Profits more than double as order book stands at six year high of £315m
The steelwork contractor set to begin work on Tottenham Hotspur’s new ground early next year turned in a bumper set of interim results with half year pre-tax profit more than doubled and the firm boasting its highest order book for more than six years.
Severfield saw pre-tax profit climb to £7.4m in the six months to the end of September, up from £3.2m for the same period last year. Revenue was marginally up, by £1m to £118.2m.
Chief executive Ian Lawson (pictured), who was brought in to turn around the loss-making business by chairman John Dodds in November 2013 after leaving Kier earlier that year, said he expected profit for the full year to be ahead of expectations.
Cenkos analyst Kevin Cammack said: “These are cracking interims featuring stand-out margin growth from 4.3% to 7%.” He added that he expected full year profits to be around £18m, up from his previous estimate of £16.5m.
Lawson added: “We have a strong platform from which to implement our strategy, which targets to double our underlying profit before tax over the next four years and continue to create value for our shareholders.” The firm increased its dividend by 40% to 0.7 pence.
Severfield said it had been working on 90 projects during the period including the retractable roof being built at Wimbledon’s Number One court as well as schemes for BAE Systems at Barrow-in-Furness, Cumbria, and the Ordsall Chord rail bridges in Manchester.
The firm has completed its work replacing the steel bolts on Rogers Stirk Harbour & Partners’ Cheesegrater and has won the steel contract for another tower in the City of London – the 22 Bishopsgate development being built by Multiplex and set to be the tallest in the Square Mile. Its order book at the beginning of November was £315m.
Lawson flagged up recent government decisions on major infrastructure projects and said schemes such as HS2, Hinckley Point Nuclear Power Station and the new runway at Heathrow all had significant steel content.
The firm added: “This reflects a good level of activity in the UK market which the group’s breadth of capability and continuing service levels to clients is enabling it to benefit well from
Severfield’s India business turned in an operating margin of 7.6% – similar to last year’s 7.4% – and said its order book was steady at £35m.