading performance for some of the entities within the Group
and no further orders being received for the Group’s primary
trading entity. Furthermore, significant contract deterioration
from that anticipated at the period end date has been assumed
in the pessimistic scenario. Notwithstanding the stress tests
that have been completed on the forecasts and projections
the Group projects that it would have sufficient resources
to continue trading without the requirement for any external
funding requirements.

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.

(a) Changes in accounting policies

New and revised standards that are effective for annual
periods beginning on or after 1 January 2022.

Accounting pronouncements which have become effective from
1 January 2022 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.

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 based on the level of costs
incurred as a proportion of the total anticipated costs..
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 included 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.

(d) Property, plant and equipment

(h) Taxation

Property, plant and equipment is stated at cost, net of
depreciation and any provision for impairment.

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

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

Plant, equipment and vehicles

2% to 4%

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) Investment property

Investment property is carried at fair value determined
annually by the Directors by reference to current market
rents and investment property yields for comparable
properties. No depreciation is provided. Changes in
fair value are recognised in the consolidated income
statement.

(f) 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.

(g) 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.

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.

(i) 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.

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.

(k) 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.

(l) Share-based payment transactions

The Group issues equity-settled share-based payments.
These share-based payments are measured at fair value
at the date of grant using the Black-Scholes model based
on the Group’s estimate of shares that will eventually
vest. The fair value determined is then expensed in the
consolidated income statement on a straight-line basis
over the vesting period, with a corresponding increase in
equity. Further details are included in notes 3 and 11.

(m) 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.

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.

( j) 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.

(n) 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.

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

Subsequent measurement of financial assets
Financial assets at amortised cost

Trade receivables are initially measured at the transaction
price upon inception.

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

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.

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.

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 20 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:

(o) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and
demand deposits.

(p) 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

(q) 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 21).

"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.

(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 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.

Sandwell Aquatics Centre, Birmingham

NOTES FORMING PART OF THE GROUP
FINANCIAL STATEMENTS FOR THE YEAR
ENDED 31 DECEMBER 2022

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, Peter Marshall
Steel Stairs Limited and Specialist Protective Coatings
Limited. 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.

Structural
steelwork
£’000

Safety
solutions
£’000

Other
£’000

Total
£’000

31 December 2022

Revenue

From external customers

From other segments

Segment revenues

Elimination of segment revenues

Revenue

Raw materials and consumables

Other external charges

Staff costs

Depreciation

Other operating (charges)/income

Segment operating profit/(loss)

31 December 2021

Revenue

From external customers

From other segments

Segment revenues

Elimination of segment revenues

Revenue

Raw materials and consumables

Other external charges

Staff costs

Depreciation

Other operating (charges)/income

Segment operating profit/(loss) - underlying

Impairment losses - non-underlying

Segment operating profit/(loss)

2. Revenue and profit before tax

75,977

76,017

(47,607)

(3,143)

(15,162)

(969)

(4,696)

4,440

73,960

114

74,074

(52,948)

(3,261)

(13,008)

(663)

(4,096)

(1,123)

(1,025)

10,637

612

11,249

(3,670)

(1,649)

(1,926)

(760)

(730)

2,514

8,760

398

9,158

(2,836)

(1,281)

(1,623)

(1,023)

(756)

1,639

319

(2,478)

(315)

2,402

(72)

235

(1,637)

(274)

2,025

349

86,614

971

87,585

(971)

86,614

(51,277)

(4,792)

(19,566)

(2,044)

(3,024)

5,911

82,720

747

83,467

(747)

82,720

(55,784)

(4,542)

(16,268)

(1,960)

(2,827)

1,339

(1,123)

216

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 17% and 15% respectively
(2021: two contractors greater than 10% with 14% and 10%

respectively) of Group revenue. One of the contractors
with revenue of greater than 10% in 2021 is also one of
the customers with revenue of greater than 10% in 2022.
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:

31 December 2022

United Kingdom

31 December 2021

United Kingdom

Structural Steelwork

Safety Solutions

Contracts with
customers
£’000

Other sources
of revenue
£’000

Hire
revenue
£’000

Other sources
of revenue
£’000

Total
£’000

72,841

71,845

3,136

2,115

6,206

6,055

4,431

86,614

2,705

82,720

Information about contract balances

Contract work in progress - gross

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 £2,052,000. This has all been
recognised as revenue for the year ended 31 December
2022.

