Profit soars at steelwork contractor

Steelwork contractor Severfield has returned to strong profit because of a more than healthy order book.

Pre-tax profits nearly doubled in the year to March rising from £9.6M to £18M on the back of surging orders and the first full-year contribution from the acquired Composite Metal Flooring business.

Acting Chief Executive Officer Alan Dunsmore, said that Severfield had completed remedial bolt replacement works at 122 Leadenhall Street [Cheesegrater] in London during the year with costs in line with earlier provisions.

He said: “Discussions continue with all stakeholders to determine where the financial liability for the remedial costs should rest.”

Revenue rose 10% to £262M reflecting an increase in order flow and activity during the year, together with an increase in steel prices.

Severfield is working on four major projects in London that have contributed to this increased activity level.

These contracts worth more than £20M each are for a new roof for Wimbledon No. 1 Court, Goldman Sach’s head office, the Tottenham Hotspur stadium and the 22 Bishopsgate tower, set to be the tallest building in the City of London.

Operating margins recovered to 7.5% from 5.7% in 2016. The UK order book fell to £229M from £315M last year, reflecting a return to more ‘normal’ order book levels.

Mr Dunsmore said: “We continue to drive improvements to our operational execution, which includes better risk and contract management and developments to our production processes.

“These excellent results will keep us on track towards our target of doubling our 2016 underlying pre-tax profit by 2020.

“Our strategy is well-flagged and it continues to deliver operationally and financially.

“The current order book and pipeline, coupled with a continued stable market environment, will support further progress in the current financial year towards our 2020 target.”