The government appears to have averted the threat of the immediate closure of British Steel’s production in Scunthorpe – for now at least – but structural steelwork contractor Billington Holdings said today that closure would have made no difference to the UK construction industry.
According to Ian Lawson, chairman of Billington Holdings and previously chief executive of rival steelwork contractor Severfield, reckons that imported steel would be just as good for the UK construction industry as domestically-made steel.
Lawson said: “British Steel has recently announced the potential closure of their blast furnaces in the UK. Whereas there remains uncertainty as to the timing of any closure, there is not anticipated to be any impact in the ability of British Steel to service the UK constructional sections and rail markets, utilising imported steel billet.”
The government this week seized control of British Steel from its Chinese owner Jingye and is ensuring that raw materials form the USA and coking coal from Australia reaches Scunthorpe in time to keep the blast furnaces running.
New legislation passed last weekend, in an unprecedented move, gives government the power to direct the company’s board and workforce, ensure they get paid, and order the necessary raw materials. It has stopped short of nationalising British Steel but is seeking new investors for the business.
More concerning for steelwork contractors than the future of Scunthorpe is the general state of the economy. “The overall structural steel market currently remains subdued, with poor overall business confidence and increasing pricing pressure on projects being tendered,” Lawson said. “Order placement delays and contract deferments are increasingly being noted as a result of poor consumer and business confidence.”
However, he said that Billington was well placed to deal with these challenges. “We have a strong factory workload, coupled with a consistent stream of opportunities at sustainable margins, and with a strong balance sheet and appropriately positioned businesses, I believe Billington is well placed to deliver over the longer term,” he said.
Billington Holdings’ results for the year to 31st December 2024 show pre-tax profit down 19% at £10.8m (2023: £13.4m) on revenue down 15% at £113.1m (2023: £132.5m). However, 2023 had been a particularly strong year for Billington. Trading in 2024 was impacted by project delays, with uncertainty in the period around the general election and a slowdown in the economy. The overall consumption of structural steelwork in the UK in 2024 declined 4.3% with a market output of 855,000 tonnes.
Billington Holdings group remains debt free and had a cash balance at year end of £21.7m (2023: £22.1m).
Billington had a narrow escape from any major fall-out from the collapse of ISG last September. “Billington had historically traded with various ISG trading entities, delivering a number of high-profile projects, but at the time of administration, all contracts with ISG, and its trading subsidiaries, were substantially complete,” the chairman said. “I am pleased to report that the group has, post year end, received full settlement from its credit insurer in relation to ISG and the financial impact on Billington has been materially restricted to the excess on the group’s credit insurance policy.”
Chief executive Mark Smith said: “2024 was a strong performance by Billington, across all its business units, with benefits being seen from the group’s capital investment programme, and our specialist skills and innovative approach, against a very challenging market backdrop, particularly in the second half.
“The group has a strong level of contracts secured for delivery during 2025 and into 2026, combined with a significant pipeline of opportunities. However, the overall reduction in industry demand is leading to pricing pressure, particularly as competitors look to secure work to contribute to fixed overhead recovery, and the precise timing of certain projects remains uncertain. Despite these challenges Billington remains extremely well positioned within its industry, with a strong balance sheet, strong product offerings and an ability to weather downturns in a way that many of its peers cannot.
“We are optimistic that the market will see some recovery later in 2025, although the timing and nature of any upturn in economic confidence is uncertain. Billington is very well positioned to take advantage of improved market conditions when they arise and our financial stability and strong orderbook provides cautious optimism for the future.”
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