New boss Paul McNerney began a review of the firm after joining last November
Severfield is shutting its modular business as part of a promised review into the operations of the country’s biggest steelwork contractor by its new chief executive.
Paul McNerney arrived at the firm from Laing O’Rourke last November and immediately outlined a review of the company which has recently been hit by a series of losses.
In an update this afternoon, Severfield said it was closing the Modular Solutions arm which in its last financial year had a turnover of £24.2m and made an underlying pre-tax profit of £400,000.
In a statement, Severfield said: “As part of this review, the Board has concluded that the Modular Solutions business represents a sub-scale, non-core activity of the Group, and following consideration of the strategic options available, has taken the decision to discontinue the business.”
It said it expected some job losses to be made but declined to say how many people would be affected. It added: “The Group is working constructively with all stakeholders affected by this decision and will seek to limit the impact on employees within that business, including through appropriate consultation, redeployment and support processes.”
McNerney said: “When I joined Severfield, I was clear that my priorities were to redefine our strategy, strengthen our manufacturing and delivery capabilities, drive greater efficiency, and reinforce our focus on engineering excellence for our customers. The decision announced today follows careful consideration and is intended to support the long-term strength and sustainability of the Group.
“This marks an important early step in reshaping our strategy and we will provide a broader update on the growth strategy for our core businesses during 2026.”
Severfield, which has been carrying out steel work on British Land’s 2 Finsbury Avenue in the City of London being built by Sir Robert McAlpine, said its focus remained on its core structural steelwork activities where its order book at the start of this month stood at £479m.
It added that its Construction Metal Forming business was not affected by today’s announcement and will continue to operate as a separate joint venture of the company.
In its most recent set of results, for the six months to 27 September last year, Severfield saw revenue fall 18% to £206m with pre-tax losses growing from £5.8m to £7.6m – a rise of 31%. Underlying profit for the period nosedived from £16m to just £600,000, a fall of 96%.
Severfield has recently been hobbled by the bill for carrying out repairs on several bridges, the majority of which are on the HS2 railway.
Last July, the firm said it estimated the cost of sorting out the problems, which centre on welding defects, would be £43.4m although insurance recoveries of £20m will bring the hit down to £23.4m.
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