Severfield announces multi-million-pound investment in Indian factory
Structural steel group Severfield has seen its order book across India rise to £128m and has this morning announced a multi-million-pound expansion of its facility in India.
The Thirsk-based group said its Indian order book had increased again to £128m at 1 September (1 June: £106m).
Severfield added: “With this record order book, and a growing level of new opportunities, which includes a number of interesting higher margin commercial projects, the Indian business (‘JSSL’) is well positioned to take advantage of a market for structural steel in India which continues to improve.”
The firm has agreed with its joint venture partner, JSW, to increase factory capacity at the Bellary facility. The expansion will be financed by a combination of equity of £8m, provided in equal cash amounts of £4m by the Group and JSW, and debt of £8m, provided directly to JSSL by Indian lenders.
The listed firm will today hold its AGM in York and published a trading update ahead of the meeting, which stated that its trading performance and financial position remained in line with management expectations and the outlook for the year ending 31 March 2019 remained unchanged.
Severfield said: “Following the higher profit from certain project completions in first half of the prior year, we expect the profits in the first and second half of the current year to be more equally weighted.”
However, the firm said its UK order book stood at £210m as at 1 September, down from £237m on 1 June, but that remained in line with normal order book levels, which typically equated to eight to ten months of annualised revenue.
“The order book reflects a higher proportion of smaller projects, particularly in the industrial and distribution sector, which typically have shorter lead times. Our pipeline of potential future orders has remained stable with a good balance of work across all key market sectors.
“Both the quality of the order book and the strength of the UK pipeline are consistent with our continued progress towards our strategic targets,” said Severfield.
