Severfield’s UK order book improves

The Thirsk-based group said yesterday that it is in discussions to see who should be made to pick up the final bill for the replacement works which came about after three bolts failed at the building, which opened last July.

The structural steel firm completed its contract at the building, which is known as the Cheesegrater, in 2013.

But between last November and January, developer British Land said three steel bolts had fractured and fallen from the building.

Contractor Laing O’Rourke and structural engineer Arup carried out an investigation, and found a material failure in some bolts. This led to a replacement programme as a precautionary measure.

Severfield group is carrying out the replacement programme in conjunction with British Land, Laing O’Rourke and Arup, and it is likely to take until the end of the year.

Severfield released an update on Leadenhall and its current trading yesterday saying: “The group has incurred almost £1m of costs to date relating to a programme of bolt replacement works at the Leadenhall Building, a contract that was completed by the group in 2013.

“Whilst these works progress, all parties continue discussions to agree where the liability for the costs of the programme should rest.”

It said the group’s costs are being regarded as exceptional and will not impact on its underlying operating profit for the current year.

It added: “The group’s overall trading performance continues to be in line with management expectations.

“Its financial position remains satisfactory and net funds are expected to remain positive at the year end.

“The group’s current year focus has been on both operational and margin improvements, rather than revenue, and continues to deliver in line with expectations.

“The UK order book of £194m has strengthened further in recent months and provides a solid platform for a return to revenue growth in the next financial year.”

In November, Severfield announced it had returned to the black. It said at the time that it was encouraged by a much improved performance in its work in India.

And yesterday it said there are still positive signs, although there is “more caution” in the economic outlook in India.

It said: “The Indian business has continued to perform well in the second half of the year and volume throughput in the factory, coupled with better operational performance, is enabling it to operate around break even level.”