Severfield, Britain’s biggest steel work contractor, reported a huge leap in half year profits and said full year results will be “comfortably ahead” of expectations.
The Thirsk-based group recently won a number of high profile contracts including London’s newest city skyscraper.
Severfield has been appointed the steel-work contractor on 22 Bishopsgate in the City of London. Analysts said the prestigious contract will be worth up to £50m as Severfield helps to build one of the top three tallest buildings in the City of London.
The contract was awarded based on Severfield’s reputation as the steel company behind Wimbledon’s No. 1 Court, London’s tallest building The Shard and Tottenham Hotspur FC’s new football ground.
Severfield said underlying pre-tax profit rose 69 per cent to £8.1m in the six months to September 30.
The group said it is on track to meet its goal of doubling underlying pre-tax profits over the next four years.
The group’s CEO Ian Lawson said: “The business is performing well. Four years ago we went through a lot of turmoil. We’ve been putting in better processes across the business and we are starting to see the fruition of this coming through.”
The UK order book jumped from £270m to £315m - a six year high - and over 90 projects were undertaken over the half year in a number of key sectors such as commercial office developments, industrial and distribution facilities, stadia and transport.
“We are meeting deadlines, we are quality and our health and safety is good,” said Mr Lawson.
“There is a lot of opportunity. When we bid on projects we bid at a level that’s acceptable to us.”
He said that the group has seen no impact from Britain’s vote to leave the EU.
“We have not been affected by Brexit with any cancelled orders. Other schemes we weren’t involved in have been affected,” he said.
“Things could change when Article 50 is triggered, but take 22 Bishopsgate - the develop is going ahead with a 62 storey tower on a speculative basis.
“The contract for 22 Bishopsgate has been won based on our ability to get the job done on time, safely and at the right quality. We have a strong enough balance sheet that backs all this up. It’s good news for Yorkshire.”
Severfield has been appointed as the steelwork contractor to support Multiplex in the construction of 22 Bishopsgate, which has an internal area of 1.4 million sq ft. The firm will provide superstructure structural steelwork and metal decking.
22 Bishopsgate was acquired in 2015 by AXA Investment Managers - Real Assets, acting on behalf of a consortium of international investors, to develop a new building together with its development partner Lipton Rogers Developments.
Designed by PLP Architecture, Severfield said 22 Bishopsgate will be “an exceptional office tower with art and amenities, shaped to respect views of the City”.
It will be more than an office building, offering restaurants, bars and shops to meet the new demand for multi-functional buildings in the capital.
Severfield said revenue rose slightly from £117m to £118m, but this was against strong comparatives last year when revenue rose 20 per cent.
The group is raising its interim dividend by 40 per cent to 0.7p a share.
“This shows our confidence,” said Mr Lawson.
The group said it was delighted with the strong performance in the first half, which has continued since the period end on September 30.
It said that margins have risen significantly and its Indian joint venture is performing steadily with a consistent order book and good levels of production.