Steelwork contractor expecting bumper 2023 as pre-tax profit stays flat

Turnover at the steelwork firm helping build Everton鈥檚 new stadium, new studios for broadcaster Sky in Hertfordshire and new viaducts for HS2 in the West Midlands topped 拢400m for the first time last year.

Severfield said revenue was up 11% to 拢403m in the year to 26 March beating the previous record of 拢394m that it posted back in 2008.

But the country鈥檚 biggest steelwork contractor said pre-tax profit slipped 拢100,000 to 拢21m although it said underlying operating profit was up 11.5% to 拢27m.

ordsall

The firm has been targeting more rail work such as this scheme at Ordsall Chord near Manchester to capitalise on what it says is a 鈥榞olden age鈥� of infrastructure spending

It added that it was hit by non-underlying items of 拢6.1m which included 拢700,000 of costs relating to recent acquisitions Harry Peers and DAM Structures.

The firm said it had rejigged its divisional structure earlier this year to concentrate on three market areas 鈥� commercial and industrial, nuclear and infrastructure and products and processing which will include its modular range.

It said it had a record order book of 拢486m at the beginning of June of which 拢397m had been planned to start in the coming 12 months.

The firm, whose ongoing 100-plus projects include work on Lendlease鈥檚 new Google headquarters building at King鈥檚 Cross as well as Bam鈥檚 Co-op Live Arena in Manchester and Multiplex鈥檚 Argyle Street office scheme in Glasgow, said the impact of the war in Ukraine on its steel supply had not been too disruptive.

It said: 鈥淲e have experienced some increases in lead times and supply restrictions, upward pressures on costs due to tighter labour markets and significant price increases for certain products and services. This has included steel products, reflecting the volatility in iron ore prices, increased energy costs and, latterly, some supply restrictions as a number of steel products previously originated in Russia and Ukraine. Whilst not immune to these pressures, we have not experienced any significant disruptions to operations.鈥�

But it said it had a year-end net debt of 拢18.4m, from net funds of 拢4.4m last time, which it said 鈥渞eflects higher steel purchases to meet production needs in 2023 and the impact of steel price rises鈥�.

The firm鈥檚 joint venture in India, JSSL, which has been up and running since 2008, posted an after tax profit with Severfield鈥檚 share of the figure standing at 拢800,000. Revenue at the business doubled from 拢48m to 拢100m while its order book in India was up 拢18m to a record 拢158m.

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