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Severfield promises a better second half

26 Nov 19 Structural steelwork group Severfield has posted interim results showing a collapse in profits for the first half of its financial year but it has assured shareholders that the second half will be better.

Severfield chief executive Alan Dunsmore
Severfield chief executive Alan Dunsmore

For the six months ended 30th September 2019, Severfield generated revenue of £131.7m, down nearly 12% on the same period last year, and operating profit down 44% to £7m (2018: £12.5m).

Despite this, chief executive Alan Dunsmore said that trading was in line with expectations and the profits dip was only down to the current phasing of work.

“The results for the 2020 financial year are expected to be considerably more second-half weighted, with a number of large ongoing contracts expected to deliver stronger profits in the second half of the financial year,” he said.

“Despite the continued soft market backdrop in the UK, our overall pipeline of potential future orders has remained stable with a good balance of work across all key market sectors. Both the quality of the order book and the strength of the pipeline are consistent with our continued progress towards our strategic targets.”

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The UK and Europe order book stands at £323m, up from £295m six months ago, while the Indian joint venture, JSSL, has an order book steady at £134m.

Severfield is also watching unfolding events at British Steel with keen interest, Alan Dunsmore said.

“We continue to closely monitor events at British Steel, following its sale to Jingye Group, China's third largest privately-owned steel producer, which has been agreed, subject to certain conditions, including regulatory approval,” he said. “Encouragingly, Jingye has announced its intention to invest over £1bn in British Steel over the next decade and we envisage that a successful sale will assist in providing stability to the steel supply market in the UK. Notwithstanding this, we continue to keep our steel supply options under review and already have strong ongoing relationships with other steel supply chain partners, including those in continental Europe and local stockholders in the UK.”

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