Severfield boosts profit despite turnover drop

Severfield has reported an increase in profit, despite its revenue contracting.

The Yorkshire-based firm, which manufactures, fabricates and erects steel for projects across the UK and beyond, posted a pre-tax profit of £11m for the six months to 23 September this year. This was up 8 per cent on the equivalent period in 2022, despite revenue falling by 8 per cent over the same period, to £215.3m.

Severfield told investors that it had “performed well” over the latest half-year period, which was marked by “challenging market conditions”.

The firm said the economic climate had caused “ongoing delays” in contract awards, as well as “some lower tendering activity and competitive pricing”. But its UK and Europe order book stood at £482m on 1 November, of which two-thirds was for delivery over the following 12 months and almost nine-tenths was UK-based.

“Many of our chosen markets continue to have a favourable outlook with excellent longer-term growth opportunities,” said the trading update.

“The group has a prominent position in market sectors with strong growth potential, and is well-positioned to win projects in support of a low-carbon economy and to improve energy security.”

Target schemes included battery plants, energy-efficient buildings, manufacturing facilities for renewable energy, and work in the transport, nuclear, oil, gas and energy sectors, according to the update.

Severfield bought Dutch fabricator Voortman Steel Construction during the latest period, and said the move offered “greater access to growing European market sectors”.

The acquired firm has contributed revenue of £28m and underlying profit before tax of £1.5m in its first six months, the update revealed.

Severfield chief executive Alan Dunsmore said: “In the period we have delivered further profit growth, successfully integrated Voortman, reported strong cash generation and have continued to strengthen our balance sheet.

“We have secured a significant amount of high-quality new work across a variety of sectors in the UK, EU and India.”

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