How structural steel firm Severfield beat its profit target for 2020

Severfield has worked on the installation of the retractable roof for Wimbledon No.1 Court.

The Thirsk-based firm reported a 16 per cent rise in underlying pre-tax profit to £28.6m for the year ended March 31, 2020, ahead of its strategic 2020 profit target of £26m.

Severfield, which has in the past worked on the new stadium for Tottenham Hotspur FC and the retractable roof for Wimbledon No.1 Court, saw revenues rise 19 per cent to £327.4m, up from £274.9m the previous year.

Alan Dunsmore, CEO of Severfield, said: "The strong set of results that we are reporting today reflects the further operational and strategic progress that we have made in 2020.

"Our balance sheet and cash position remain strong, we have continued to drive our 'Smarter, Safer, more Sustainable' initiatives with an increased focus on manufacturing efficiency, and we have entered new UK markets through the acquisition of Harry Peers."

Severfield acquired structural steelwork firm Harry Peers for a net initial cash consideration of £18.9m.

Despite its factories remaining operational and all of its UK and European construction sites being open, Severfield has deferred dividend payment decisions until there is "greater visibility" over the impact of Covid-19.

The firm said tendering and pipeline activity remains encouraging but some investment decisions were being delayed by clients.

Severfield added that it has a strong balance sheet and cash position, sufficient committed funding in place until 2023 and a cash generative business model, with additional resilience provided by its market sector, geographical and client diversity.

Mr Dunsmore said: "Despite the ongoing uncertainty of Covid-19, we remain well placed to win work in the diverse range of market sectors and geographies in which we operate.

"This allows us to target a good pipeline of opportunities and provides us with the extra resilience and ability to increase our market share.

"With our teams on site and operational, we are in a good position to service our clients and manage the potentially challenging market ahead."