Billington’s chief executive has welcomed “chinks of light” after a turbulent few years that had seen around a quarter of its 400 jobs cut, along with the closure of a technical and product office in Bristol.
The redundancies were made over the past two years, along with a change from double-shift to single-shift work credited with returning the structural steel specialist to financial stability.
Chief executive Steve Fareham said the redundancies were “unfortunate” but had been a necessary move for many firms in the sector to reduce capacity.
“The industry all thought that the sun would shine in six months, and six months became three years,” he told Construction News.
“Our improvements in efficiencies and diversification are starting to pay dividends… from the dark days where we were losing money, we’re now feeling a little better about it. There are chinks of light all over the place.”
In its last full-year results in March 2012, Billington saw revenue fall from £53.9m in 2011 to £383.2m, but losses before tax and exceptional items stood at £0.1m, down from £1.7m in 2011.
In a trading update for the six months ending 30 June 2013, the group’s directors said Billington was “trading ahead of market expectations”, having achieved £2.8m in annualised cost savings and made group operations more “appropriately right-sized to market conditions”.
Billington has also been targeting new markets, such as rail, energy-from-waste and offshore wind, as well as the export market, particularly in northern Europe, where it has won its first tenders this financial year.
The structural steel business also reported improving margins, though Mr Fareham stressed that these were from a “very low base” and that supply and demand were still “slightly out of kilter”.
Analyst WHI has increased its pre-tax profit expectations for the year for the firm to £0.6m, changing its evaluation of shares to ‘Buy’.
Mr Fareham believed there were “tentative signs of recovery” as bids returned to reasonable levels while competitors have exited the market over the past two to three years.
“The days when the industry was completely suicidal has certainly diminished,” he said.
“The events at Rowecord and the turmoil at Severfield did undermine the sector, but nonetheless with Severfield’s recovery I think we’re all grateful.”
Confidence, below-cost bids and the length of time it takes for projects to become real orders continued to present risks for the sector, he added, with clients becoming more wary of the balance sheets of their contractors.