Steel firm Billington Holdings has warned of “more casualties” in the industry as the firm reported a £0.6m loss for the first six months of the year.
The structural steel company said more companies are likely to collapse because of increasing prices coupled with a harsh stance being taken by credit insurers
The firm – which entered joint venture BS2 with Bourne Steele earlier this year to enable the firms to bid for larger projects – saw profit before tax from continuing operations down from £1.1 million in the same period last year.
Revenue went up seven per cent to £22.8million, compared with £21.3m last time. Cash was down from £6.9m to £2.3m.
Billington’s chief executive Steve Fareham said the markets remain challenging, but that he is happy with the revenue growth.
He said: “The formation of BS2 was well received by the industry and will enable us to bid for bigger projects, whilst the acquisition of Peter Marshall was timely and complemented our own business.
“We are under no illusions, even though we expect margin pressures to ease in 2012; we realise that the construction market recovery will be a slow one.
“We remain cautious going forward, whilst positioning ourselves for growth. We have a strong balance sheet, the industry knowledge and relationships, to provide us with a degree of confidence in the current market conditions and look to 2012 with cautious optimism.”
The firm said the protracted and difficult economic conditions in the UK, along with a “capacity imbalance of steelwork contractors”, has resulted in poor margins.
Billington acquired the trade and assets of Peter Marshall (Fire Escapes) Limited in March, after it went into administration.
The company recorded pre-tax profit from continuing operations of £1.4m in 2010, compared to £5.3m in 2009.