Steel fabricator Severfield has boosted operating profits amid what it says is a challenging market.
The York-based firm told investors on the London Stock Exchange that operating profits had risen 17% to £14.2m in the first half of its 2024 year, despite an 8% drop in revenue to £215.3m caused by a fall in its core construction operations. Severfield said some customers were waiting for economic stability to improve before confirming contracts and that there had been competitive pricing within the distribution sector.
However, it said there continued to be large opportunities in the UK and continental Europe where it has recently acquired Dutch counterpart Voortman Steel Construction in a €24m deal. Bosses said the acquisition has contributed £28m revenue and £1.5m underlying profit in the six months since.
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The company reported a UK and Europe order book of £482m, including £319m of work which is for delivery over the next 12 months. The firm’s current projects include a new stadium for Everton FC, the Envision battery plant in Sunderland, and the LHR 11 data centre and the Excel Arena, in London.
Elsewhere, Severfield said it was confident in the Indian market and its joint venture JSSL, despite a 32% fall in revenues which largely reflected a timing of contracts. The firm has acquired land in Gujarat in order to expand to accommodate expected demand.
Alan Dunsmore, chief executive officer, said: “In the period we have delivered further profit growth, successfully integrated Voortman, our latest acquisition, reported strong cash generation and have continued to strengthen our balance sheet. We have secured a significant amount of high-quality new work, across a variety of sectors, in the UK, EU and India. Although the wider market backdrop continues to be challenging, given our successful track record, diversified activities, the strength of our order books and the favourable longer-term outlook, we have increased the interim dividend by 8% and continue to expect to deliver further progress across the group.”
Original artice – https://business-live.co.uk/all-about/yorkshire-humber
