Severfield undertakes more than 100 projects despite the pandemic

Severfield, Britain’s biggest construction steelwork contractor, has reported a resilient performance as it undertook over 100 projects during the pandemic.

Severfield worked on the Lord’s Cricket Ground redevelopment of the Compton and Edrich stands
Severfield worked on the Lord’s Cricket Ground redevelopment of the Compton and Edrich stands

The Thirsk-based group said its performance was driven by the cash generative nature of its business and a good, diverse geographic, sector and client base.

The firm, which has not made any claims for Covid-related Government schemes, said it undertook over 100 projects in the year to March 31.

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These include the Lord’s Cricket Ground redevelopment of the Compton and Edrich stands and Fulham FC in London.

Major projects, worth over £20m, include Google King’s Cross in London, a large industrial facility in Ireland, large data centres in Ireland and Finland, and large distribution centres in Littlebrook and Swindon.

Revenue rose 11 per cent to £363m in the year to March 31, which was a 10 year high for the group.

Underlying pre-tax profits fell slightly from £29m to £24m and the group said this demonstrated its resilience against the Covid-19 backdrop.

Alan Dunsmore, Severfield's chief executive, said: “The group’s strategy to build a balanced business, with geographic, sector and client diversity, has facilitated not only revenue growth of around 30 per cent over the last three years, but has also provided us with resilience during the pandemic.

"Our strong balance sheet and ability to generate cash has enabled us to continue to invest in our operations and in strategic acquisitions, such as DAM Structures.

"We have an established platform for further operational and strategic progress in the year ahead and with the current order book levels and pipeline activity, have the capacity to deliver enhanced shareholder returns in the future.”

Severfield will pay out a total dividend of 2.9p per share, which includes a proposed final dividend of 1.8p per share. Both match last year's dividend levels.

Severfield has set out a new group sustainability strategy with a target to be operationally carbon neutral in the 2021 calendar year. It signed up to the SteelZero initiative in April.

It said that the construction industry will be central to a sustainable recovery from the effects of Covid-19 and a new, low carbon infrastructure (including HS2, wind power, new nuclear, rail electrification, energy efficient buildings) will play a leading role in stimulating growth, which will provide future growth for the firm.

The Government’s five-year plan, the National Infrastructure Strategy (NIS), plans to transform infrastructure to drive economic recovery, levelling up and meeting the UK's net zero emissions target by 2050.

Severfield said this plan will provide increased funding of £640bn for UK infrastructure projects including future work for HS2 and investment programmes for Highways England.

At Network Rail, in addition to HS2, the total CP6 budget of £53bn includes a significant amount of rail electrification work and is substantially higher than the previous CP5 budget of £38bn.

At Highways England, the second Road Investment Strategy (RIS2) has been increased by a further £2bn.

Looking to the future, Severfield said its high quality UK and Europe order book supports continued growth throughout the 2022 financial year and beyond and the firm is positioned at the heart of the growth in the UK and Indian infrastructure markets.