Ongoing bridge repairs and cost of closing modular business help double Severfield losses to £40m

Losses at Severfield more than doubled last year to £40m as the country’s biggest steelwork contractor said it spent another £13m fixing a dozen bridges and more than £12m closing its modular business.

The bridge work relates to repairing welding defects on several bridges including structures on HS2.

It said it spent £13.2 out the problems, which it said it expected to “substantially complete” this year, on top of the £43m it shelled out last year although it received another £7.5m of insurance payments on top of the £20m it recovered last year.

Closing its £16m modular business also cost it £12.6m which the firm said included a £4.1m onerous contract provision.

These costs, part of an overall £50m provision which also included £22m of impairment charges, meant pre-tax losses at Severfield increased from £17.5m to £39.9m in the year to 28 March on turnover up 1% to £454m.

New chief executive Paul McNerney, who arrived last autumn and immediately began a review of the business, said: “FY26 was a challenging year for Severfield, with profitability impacted by competitive pricing, delays to project awards, and lower activity in parts of our core markets.”

Severfield said the review would lead to “tighter operational discipline, enhanced governance and a more rigorous approach to execution [that] will improve consistency of delivery and support margin”.

It added other initiatives would include a new organisation structure while geographies and industry sectors will be prioritised “where engineering expertise and delivery capability provide a clear competitive advantage”.

It said it expected medium-term revenue to be between £500m and £550m with an operating margin of 7% to 8%.

But McNerney warned that “FY27 is expected to be a transition year, with first half profitability continuing to reflect lower‑margin work secured in a tighter pricing environment, whilst several larger and higher-value projects are expected to commence later in FY27”.

It said its order book at the start of its new financial year was £507m, up from £429m at the start of November, with the firm saying the £339m was scheduled for delivery over the coming 12 months.

Its India joint venture business, JSSL, had a record order book of £344m with Severfield saying it will “form an increasingly important contributor to Group growth and profitability over the medium-term”.

Severfield said its net debt dropped 15% to £28m over the year.