The North Yorkshire-based group yesterday revealed it is in advanced stages of setting up a joint venture in India, modelled on its UK business, that will tap into the country's booming construction sector.

Severfield, which is working on a number of high-profile projects including the closing roof at Wimbledon's Centre Court, reported underlying pre-tax profit of £25.3m for the first six months of the year, up 59 per cent on last year.

Its bulging £431m order book as of June 30 was up by about 50 per cent on the same time last year.

Chief executive Tom Haughey said: "We've given value for several years to clients and that's now being recognised. It's all very positive and it's all coming to fruition."

Severfield staff are in India to establish contacts and pave the way for a "very substantial" expansion.

Mr Haughey said: "We are well on with the exploration of establishing operations in India. We have identified India as a place with a very strong growth potential."

Mr Haughey was unable to discuss specifics of the venture, which would be distinct from its UK operations, but said he expected to make an announcement later this year. It will be with an established Indian company and serve the Indian market, working on everything from oil and gas projects to stadiums using Severfield's "tried and tested formula".

During first half Severfield said it worked on high-profile developments including Dublin Airport, Heathrow Airport and Glasgow Museum. Work on the London 2012 Olympic Stadium is due to start soon, and Mr Haughey said this demonstrated its position as the UK's preferred structural steel supplier.

Work on the closing roof at Wimbledon is on schedule for completion in time for the 2009 Wimbledon Championships.

However, despite the strong order book, Severfield said the economic climate in the UK may hit its margins and is taking steps to allow for the market deteriorating.

"There's still some very good, strong prospects out there in the UK and Ireland." sid Mr Haughey.

"We have been researching export markets further afield and there are still enormous opportunities in the Middle East.

"If the UK position weakens then we have that as an option, to return to doing a proportion of our activity through export markets," said Mr Haughey.

Currently about one per cent of turnover comes from exports, but Severfield has staff in the Middle East researching expanding this share. Mr Haughey said this could grow to 10 to 15 per cent of turnover if required. The expansion may dent margins in the longer term.

Revenue from the first six months rose 26 per cent to £173.3m, and Severfield said it was increasing its interim dividend by 48 per cent to 10p per share as a reflection of its financial strength. However, net debt stood at £35.9m, compared to net cash of £28.8m at the same time last year.

Severfield is now seeing significant gains in terms of repeat business, and Mr Haughey said this means the group is often the preferred contractor when it comes to big projects with tight timetables.

It is doing substantial work on retail, and seeing strong growth in power and energy. Education and health are still strong sectors, but speculative distribution centres are not being built, he said.

Severfield has seen steel prices increase by 25 per cent in the past year, but is successfully passing this on to customers.


High-profile range of work


Severfield-Rowen has worked on numerous high-profile projects including Arsenal's Emirates Stadium.

It is currently providing structural steel for a closing roof for WImbledon's Centre Court, which it says is on schedule to be complete for next year's Championships.

The folding fabric concertina roof is designed to open in less than 10 minutes and is designed to allow natural light to reach the grass.

Severfield says it is adept at turning its hand to different projects and is soon to start work on the London 2012 Olympic Stadium, as its only structural steel contractor.

During the six months, Severfield worked on Stratford City Retail Development, a retail, hotel and office development near the London Olympic stadium.

Other work included a Tesco distribution centre in Teesport.