Setback in India but Severfield still sees opportunities for growth

The Thirsk-based company said the year had seen “stabilisation” and recovery in the UK business, but disappointment in India.

However, the company stressed that the Indian market still offers the prospect of significant growth.

The company said: “Underlying profit before tax of £4m represented a significant turnaround from the underlying loss of £21.5m in the 15 months to March 31, 2013.

“This reflected both a good recovery in UK operating margins but also a share of losses from our Indian joint venture of £3m.”

Ian Lawson, the company’s chief executive, said yesterday: “During the financial year Severfield has achieved substantial operational improvements across the group and delivered a significant turnaround in underlying profit before tax.

“Pleasingly, the group’s ongoing stabilisation and recovery generated increasing UK operating margins supported by a strong balance sheet and solid order book. While our Indian joint venture performed below expectations, actions are being taken to put the business in a sustainable position and we believe the market in India continues to present significant future growth opportunities. The development of a clear group strategy in addition to the anticipated recovery in the core UK market means Severfield is well placed for future growth.”

In a statement, the company said UK turnover of £231.3m compared with £318.3m in the prior 15-month period, reflecting a modest reduction in capacity at its largest business.

The company said that a further restructuring of its largest business, Severfield-Watson Structures, had been concluded successfully.

The UK order book was “steady” at £168m on May 1, while the operational improvement programme was progressing well and continuing.

Severfield employs 1,200 employees altogether, and Mr Lawson said he was anticipating a small increase in staff numbers over this financial year.