Strong balance sheet at structural steel group
Thirsk-based structural steel group Severfield has reported a UK and Europe order book of £270m at 1 September 2020 (1 June 2020: £271m) with all its factories fully operational.
The listed business says its tendering and pipeline activity remain encouraging, despite some client investment decisions being deferred.
It notes the pandemic related disruption experienced by the Group has impacted profitability, particularly in the first quarter of the 2021 financial year.
But Severfield says overall activity levels have continued to increase since the beginning of the lockdown, with activity returning to pre-lockdown levels in the second quarter of 2021.
In an update published this morning, Severfield adds: “The Group’s balance sheet and cash position remains strong.
“Since 31 March 2020, when the Group reported net funds of £16.4m (including the outstanding acquisition loan of £13.1m for Harry Peers), the Group has continued to operate in a net funds position, maintaining significant amounts of cash headroom in banking facilities which mature in October 2023.
“Cash management remains a priority for the Group and our strong financial position has been carefully managed during this current uncertain period whilst ensuring that we continue to support our supply chain partners.
“Our strong financial position also means that, whilst we furloughed some of our workforce in the first quarter of the 2021 financial year, all of whom have since returned to work, we will not be claiming for support under any employee-related government support packages including the Coronavirus Job Retention Scheme.
“In addition, borrowings of £15m, originally drawn down in late March under the Group’s revolving credit facility (‘RCF’) as a precautionary measure in response to the COVID-19 outbreak, have now been repaid.”
As announced with Severfield’s full year results on 19 June 2020, John Dodds, non-executive chairman, is retiring from the board at the conclusion of today’s AGM, having served for ten years, including nine years as chairman.
Kevin Whiteman, who has been on the board since 2014 and is the company’s current senior independent director, will succeed Dodds as non-executive chairman.