2022
£’000

13,548

5,804

(5,482)

2021
£’000

11,215

(958)

8,454

(242)

(2,052)

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

Depreciation

Foreign exchange (gains)/losses

Profit on disposal of property, plant and equipment

2022
£’000

2021
£’000

113

2,044

(5)

(309)

1,960

(221)

The non-underlying item separately identified on the face of the income statement in the prior year is a one-off
significant impairment loss of £1,123,000 against trade receivables and contract work in progress due to a customer
entering administration.

4. Net finance expense

Payable on bank loans and overdrafts

Interest expense for leasing arrangements

Receivable on bank balances

Other finance income

Pension scheme (see note 24)

Net finance expense

5. Tax on profit

The tax charge represents:

Corporation tax at 19% (2021 - 19%)

Adjustments in respect of prior years

Total current tax

Deferred tax charge at 25% (2021 - 25%)

Adjustments in respect of prior years

Total tax charge for the year

3. Staff costs

Staff costs during the year including Directors:

Wages and salaries

Social security

Pension costs

Share-based payments

2022
£’000

16,361

1,749

650

806

19,566

2021
£’000

14,343

1,408

570

(53)

16,268

The average number of production employees of the Group during the year was 232 (2021 - 213).

The average number of administration employees of the Group during the year was 171 (2021 - 159).

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
2022
£’000

Total
2021
£’000

Executive

M. Smith

T. M. Taylor

Non-executive

I. Lawson

J.S. Gordon

S.J. Wardell

A. Ospelt

Employer’s NI

Share based payment/(credit)

Key management personnel compensation

Short-term employee benefits

Post-employment benefits

Share based payment/(credit)

270

199

639

103

184

389

293

855

524

1,463

907

524

1,463

309

243

726

(13)

798

766

(13)

798

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

During the year two Directors (2021: two Directors) exercised share options with a total gain on exercise of £17,022
(£9,519 related to the highest paid Director).

During the year no Directors (2021: no Directors) participated in defined benefit pension schemes and two Directors
(2021: two Directors) participated in a defined contribution pension scheme.

The tax assessed for the year is at the standard rate of corporation tax in the United Kingdom of 19% (2021: 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% (2021: 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

2022
£’000

5,829

1,108

(144)

(3)

152

(23)

1,095

In the Spring Budget 2021, the UK Government announced that from 1 April 2023 the corporation tax rate would increase
to 25%. This new law was substantially enacted on 24 May 2021. Deferred taxes at the balance sheet date have been
measured using these enacted tax rates and reflected in these financial statements.

In the Autumn Statement in November 2022, the government confirmed the increase in corporation tax rate to 25% from
April 2023.

2022
£’000

2021
£’000

(34)

(61)

(13)

(82)

2022
£’000

505

556

593

(54)

1,095

(25)

(33)

(37)

2021
£’000

(169)

(165)

284

(8)

111

2021
£’000

179

(18)

(4)

120

(36)

111

6. Dividends

A final dividend in respect of 2021 of 3.0 pence (£363,000) per ordinary share was paid on 3 July 2022. No interim
dividends were paid in 2022. A final dividend has been proposed in respect of 2022 of 15.5 pence (£2,005,000) per
ordinary share. 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.

Following a review of unclaimed dividends over 12 years old, in accordance with the Company's Articles of Association a
write-back of £142,000 has been recognised during the year.

7. Earnings per share

Basic earnings per share

Diluted earnings per share

2022

39.1p

37.8p

Underlying Non-underlying
2021

2021

8.1p

(7.5)p

Total
2021

0.6p

Basic earnings per share is calculated by dividing the profit for the year of £4,734,000 (2021: profit for the year of
£68,000 and underlying profit for the year of £886,000) by 12,117,190 (2021: 12,106,797) fully paid ordinary shares, being
the weighted average number of ordinary shares in issue during the year, excluding those held in the ESOT.

Diluted earnings per share is calculated by dividing the profit for the year of £4,734,000 (2021: profit for the year of
£68,000 and underlying profit for the year of £886,000) by 12,507,863 (2021: 12,106,797) fully paid ordinary shares, being
the weighted average number of ordinary shares in issue during the year, excluding those held in the ESOT, plus shares
deemed to be issued for no consideration in respect of share-based payments of 386,481 (2021: nil).

