Steel constructer on the up after Cheesegrater debacle

STEEL specialist Severfield which has a site in Bolton has recovered from last year’s Cheesegrater building incident with profits up by £8m.

Revenue grew 19% to £239.4m, whilst its £8.6m in pre-tax profits were a significant improvement on the £100,000 made last year.

The company said this was due to operational improvements. The company announced 19 job cuts earlier this year as part of these efficiencies.

The remedial costs relating to the Leadenhall building in London (better known as the Cheesegrater) after bolts came off the structure cost Severfield £6m in non-underlying, one-off charges , impacting on last year’s bottom line.

This year, despite uncertainty, the Thirsk, Yorkshire-headquartered business has brought it back from the brink.

Challenges surrounded the closure of Tata’s UK steel plate production facility, with concern over the future of the rest of the steel sections business, before it was acquired by Greybull Capital earlier this year and renamed British Steel.

The company said: “While some of the issues around the UK steel industry have been highly publicised and a source of concern for many, it is important to recognise that only around 40% of steel used in UK construction is produced in the UK, the majority being imported.

“Nevertheless, we are pleased to report that we have managed the changes which affect us with no disruptive impact on the business.”

In November 2015, Severfield invested in a 50% share of Composite Metal Flooring, which manufactures decking used in construction, costing £6.9m.

The company said that the continuing growth of the retail sector, resurgence of a commercial office market outside London and transport infrastructure all contributed to a strong order book, worth £270m.

Ian Lawson, chief executive officer, said: “Severfield has had a strong year with excellent revenue and profit growth and a good cash performance.

“Our increased profitability is as a result of our focus on operational improvements and efficiencies over the last three years and with the strength of the platform from which the group now operates and the opportunity for further margin improvement, our target is now to double our underlying profit before tax over the next four years.

“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 to continue delivering against its near-term financial targets whilst continuing to build for the longer term. Overall the outlook remains encouragingly positive.”