Booming Workloads Boost Severfield Profits | New

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Turnover at the steel construction company which helped build Everton’s new stadium, new studios for broadcaster Sky in Hertfordshire and new viaducts for HS2 in the West Midlands has topped £200m sterling in the first six months of the year.

Severfield said revenue rose 20% to £235m in the half to September 24 after a record 12 months last year when revenue topped £400m for the first time .

The country’s largest steel contractor said pre-tax profit rose 29 per cent to £10.2 million, which he said ‘highlights our ability to offset continued inflationary increases in costs through to a combination of operational efficiency, higher selling prices and contractual protection, as steel remains largely a pass-through cost for the group”.

He said his earnings during the period included around £23m of steel price increases and he said rising steel prices, “supply constraints on certain materials and rising energy and labor costs continued to put upward pressure on total construction costs” in the first half which he added would continue for the remainder of its financial year.

It said its backlog as of November 1 stood at £464m, up from £486m at the start of June, with £367m expected over the next 12 months.

The company, whose current projects include work on Lendlease’s new headquarters building in King’s Cross as well as Bam’s Co-op Live Arena in Manchester and Multiplex’s Argyle Street office project in Glasgow, said the Net debt in the half was £15.8m, down from the £18.4m it posted at the end of its last financial year.

The firm’s joint venture in India, JSSL, which has been in operation since 2008, recorded an after-tax profit, with Severfield’s share of that figure doubling to £600,000. The company’s revenue rose 70% to £70m.

Analysts expect annual revenue of around £490m with pre-tax profit of just over £31m.

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