8. Property, plant and equipment

Freehold
property
£’000

Long
leasehold
property
£’000

Plant
equipment &
vehicles
£’000

Assets
under
construction
£’000

Total
£’000

28,082

2,351

921

421

(921)

Depreciation
At 1 January 2021

Charge for year

Disposals

At 1 January 2022

Charge for year

Disposals

At 31 December 2022

Net book value at 31 December 2022

Net book value at 31 December 2021

Freehold
property
£’000

Long
leasehold
property
£’000

Plant
equipment &
vehicles
£’000

Assets
under
construction
£’000

942

1,030

1,113

7,241

7,384

125

(125)

131

2,947

1,000

12,479

1,872

(1,411)

12,940

1,830

(1,422)

13,348

8,742

6,049

334

421

Total
£’000

13,546

1,960

(1,536)

13,970

2,044

(1,422)

14,592

19,264

14,854

Freehold property includes £3,986,000 in respect of land which is not subject to depreciation. Long leasehold property
includes £1,000,000 in respect of land which is not subject to depreciation.

The Group has a contractual commitment to acquire plant of £970,000 payable in 2023. There were no other material
contractual commitments to acquire property, plant and equipment at 31 December 2022 (2021: £1,099,000).

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

9. Investment Property

At 1 January 2022

Additions

Transfer from property, plant and equipment

At 31 December 2022

2022
£’000

404

464

Cost
At 1 January 2021

Additions

Reclassification

Disposals

At 1 January 2022

Additions

Reclassification

Transfer to investment property

Disposals

At 31 December 2022

8,414

1,125

8,414

(60)

8,354

(125)

1,000

2,078

3,078

17,622

1,930

921

(1,484)

18,989

4,146

421

(1,466)

22,090

City Square, Leeds

(1,609)

421

334

(421)

28,824

6,558

(60)

(1,466)

334

33,856

The fair value of the investment property as at 31 December 2022 is equivalent to the cost. No depreciation is provided.
Changes in fair value are recognised in profit or loss.

10. Investments

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:

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

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

Dormant

100

Specialist Protective Coatings Limited was incorporated on 21 December 2021.

11. 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.

As of 31 December 2022 the Trust held 812,945 (2021: 821,330) ordinary shares of 10p each in the capital of the
company (6.29% of the allotted share capital (2021: 6.35%)). The market value of the shares in the ESOT Trusts at
31 December 2022 was £2,235,599 (2021: £1,930,126).

12. Inventories

Raw materials

2022
£’000

3,334

2021
£’000

1,894

Raw materials recognised as an expense in the Income Statement for the year ended 31 December 2022 totalled
£4,223,000 (2021: £2,691,000).

The provision against the value of raw materials at the balance sheet date was £84,000 (2021: £115,000).

No reversal of previous write-downs was recognised as a reduction of expense in 2022 or 2021. None of the inventories
are pledged as securities for liabilities.

Dividends have been waived by the Trust.

13. Contract work in progress

During the year ended 31 December 2022, 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

2022
No.

474,577

730,827

(8,385)

(203,350)

993,669

77,309

Number of shares

2021
No.

Weighted average exercise price
2021
£

2022
£

514,395

0.29

0.43

(12,401)

(27,417)

474,577

53,914

0.14

1.78

3.03

0.29

2.56

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:

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 2020 - 2022

LTIP 2022 - 2023 LTIP 2022 - 2024

18 Jan 2016

23 Dec 2020

27 July 2022

303p

263p

25.0%

Nil

1.5%

295p

196.5p

nil

n/a

Nil

n/a

nil

n/a

Nil

n/a

nil

n/a

Nil

n/a

3 years

2 years

3 years

The underlying volatility was determined by reference to historical data of the Company's shares over a period of time
since its flotation. No special features inherent to the options granted were incorporated into measurement of fair value.

The total charge for the year was £806,000 (2021: credit of £53,000).

Contract work in progress

2022
£’000

13,548

2021
£’000

10,257

The provision against contract work in progress at the balance sheet date was £nil (2021: £958,000).

