Severfield cheers investors with dividend increase

The Thirsk-based firm, which has participated in over 100 projects over the past year including Tottenham Hotspur FC’s new stadium, the installation of the retractable roof for Wimbledon No.1 Court and a new commercial tower at 22 Bishopsgate​, said it has ​a high quality and stable UK order book of £237m.

The firm cheered shareholders with the news of a 13 per cent increase in the core dividend and a special dividend of 1.7p per share as it announced strong annual results.

Revenue rose 5 per cent to £274m in the year to March 31, while underlying pre-tax profits jumped 19 per cent to £23.5m.

Severfield's chief executive ​Alan Dunsmore said: "Despite all the uncertainties around Brexit, the UK economy continues to grow moderately."

He said the firm has seen little impact from Brexit although it has been a problem for some of its clients because of a lack of Eastern European labour on construction sites.

​"Despite the uncertainties of Brexit, we continue to see a stable UK market, with modest economic growth forecast, and a pipeline of potential future orders that remains good," he said.

"This pipeline includes a number of significant projects in the coming months across the commercial offices (both in London and outside), retail, industrial and distribution, data centres and infrastructure sectors."

The group has raised its total dividend by 13 per cent to 2.6p a share and announced a p​roposed special dividend of 1.7p per share to deliver a total cash return to shareholders of 4.3p per share.

"It's been a good year of progress," said Mr Dunsmore.

"Cash flow is consistently strong and we remain on track to achieve our profit targets."

He said Severfield has built up a good track record over many years and the firm is doing well because "we keep delivering for clients and support them as best as we can".

Most of the work on the retractable roof for Wimbledon No.1 Court has been completed and Severfield will be back on site in August after this year's tournament so the roof will be ready for next year.

Mr Dunsmore described the Spurs work as "extraordinary".

"It's a great success. Spurs played the last game at the end of the 2016/17 season and started demolishing the stadium the following week," he said.

"The new stadium is now in place. Most people thought it would be a two year build, but it was done in a one year programme."

The reorganisation of the group's factory operations in North Yorkshire is now completed and Mr Dunsmore said the work went smoothly.

Steel fabrication at Dalton and Sherburn has now been consolidated into the Dalton facility, making better use of the group's operational footprint in Yorkshire.

Severfield has also established a new business venture in Sherburn called Severfield (Products & Processing) which will be known as SPP.

"SPP, which commenced trading in April 2018, has allowed us to address smaller scale projects, a segment of the market which we have not historically focused on," said Mr Dunsmore.

"The business provides a one-stop shop to fabricators who specialise in smaller projects to source processed steel and ancillary products, all delivered to the group’s high standards of quality and service."