Steel firm Severfield says the cancellation of a Hollywood-style film studio project in the UK contributed to a dip in sales.
The Thirsk-based steelwork business lost out on a £50m order when the owners of Sunset Studios decided to pause their project in Hertfordshire last year. New results for Severfield in the year to the end of March 2024 show revenue fell 6% to £463.5m and operating profits fell 12% to £26.4m. Underlying operating profit, before joint ventures and associates, increased to £37.7m.
Bosses said demand from India – where the firm operates a joint venture – was booming. JSSL, which is a a partnership between Indian JSW Ltd and the North Yorkshire firm, had a record order book at June 1 of £181m, up from £165m in November and including a mix of higher margin commercial work.
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Severfield said it had identified plenty of opportunities in the market where it is hoping to develop a new manufacturing facility. Earlier this year it acquired land in Gujarat to host the factory and is hiring to strengthen its sales and estimating teams.
In the UK and Europe, an order book of £478m, down from £482m in November last year, includes a majority of work for delivery over the next year. Conditions at home and across the continent were softer, particularly across the distribution and infrastructure markets where tendering activity was said to be picking up but bringing with it pricing competition.
Alan Dunsmore, chief executive officer, said: “We are delighted to be reporting another strong performance by the group, with our profits ahead of expectations. This is the result of an excellent operational performance and the success of our strategy to diversify the sectors and geographies we serve. This has enabled us to deliver enhanced returns for shareholders through our recent share buyback scheme, building on our 10 consecutive years of progressive dividends.
“Looking ahead, we have strong order books in the UK, Europe and India which are providing us with good earnings visibility through 2025 and beyond. With market conditions showing signs of improvement and with our businesses well-placed in markets that are expected to benefit from positive long term growth trends, which are unlikely to be impacted by the result of the upcoming UK general election, we are confident in the outlook for the business.”
Original artice – https://business-live.co.uk/all-about/yorkshire-humber