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Severfield snubs virus to shows 40% growth

24 Nov 20 Structural steelwork specialist Severfield saw its revenue rise 40% in the six months to 30th September and underlying profits were also up.

Severfield hanging steel at Lord's Cricket Ground
Severfield hanging steel at Lord's Cricket Ground

Despite starting its financial year in April, just after the UK went into lockdown, Severfield emerged unscathed. Its half-year revenue was up 40% to £186.0m (2019 H1: £131.7m).

Even with Covid-19 impacting the economy, operating profit (before JVs and associates) was up 16% to £8.1m (2019 H1: £7.0m).

Underlying profit before tax was up 3% to £8.4m (2019 H1: £8.2m). Actual pre-tax profit, however, was down nearly 20% to £6.6m (2019 H1: £8.2m)

UK and Europe order book of £287m at 1st November 2020 (1st June 2020: £271m), includes new nuclear orders secured by Harry Peers, acquired in October 2019 for £25m

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Chief executive Alan Dunsmore said: “The resilience provided by our market sector, geographical and client diversity, together with the actions that we have taken to date have enabled us to navigate well through the challenging conditions of Covid-19. This has resulted in a strong operational performance in the first half of the year.

“We have a strong balance sheet, good visibility of future earnings from our order books and pipelines, and a strong reputation for delivery of complex projects for our long-standing clients.

“There is now greater clarity of the extent of the impact of Covid-19 on the current year’s performance and, on the assumption of no further significant business interruptions arising from any widespread and prolonged secondary lockdown, we expect to improve upon our first half profitability in the second half of the financial year.”

Severfield’s joint venture in India, JSSL, was more affected by the Covid-19 pandemic than its UK operations, seeing its revenue slump to £23.1m, compared to £56.3m in the previous period, and a break-even operating margin, compared with 8.5% in the previous period. As a result, Severfield’s share from it was an after-tax share of loss of £700,000.

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