How Thirsk steelwork contractor Severfield has seen revenue rise despite ongoing challenges in the market

The Thirsk-based group saw revenue increase 11 per cent to £403.6m, up from £363.3m the previous year. Underlying pre-tax profit was up 11 per cent from £24.3m to £27.1m.

Alan Dunsmore, CEO of Severfield, said: “We are delighted to be reporting a resilient and strong performance despite the ongoing market challenges.

“The group's growth strategy is delivering a record order book with a broad diversity of sectors, geographies and clients, providing us with good earnings visibility through 2023 and beyond.

“Although inflation and supply chain pressures remain, we are managing these well and the earnings visibility gives us confidence in maintaining our positive performance expectations for 2023.”

The firm had a record UK and Europe order book of £486m at June 1, 2022, up from £393 on November 1, 2021, including new industrial and distribution, film studio, commercial office and bridge orders and the new stadium for Everton Football Club.

Its Indian joint venture JSSL returned a profit of £800,000 following a loss last year of £700,000 as a result of Covid-19 disruption in 2021.

Severfield said that its India order book of £158m at June 1, 2022, reflects strong underlying demand for structural steel in the country. It added that JSSL is “very well-positioned to take advantage of an improving economy”.

The tendering and pipeline activity in UK and Europe remains encouraging, the group added, including opportunities in the industrial and distribution, transport infrastructure, nuclear, data centre and commercial office sectors.

The record order book provides good earnings visibility through 2023 and beyond, Severfield said.

Expectations for 2023 are unchanged despite the challenging macroeconomic backdrop.

Mr Dunsmore said: “The group's strategy is driven by its core strengths of engineering and construction.

“This well-established strategy is unchanged, focused on growth, both organic and through selective acquisitions, operational improvements and building further value in JSSL.

“In recent years, the evolution of this strategy has been particularly evident in our significant market sector, geographical and client diversification, which has enabled us to successfully navigate periods of market softness in certain of our main sectors in the UK, notably commercial offices.

“This has resulted in a more balanced business, the group now serves ten market sectors, and a resilience which has seen us successfully negotiate the headwinds of Brexit, the Covid-19 pandemic and the inflationary pressures in the current year.

“The successful implementation of our strategy has also facilitated revenue growth and reinforced the group's strong balance sheet and ability to generate cash which have allowed us to continue to invest in our operations and in acquisitions such as Harry Peers and DAM Structures.

“As a result, our capabilities are aligned with many market sectors with strong growth potential.

“The group is well positioned to meet the demand for ongoing investment in the UK's infrastructure, while our diverse construction activities remain focused on key areas such as industrial and distribution, data centres, stadia and leisure, nuclear and commercial offices.”