Steelwork contractor expecting bumper 2023 as pre-tax profit stays flat
Turnover at the steelwork firm helping build Everton’s new stadium, new studios for broadcaster Sky in Hertfordshire and new viaducts for HS2 in the West Midlands topped £400m for the first time last year.
Severfield said revenue was up 11% to £403m in the year to 26 March beating the previous record of £394m that it posted back in 2008.
But the country’s biggest steelwork contractor said pre-tax profit slipped £100,000 to £21m although it said underlying operating profit was up 11.5% to £27m.
It added that it was hit by non-underlying items of £6.1m which included £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 – 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 £486m at the beginning of June of which £397m had been planned to start in the coming 12 months.
The firm, whose ongoing 100-plus projects include work on Lendlease’s new Google headquarters building at King’s Cross as well as Bam’s Co-op Live Arena in Manchester and Multiplex’s 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: “We 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.”
But it said it had a year-end net debt of £18.4m, from net funds of £4.4m last time, which it said “reflects higher steel purchases to meet production needs in 2023 and the impact of steel price rises”.
The firm’s joint venture in India, JSSL, which has been up and running since 2008, posted an after tax profit with Severfield’s share of the figure standing at £800,000. Revenue at the business doubled from £48m to £100m while its order book in India was up £18m to a record £158m.
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