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Profits halved at Severfield-Rowen

23 Aug 11 Structural steelwork contractor Severfield-Rowen saw both underlying operating profit and pre-tax profit fall by more than 50% in the first half of the year, despite a reasonably strong order book and only marginal decline in revenue.

The Shard
The Shard

The company, supplying steelwork to Europe’s tallest building, London’s Shard of Glass, reported revenue down 3.6% to £122.0m for the six months to 30 June 2011 (2010: £126.7m).

Underlying group operating profit fell 53% to £4.0m (2010: £8.5m) and pre-tax profit by 58% to £3.4m (2010: £8.2m). Underlying net margin shrank from 6.5% to 2.8%.

CEO Tom Haughey said that the results were in line with expectations, “given the backdrop of a prolonged and unprecedented period of weak demand”.

Order book has grown to £249m (May 2011: £221m).

Mr Haughey said that while exports from the UK“will remain a small proportion of turnover in light of the prevailing returns in many overseas markets”, opportunities in India are the main focus for the company’s growth ambitions.

Severfield-Rowen set up JSW Severfield Structures in India last year in partnership with JSW Steel.  Since the opening of the fabrication facility 12 months ago, JSW Severfield Structures has built up an order book of £41m, which sees it working to capacity to June 2012.

“The prospects for JSSL in the Indian market are immense and both partners are seeking to further develop the business capability in line with their growth expectations,” Mr Haughey said.

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