14. Trade and other receivables

Amounts due from customers:

- Trade receivables

- Retentions due within one year

- Retentions due after one year

Total

Other receivables

Prepayments and accrued income

2022
£’000

2021
£’000

5,908

1,992

206

8,106

909

1,243

10,258

8,394

1,667

284

10,345

889

982

12,216

Detailed disclosures relating to the credit risk exposures and analysis relating to the allowance for expected credit
losses are in note 20. Certain trade receivables were found to be impaired and a loss allowance for lifetime credit
losses of £551,000 (2021: £542,000) has been recorded accordingly. The amount debited to the consolidated income
statement for the year in relation to expected credit losses was £54,000 (2021: £126,000).

The movement in the expected lifetime credit losses for trade receivables can be reconciled as follows:

Balance at 1 January

Impairment loss

Receivables written off during the year

Balance at 31 December

2022
£’000

542

(45)

551

2021
£’000

441

126

(25)

542

15. Trade and other payables

Trade payables

Social security and other taxes

Other payables

Contract liabilities

Accruals

16. Cash and cash equivalents

Cash at bank and in hand

Short term deposits

17. Long term borrowings

Property loans (note 18)

2022
£’000

12,884

595

177

5,482

2,906

22,044

2022
£’000

6,623

5,011

11,634

2022
£’000

750

2021
£’000

14,539

620

151

2,052

4,093

21,455

2021
£’000

10,382

2021
£’000

1,000

18. Property loans

Loans at commercial rates -

due within one year

repayable within five years

2022
£’000

2021
£’000

250

500

750

250

750

1,000

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.

19. Deferred tax liability

Deferred tax provided in the financial statements is set out below and is calculated using a tax rate of 25% (2021: 25%).

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

2022
£’000

2021
£’000

(440)

(541)

(981)

(777)

(204)

(981)

(544)

(1,525)

(156)

(284)

(440)

(623)

183

(440)

(668)

(1,108)

Billington Holdings Plc and its wholly owned UK subsidiaries have applied the tax consolidation legislation, which means
that these entities are taxed as a single entity. As a consequence, the deferred tax assets and deferred tax liabilities of
these entities have been offset in the consolidated financial statements.

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.

In the Autumn Statement in November 2022, the government confirmed the increase in corporation tax rate to 25% from
April 2023.

Specialist Protective Coatings

20. 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:

Sandwell Aquatics Centre, Birmingham

31 December 2022

Current financial assets

Trade and other receivables

Cash and cash equivalents

Liabilities

Trade and other payables

Lease liabilities

Non-current borrowings

Current borrowings

31 December 2021

Current financial assets

Trade and other receivables

Cash and cash equivalents

Liabilities

Trade and other payables

Non-current borrowings

Current borrowings

Total
£’000

9,015

11,634

20,649

13,061

1,798

500

250

15,609

Total
£’000

11,234

10,382

21,616

14,690

750

250

15,690

All financial instruments in the current and prior year are held at amortised cost.

Financial instruments risk
Risk management objectives and policies

investments are managed to generate lasting returns.

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

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 when required,
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 interest rate
risk, which results from both its operating and investing
activities.

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 2022, 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% (2021: +/- 1%). These changes are considered
to be reasonably possible based on observation of
current market conditions. The calculations are based
on a change in the average market interest rate for
each period, and the financial instruments held at each
reporting date that are sensitive to changes in interest
rates. All other variables are held constant.

31 December 2022

31 December 2021

Profit for the year

Equity

+1%

(8)

(10)

-1%

+1%

(8)

(10)

-1%

Credit risk analysis
Credit risk is the risk that a counterparty fails to discharge
an obligation to the Group. The Group is exposed to
credit risk from financial assets including cash and cash
equivalents held at banks, trade and other receivables.

Credit risk management
The credit risk is managed on a group basis based on the
Group’s credit risk management policies and 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
2022 and 1 January 2022 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 2022 was determined as follows:

Expected credit rate loss

Gross carrying amount (£’000)

Lifetime expected credit loss (£’000)

Current

4,743

106

More than
30 days

Trade receivables days past due
More than
60 days

More than
90 days

12%

960

118

447

95%

295

279

Total

6,445

537

Liquidity risk

As at 31 December 2022 the Group's financial liabilities have contractual maturities (including inetrest payments where
applicable) which are summarised below:

31 December 2022

Trade payables

Other payables

Property loans

Lease liabilities

Current within
six months
£’000

Current six to
twelve months
£’000

Between one
and five years
£’000

Greater than
five years
£’000

12,884

177

146

108

13,315

142

116

258

524

927

1,451

1,265

This compares to the maturity of financial liabilities for the Group in the previous reporting period which was as follows:

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

Greater than
five years
£’000

14,539

151

136

14,826

134

780

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.

