Severfield operating at full capacity
STRUCTURAL steel company Severfield-Rowen said that all its divisions were operating at full capacity despite a dip in demand in the UK market.
The North Yorkshire firm, whose projects include Terminal 2B for BAA at Heathrow Airport, and a new rehearsal studio for the BBC in Cardiff, said that its order book currently stands at £308m.
It includes a recent win to provide and erect the steel for the Shard of Glass, London Bridge development.
The firm’s overseas operations are also continuing to perform well with sales opportunities in export markets being supported by Severfield’s newly opened Abu Dhabi.
It said that the target remained to develop significant export volumes for 2010, to be manufactured largely at Severfield’s UK facilities.
Elsewhere, progress on a new Indian plant – a joint venture with India’s third largest steel company – is on schedule to be completed by the summer of 2010.
“The company is appropriately focused on several key sectors including energy, transport and infrastructure,” Severfield continued in its interim management statement.
“As predicted, margins in the UK continue to be under pressure as competitors attempt to maintain viable output levels. The company has a strong balance sheet and financial base, and continues to generate strong cash flow, still expecting to further reduce its debt by the end of 2009. It believes it is well positioned financially and strategically for the future.”
In March, Severfield reported a £93.6m increase in revenue for the year ended December 31, 2008 from £300.7m to £394.3m.
Pre-tax profit for the period increased to £52.5m – a jump of 14.3%. Year end net borrowings fell drastically from £49.1m in 2007 to £15.8m.
At the time it said its order book represented around 12 months activity and consisted of business from all sectors of the UK market, including power stations, education, bridgework, stadiums, health and transport.
