Interim losses at Severfield widen as new chief executive begins strategic review

New Severfield chief executive Paul McNerney has begun a strategic review of the business as the steelwork contractor said interim pre-tax losses had increased on last time.

McNerney joined the business last month from Laing O’Rourke and overseeing his first set of numbers this morning, he said: “Since joining, I have initiated a strategic review of our markets, operations and organisational structure and I look forward to presenting the findings of this review in 2026.”

Severfield has recently been hobbled by the bill for carrying out repairs on several bridges, the majority of which are on the HS2 railway.

In July, the firm said it estimated the cost of sorting out the problems, which centre on welding defects, will be £43.4m although insurance recoveries of £20m will bring the hit down to £23.4m.

This morning it said the cost of the work had not gone up and that it had received the £20m in insurance.

But it added that it had racked up “other bridge related costs of £3.3m” in the six months to 27 September.

Revenue during the period was down 18% to £206m with pre-tax losses growing from £5.8m to £7.6m – a rise of 31%. Underlying profit nosedived from £16m to just £600,000, a fall of 96%.

Severfield said: “The results for the first half of FY26, which are in line with expectations, reflect a continued challenging market backdrop across the UK and Europe. Financial performance in H1 was impacted by lower levels of activity across the Group, driven by subdued demand, some contract delays and a sustained period of tighter pricing, particularly for near-term work.”

But it said it had secured “a number of significant new projects” as part of a £429m order book of which £324m was due to be delivered over the coming year.

Turnover from its core construction business was down 19% to £199m but income at its business in India was up a third to £66m. Severfield added: “India’s construction sector continues to grow strongly, with rising demand for steel driven by sustained public and private investment in manufacturing, energy, and transport infrastructure. This momentum is reflected in a record order book at 1 November of £286m.”

The firm is developing a new production facility in Gujarat to cope with increased demand which it said it expected to open in the current year.

Severfield said it was not paying a dividend because it wanted to conserve cash, adding it had cut net debt by around half to £21.7m from its previous year-end at the end of March.