21. Equity

Called up share capital

Allotted and fully paid

Ordinary shares of 10p each

“A” ordinary shares of 10p each

2022

2021

No. of shares

£’000

No. of shares

£’000

12,860,959

73,368

12,934,327

1,286

1,293

12,860,959

73,368

12,934,327

1,286

1,293

The closing balance of the of the trade receivables loss allowance as at 31 December 2022 reconciles with the trade
receivables loss allowance opening balance as follows:

Both classes of share rank pari passu in all respects.

Opening loss allowance as at 1 January 2022

Loss allowance recognised during the year

Receivables written off during the year

Loss allowance as at 31 December 2022

Contract assets

£’000

542

(45)

551

Details of company share options outstanding at 31 December 2022 and treasury shares held by the ESOT are given in
note 11.

All contract assets are considered current as at 31 December 2022 and 31 December 2021. Expected credit losses are
assessed on an individual main contractor basis, based on their financial stability along with the credit insurance cover
held and current economic climate. The expected credit loss as at 31 December 2022 is £nil. The expected credit loss as
at 31 December 2021 was £958,000 as a result of a specific customer entering administration, which was considered a
one-off and non-recurring event and disclosed separately as a non-underlying item.

Other components of equity
The details of other components of equity are as follows:

At 1 January 2021

ESOT movement in year

At 31 December 2021

At 1 January 2022

ESOT movement in year

At 31 December 2022

22. Ultimate controlling related party

At the year end, the Directors considered that the Company had no ultimate controlling party.

23. Leases

The balance sheet shows the following amounts relating to leases:

Right of use assets included within property, plant and equipment

Property

Lease liabilities

Current

Non-current

ESOT
£’000

(783)

(770)

(761)

2022
£’000

1,947

2022
£’000

143

1,798

1,941

Total
£’000

(783)

(770)

(761)

2021
£’000

24. 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 £650,000 (2021:
£570,000).

Defined contribution schemes accounted for £650,000
(2021: £570,000) of this amount with £nil (2021: £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 2023.
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.

The scheme exposes the Group to actuarial risk such
as interest rate risk, investment risk, longevity risk and
inflation risk:

Interest rate risk

The present value of the defined benefit liabilities is
calculated using a discount rate determined by reference
to market yields of high quality corporate bonds. The
estimated term of the bonds is consistent with the
estimated term of the defined benefit obligation.

A decrease in market yield on high quality corporate
bonds will increase the value of the scheme's liabilities,
although it is expected that this would be offset partially by
an increase in the fair value of certain of the plan assets.

Investment risk

The plan assets at 31 December 2022 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.

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 at 31 December were:

There were additions of £2,078,000 to right of use assets during the year (2021: £nil).

The Group leased two properties during the year. 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 (included in net finance costs)

The total cash outflow for leases for the period was £135,000 (2021: £9,000).

2022
£’000

2021
£’000

131

Bonds - UK Government

Cash

Other

Total market value of assets

Present value of scheme liabilities

Surplus in the scheme

Related deferred tax liability

Net pension asset

2022
£’000

5,250

1,517

6,820

(4,646)

2,174

(544)

1,630

2021
£’000

7,838

1,828

9,693

(7,020)

2,673

(668)

2,005

2022
£’000

2021
£’000

The significant actuarial assumptions used for the valuation are as follows:

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

Scheme surplus

Analysis of the amount charged to other finance income:
Interest income

Interest on pension scheme liabilities

Administration cost

Total expense 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 from changes in financial assumptions

Actuarial gains from changes in demographic assumptions

Actuarial (losses)/gains from experience differing from that assumed

Total (loss)/gain 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)

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 from changes in financial assumptions

Remeasurement - actuarial gains from changes in demographic assumptions

Remeasurement - experience differing from that assumed

Benefits paid

At 31 December

(4,646)

6,820

2,174

172

(124)

(61)

(13)

(2,725)

2,443

(210)

(486)

2022
£’000

9,693

172

(2,725)

(259)

(61)

6,820

2022
£’000

(7,020)

(124)

2,443

(210)

259

(4,646)

(7,020)

9,693

2,673

110

(90)

(53)

(33)

544

461

1,023

2021
£’000

9,292

110

544

(200)

(53)

9,693

2021
£’000

(7,609)

(90)

461

200

(7,020)

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.

