Billington Holdings Plc posted a pre-tax profit of £4.6m for the first half of the year, up from £1.3m for the equivalent period in 2022.
The Barnsley-based group of structural steel and safety-solutions companies attributed its performance to the softening of energy price rises and the falling price of steel.
Billington chief executive Mark Smith said: “Whilst we remain mindful of continuing inflationary pressures and an uncertain macroeconomic outlook, we anticipate a robust performance in the second half of the year for the group.
“I believe that Billington is very well positioned to deal with market challenges and I now expect the group to deliver profits for the full year ahead of previous board expectations.”
In the first half of 2023, the firm saw a 30 per cent year-on-year increase in revenue from £46.2m to £60.2m. Its group-wide operating profit margin stood at 7.6 per cent.
Billington increased its headcount by about 10 per cent in the first half of the year, hiring about 40 people. Many of these were recruited from overseas, which Smith said reflected a shortfall in UK training.
He said the firm’s pipeline had been buoyed by work on energy-from-waste facilities, data centres and online-retail distribution warehouses, although he noted demand for the latter was falling.
Smith added that developers were more likely to aim toward pre-letting significant parts of new schemes, meaning fewer speculative projects were being greenlit. He also reported a softening demand for offices.
Smith said the firm had managed to dodge the impact of industry insolvencies in the past year, largely by targeting business with the most stable tier-one contractors.
Billington had worked on a large distribution centre for Buckingham Group, but it completed the contract by the time the contractor collapsed.
The firm had been impacted by delays to ISG’s £700m film-studio project, and Smith acknowledged difficulties in securing credit insurance on customers amid high levels of construction insolvency. “In uncertain times, insurers are as nervous as anybody, and they seek to mitigate their risk by reducing the number of contracts they underwrite,” he remarked.
Billington has also been supplying heavy steel plate sections to contractors working on HS2, although Smith said the firm would not be heavily impacted if the Birmingham-to-Manchester leg were to be scrapped, as has been recently rumoured.
Payment retention along the supply chain remains an issue for Billington. “Sometimes the retention that is held is more than the entire profit for the scheme – when that’s held for 12 months, or even 24 months, it’s unacceptable,” Smith said.
He added that his team had been looking into retention bonds, although their cost had increased because of contractor and client insolvency.