Severfield’s order book holds court

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Severfield, Britain’s biggest steel work contractor, said its order book has soared to a six-year high of £270m as it undertakes prestigious new contracts at Wimbledon’s No. 1 Court and Tottenham Hotspur FC’s new ground.

The Thirsk-based company, which supplied the steel for Arsenal’s Emirates Stadium, the Shard skyscraper and the London 2012 Olympic stadium, said it has benefited from growth in work outside of London.

The group said revenue jumped 19 per cent £239m in the year to March 31 and underlying pre-tax profits leaped 59 per cent to £13.2m as the group puts its previous troubles behind it, which included problems over the giant bolts used on London’s “Cheesegrater” skyscraper.

The Wimbledon contract is worth over £20m and will change the shape of No. 1 Court, introducing more seating and a retractable roof like Centre Court, which Severfield also worked on. The firm has already started the design and fabrication work and will start work on site after this year’s Championships, which start on June 27.

Severfield is also providing the steel work on Spurs’ new ground and the contract is worth £50m. The new stadium is set to open for the start of the 2018 season.

Severfield said it has undertaken 120 projects over the year, up from around 90 last year. Aside from the high profile ones, it has also worked on office developments, stadiums, warehouses, distribution centres and transport projects.

Severfield’s CEO Ian Lawson said: “We’ve seen a myriad of industrial warehousing contracts and we’re doing a lot at Doncaster iPort. We’re also doing work on road bridges and in rail.

“We are moving forward because the opportunities are out there in the market place. We are making the most of the opportunities.”

He said that 12 months ago there were opportunities, “but we didn’t like the pricing”.

“Now pricing levels are more realistic and there is also more understanding on where the risk lies,” he said.

The group said it made a conscious decision to reduce revenue rather than just win any work it could get. This has paid off with a vast improvement in profits.

“I’m delighted with how the year has gone,” said Mr Lawson.

“Our people have worked very hard to ensure the business moves forward. We are encouraged about the next 12 months. With the current UK order book at its highest level for over six years and a continued stable market environment, the group is well placed.”

Analyst Andy Douglas at house broker Jefferies said: “Severfield’s 2016 results are ahead of our forecasts across the board, with good progress being made in the year. Pleasingly, the UK order book stands at £270m, which should be taken well by the market. Management are upbeat about the outlook for the group and are targeting a doubling of pre-tax profits by 2017. This is a very good set of results.”

Severfield said it is keen to continue to take steel from Tata’s former Scunthorpe site, which has been bought by Greybull Capital and renamed British Steel.

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The All England Lawn Tennis Club has a new master plan for the long term improvement of the facilities at Wimbledon, with the specific aim of ensuring that Wimbledon continues to be regarded as the finest stage in world tennis.

One of the first projects was the opportunity to improve No.1 Court by installing a new fixed and retractable roof. The retractable roof will, just like Centre Court, allow for uninterrupted play irrespective of the weather thereby guaranteeing tennis for around 27,000 spectators on the two main show courts.

The remodelling of No.1 Court will create wider, more comfortable seating throughout the Court and two additional tiers of 900 seats.