Rate of increase in pensionable salaries

Rate of increase in pensions in payment

Discount rate

Inflation assumption

2022
%

2.5

3.1

4.8

3.1

The mortality assumption adopted for the purposes of the calculations as at 31 December 2022 is as follows:

- Base table: S3PxA tables, year of birth

- Future mortality improvements: CMI 2021 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)

2022
£’000

25.0

26.7

27.5

29.3

2021
%

2.5

3.4

1.8

3.4

2021
£’000

24.9

26.7

27.5

29.2

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

2022
£’000

(279)

139

2021
£’000

(562)

281

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.

25. Related party transactions

During the year sales of £42,000 (2021 - £130,000) 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 2022 £38,000 (2021 - £12,000) 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.

26. Reconciliation of financing activities

At 1 January 2021

Cash flow

At 31 December 2021

Cash flow

Non-cash

At 31 December 2022

Cash and cash
equivalents
£’000

Property loans
£’000

Lease
liabilities
£'000

15,126

(4,744)

10,382

1,252

11,634

(1,250)

250

(1,000)

250

(750)

(2,307)

(1,941)

Total
£’000

13,876

(4,494)

9,382

1,598

(2,037)

8,943

27. Post balance sheet event

As a result of rising interest rates the remaining mortgage of £750,000 associated with the purchase of the Shafton site
in 2015 was repaid in January 2023 in order to mitigate future interest costs.

Project Mandolin Delta Park, Peterborough

PARENT COMPANY STATEMENT
OF FINANCIAL POSITION AS AT
31 DECEMBER 2022

PARENT COMPANY STATEMENT OF
CHANGES IN EQUITY FOR THE YEAR
ENDED 31 DECEMBER 2022

Non-current assets

Tangible assets

Investment property

Investments in subsidiaries

Deferred tax asset

Total non current assets

Current assets

Debtors

Cash at bank and in hand

Total current assets

Total assets

Current liabilities

Creditors

Current tax

Total current liabilities

Non-current liabilities

Long term borrowings

Total non-current liabilities

Total liabilities

Net assets

Capital and reserves

Share capital

Share premium

Capital redemption reserve

Other reserve

Retained earnings

Shareholders’ funds

Note

2022

2021

£’000

8,214

464

570

167

9,415

14,011

23,426

2,392

11,619

(5,781)

(3)

8,333

570

8,968

11,168

20,136

1,335

9,833

(3,163)

(63)

(5,784)

(3,226)

(500)

(750)

(500)

(6,284)

17,142

1,293

1,864

132

(761)

14,614

17,142

(750)

(3,976)

16,160

1,293

1,864

132

(770)

13,641

16,160

At 1 January 2021

ESOT movement in year

Profit for the financial year

Debit 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)

Accumulated
profits
£’000

Total
equity
£’000

13,136

15,642

(13)

1,050

(17)

(515)

(17)

(515)

At 31 December 2021

1,293

1,864

132

(770)

13,641

16,160

At 1 January 2022

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

Other
reserve -
ESOT
£’000

Accumulated
profits
£’000

Total
equity
£’000

1,293

1,864

132

(770)

13,641

16,160

(9)

644

559

(221)

644

559

(221)

At 31 December 2022

1,293

1,864

132

(761)

14,614

17,142

The notes 1 to 22 form part of these parent Company financial statements.

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 £644,000 (2021: £1,050,000).

The parent company financial statements were approved and authorised for issue by the Board of Directors on 17 April 2023.

Ian Lawson
Non-Executive Chairman

Trevor Taylor
Chief Financial Officer

The notes 1 to 22 form part of these parent Company financial statements.

Shafton Steel Services

NOTES FORMING PART OF THE PARENT
COMPANY FINANCIAL STATEMENTS FOR
THE YEAR ENDED 31 DECEMBER 2022

1. Company information

Billington Holdings Plc is a company domiciled in England
and Wales, registration number 02402219. The registered
office is Barnsley Road, Barnsley, S73 8DS.

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.

4. Accounting Policies

Basis of preparation of financial statements
The financial statements have been prepared on the
historical cost basis. The presentation currency is Sterling (£).

