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Severfield appoints ex-Kier boss after profit dives by two-thirds

25 Aug 10 Steel contractor Severfield Rowen has reported sharp falls in profit and revenue for the six months ending 30 June 2010.

Steel contractor Severfield Rowen has reported sharp falls in profit and revenue for the six months ending 30 June 2010.

Revenue was down 37% at £126.7m (H1 2009: £200m), while pre-tax profit plunged 67% to £8.2m (H1 2009: £24.6m), though the firm insisted this was "anticipated".

Net debt was reduced to £8.2m (H1 2009: £12.0m).

Its order book stands at £244m, a slight fall from the £256m reported a year ago.

Severfield said it has almost doubled its share of the UK constructional steelwork market. New orders in 2010 include Terminal 2 Heathrow, Amex House Brighton, National Indoor Sports Arena, Velodrome Glasgow, and Park House London.

The firm has appointed John Dodds, formerly chief executive of Kier, as a non-executive director from 1 October 2010.

Tom Haughey, chief executive officer, described the UK market as “difficult” but said Severfield was “outperforming its competition in terms of operational performance, cost and cash management and contract awards”.

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He added: “The pronounced falls in revenue and margins are as anticipated by the company and reflect the significant fall in UK demand for structural steelwork.

“The UK economy is recovering more slowly than forecast and some sectors in construction face a prolonged challenge. The key market sectors of power, energy and waste, London commercial offices and infrastructure, present good opportunities in 2011 and beyond.

“The company is continuously reviewing its UK operational cost base in light of key supply/demand balances and forecasts.”

Haughey expects the UK structural steelwork sector to see “substantial rationalisation” in the next 12 months.

In India, the firm's joint venture, JSW Severfield Structures, has commenced production and the business is already winning orders. It formally opens on 17 November 2010.

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