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Sun November 28 2021

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Severfield stays solid as orders keep coming

5 days Structural steelwork contractor has posted half-year results showing growth in revenue and profits – and a more diverse order book than usual.

Severfield built the new Riverside stand and Fulham Football Club's Craven Cottage stadium in London
Severfield built the new Riverside stand and Fulham Football Club's Craven Cottage stadium in London

In the six months to 30 September 2021, Severfield plc generated revenue up 5% to £195.9m (2020 H1: £186.0m). From this it made a pre-tax profit of £7.9m, up 20% from last year (2020 H1: £6.6m).

The £9m revenue growth predominately reflects six months of additional revenue for Dam Structures, which was acquired in February 2021.

The UK and Europe order book has reached a record high, standing at £393m on 1st November 2021. This is up from £301m at the beginning of June and £376m in September.

Of the £393m UK and Europe order book, 95% is in the UK and £318m is planned for delivery over the next 12 months.

Orders includes Water Orton Viaducts in the Midlands for HS2, the new stadium for Everton FC, a waste-to-energy facility, several big sheds and further road and rail bridge orders.

It is a more diverse mix than Severfield’s traditional work profile, with much less commercial building work.

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“The order book remains well-balanced, showcasing the benefits of our strategic diversification over recent years, and contains a healthy mix of projects across the group's key market sectors,” said chief executive Alan Dunsmore.

“Furthermore, whilst the order book is currently at record levels, only 17% of this represents commercial offices, compared to the more normal previous range of 30 to 35% and a peak of c.60% around four years ago, highlighting the success of our strategic diversification,” he added.

On the business outlook, he said: “Tendering activity in UK and Europe remains very encouraging and our pipeline of opportunities spans a wide range of sectors demonstrating the benefits of both the strategic acquisitions and the organic investments we have made in recent years.

“We are making strong progress in our Indian business and are well-placed to capitalise on this exciting market opportunity as the economy recovers from the pandemic and construction continues to transition from concrete to steel.

“While the inflationary outlook and labour market and supply chain pressures present challenges, our strong order book position and operational experience give us confidence for the rest of this year and provide good visibility through FY23.”

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