During the year, management have reviewed the
presentation of the Statement of Financial Position and have
adopted an adapted balance sheet format, to be consistent

with the Group financial statements and as management
consider that the new presentation provides reliable and
more relevant information and is an improvement on the
previous presentation.

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
trading performance in 2022 are detailed in the Financial
Review and they demonstrate the robust position of the
Group heading into 2023.

The Group has a gross cash balance of £11.6 million at 31
December 2022 and no significant long-term borrowings
or commitments. The Group repaid its only remaining
borrowing shortly after the period end, being £0.75m
relating to the mortgage on the Shafton site taken out
in 2015 in order to reduce the interest cost associated
with the loan. The Group has short term agreed overdraft
facilities with its bankers should they be required, these
are reviewed annually and have not been utilised during
2022.

The Group has maintained its strong cash position
notwithstanding the continued capital expenditure
programme currently being completed. The capital
expenditure programme across the Group is part of the
Group’s operational improvement programme that is,
and will continue to, yield production efficiency gains in
the short to medium term. The Directors have prepared
forecasts covering the period to April 2024 and approved
by the Board in February 2023. Pleasingly the impacts
of COVID-19 subsided during the course of 2022 with a
number of deferred or cancelled projects returning to the
market ensuring levels of output to be maintained.

The orderbook at the period end date increased 71% from
the prior year with high quality contracts across a number
of buoyant market sectors and with financially robust
clients.

The Russia / Ukraine conflict that commenced in the early
part of 2022 has resulted in increased uncertainty across
the globe. There have been consequential impacts on
material availability, energy prices, input costs and latterly
the possibility of a recessionary period in the UK are noted
by the Directors and the anticipated effects addressed
and mitigated where possible. Workloads and anticipated
margins across the Group remain buoyant and to date
there has been limited impact to trading levels.

The Group anticipates making further progress in terms
of volumes and efficiency enhancements in 2023. The
Directors are forecasting trading performance will continue
to improve, generating positive cash flows and continuing to
build on a strong, debt free statement of financial position.

• 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.

(d) 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.

(e) Investments
Within the parent company, investments in subsidiary
undertakings are stated at cost less provision for
permanent diminution in value.

(f) 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.

(g) Cash
Cash comprises cash at bank and in hand.

(h) 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.

(i) 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.

Financial liabilities are initially recognised at fair value.
Subsequently, financial liabilities are measured at
amortised cost using the effective interest method.

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.

( j) Leased assets
All leases are operating leases and the annual rentals are
charged wholly to profit or loss.

The Directors have reviewed the Group’s forecasts and
projections for 2023 and for at least 12 months from the
date of the approval of the financial statements, including
sensitivity analysis to assess the Group’s resilience to
potential adverse outcomes including a highly pessimistic
‘severe but plausible’ scenario. This scenario is based
on a significant reduced trading performance for some
of the entities within the Group and no further orders
being received for the Group’s primary trading entity.
Furthermore, significant contract deterioration from that
anticipated at the period end date has been assumed
in the pessimistic scenario. Notwithstanding the stress
tests that have been completed on the forecasts and
projections the Group projects that it would have sufficient
resources to continue trading without the requirement for
any external funding requirements.

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.

(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%

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.

(b) Investment property
Investment property is held at fair value and is subject
to measurement at each statement of financial position
date by reference to recent valuations by an independent
professional valuer, current market rates and yields for
comparable properties. No depreciation is provided.
Changes in fair value are recognised through retained
earnings.

(c) 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:

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

Operating lease rentals

6. Directors and employees

Staff costs during the year including Directors:

Wages and salaries

Social security

Pension costs

Share-based payments

The average number of administration employees of the company during the year was 21 (2021: 20).
Remuneration in respect of Directors was as follows:

Aggregate emoluments

Company pension contributions to a defined contribution scheme

2022
£’000

823

2022
£’000

2021
£’000

2022
£’000

1,607

246

559

2,481

105

2021
£’000

1,421

164

(17)

1,645

2021
£’000

682

7. Dividends

A final dividend in respect of 2021 of 3.0 pence (£363,000) per ordinary share was paid on 3 July 2022. No interim
dividends were paid in 2022. A final dividend has been proposed in respect of 2022 of 15.5 pence (£2,005,000) per
ordinary share. 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.

Following a review of unclaimed dividends over 12 years old, in accordance with the Company's Articles of Association a
write-back of £142,000 has been recognised during the year.

