Formerly known as AMCO Corporation, first half results from Billington reflected the benefits of its recent restructuring. Having disposed of its non-core and lumpy property development activities in April, the company is now focused on its structural steel and engineering operations under executive chairman Peter Hems.

Interim results to June showed good progress, with pre-tax profits from continuing operations moving ahead by 31% to £2.3m, driven by improved results from the structural steel business and reduced losses from the ‘back-end loaded’ specialist engineering operations, where management predicts improved full-year profits.

Hems says growth across the group is being driven by a leaning towards public sector work, as well as buoyant global demand for mineral resources, which is benefiting its mining machinery business Dosco. And though slowdown in construction activity, as well as rising input costs in the form of steel and energy, will throw up challenges, the company has healthy cash balances of £11.7m and a £55m order book with which to weather any storms. Competitors under pressure could also create acquisition opportunities.

For 2008, Brewin Dolphin analyst Mark Fleetwood forecasts a rise in adjusted pre-tax profits from £4.8m to £5m and in earnings from 28.6p to 30.2p. By 2009, he sees profits moving ahead to £5.3m, giving earnings of 32.4p. Based on those estimates – and expected dividends of 11.5p and 12p this year and next – Billington trades on inexpensive price-to-earnings multiples of 5.8 and 5.4, whilst offering investors a yield of around 6.6%.

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