8. Property, plant and equipment

Cost

At 1 January 2022

Additions

Transfer to investment property

At 31 December 2022

Depreciation

At 1 January 2022

Charge for year

At 31 December 2022

Net book value at 31 December 2022

Net book value at 31 December 2021

Land & buildings
£’000

Plant & equipment
£’000

Assets under
construction
£'000

Total
£’000

9,199

(60)

9,139

892

975

8,164

8,307

133

157

107

120

9,332

(60)

9,309

999

1,095

8,214

8,333

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.

During the year no Directors (2021: no Directors) participated in defined benefit pension schemes and two Directors
(2021: two Directors) participated in a defined contribution pension scheme.

During the year two Directors (2021: two Directors) exercised share options with a total gain of £17,000 (£10,000 related
to the highest paid Director).

During the year £24,000 (2021: £24,750) was paid to third parties in respect of Directors' salaries.

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.

2022
£’000

372

2021
£’000

291

9. Investment property

Cost

At 1 January 2022

Additions

Transfers from property, plant and equipment

At 31 December 2022

Total
£’000

404

464

The fair value of the investment property as at 31 December 2022 is equivalent to the cost. No depreciation is provided.
Changes in fair value are recognised in retained earnings.

10. Investments

Cost

At 1 January 2022 and at 31 December 2022

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.

11. 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).

14. Long term borrowings

Bank loans

Bank loans are repayable as follows:

Within one year

Between one to two years

Between two to five years

2022
£’000

500

250

750

2021
£’000

750

250

500

1,000

Number of shares
2022
No.

2021
No.

Weighted average exercise price
2021
£

2022
£

The bank loans are secured by way of first legal mortgage over certain freehold properties of the Group.

Brought forward at 1 January

298,826

322,645

0.04

Granted

Exercised

Lapsed

Outstanding at 31 December

Exercisable at the end of the year

472,155

(8,385)

(124,707)

(12,401)

(11,418)

637,889

298,826

36,085

12,690

0.02

0.36

0.15

3.03

0.04

3.03

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 charge apportioned to Billington Holdings plc and recognised as debit in the
year was £559,000 (2021: credit of £17,000).

12. Debtors

Amounts falling due within one year

Amounts owed by group undertakings

Other debtors

Prepayments

2022
£’000

2,328

2,392

2021
£’000

1,265

1,335

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.

13. Creditors

Bank loans

Trade creditors

Amounts owing to group undertakings

Social security and other taxes

Accruals

2022
£’000

250

417

4,539

513

5,781

2021
£’000

250

252

1,999

126

536

3,163

15. Deferred tax

Deferred tax provided in the financial statements is set out below and is calculated using a tax rate of 25% (2021: 25%).

Accelerated capital allowances

Other short term timing differences

2022
£’000

(3)

170

167

2021
£’000

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.

16. Called up share capital

Equity

Allotted and fully paid

Ordinary shares of 10p each

“A” ordinary shares of 10p each

2022

2021

No. of shares

£’000

No. of shares

£’000

12,860,959

73,368

12,934,327

1,286

1,293

12,860,959

73,368

12,934,327

1,286

1,293

Both classes of share rank pari passu in all respects.

Details of company share options outstanding at 31 December 2022 and treasury shares held by the ESOT are given in
note 11 of the Group financial statements.

Amounts owed to group undertakings are payable on demand. Interest payable on these loans is charged at a market rate.

Next, Brookfield

17. 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.

18. Ultimate controlling related party

At the year end, the Directors considered that the Company had no ultimate controlling party.

19. 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 £69,000 (2021: £77,000).

Defined contribution schemes accounted for £69,000 (2021: £77,000) of this amount with £nil (2021: £nil) relating to
defined benefit schemes, where the benefits are based on final pensionable pay.

20. 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.

21. Contingent liabilities

The Company is part of the group cross guarantee to the principal bankers. At the year end there were no outstanding
liabilities.

22. Post balance sheet event

As a result of rising interest rates the remaining mortgage of £750,000 associated with the purchase of the Shafton site
in 2015 was repaid in January 2023 in order to mitigate future interest costs.

Billington Holdings Plc
Steel House, Barnsley Road, Wombwell, Barnsley, South Yorkshire S73 8DS
+44 (0) 1226 340666 | info@billington-holdings.plc.uk

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