Big project wins mean strong pipeline of work for structural steel group

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Thirsk-based structural steel group, Severfield, says its trading in the first five months of the 2022 financial year has continued to be positive and is in line with management’s expectations.

Issuing a trading update for the financial year ending 31 March 2022, the business says its financial position remains good, although recent steel and other input price rises are impacting working capital in the short-term.

It notes profits for the 2022 financial year are likely to have a second half bias, with several ongoing contracts expected to deliver higher profits in the second half of the year.

Severfield’s UK and Europe order book at 1 September includes a significant amount of new work which it has secured over recent months and now stands at a new record level of £376m (1 June 2021: £301m), of which £291m is for delivery over the next 12 months.

The listed company states this volume of work means it is well placed, with a strong future workload for the remainder of the 2022 financial year and beyond.

Severfield’s update adds: “The growth in the order book has been driven by several significant project wins including the new stadium for Everton FC, two large and various smaller distribution facilities in the UK, new HS2 bridge packages and other bridge awards reflecting investment in infrastructure by Highways England and Network Rail.

“The order book remains well-balanced, showcasing the benefits of our strategic diversification over recent years, and contains a healthy mix of projects across the Group’s key market sectors.

“In terms of geographical spread, of the order book of £376m, 90% represents projects in the UK, with the remaining 10% representing projects for delivery in Europe and the Republic of Ireland (1 June 2021: 84% in the UK, 16% in Europe and the Republic of Ireland).

We continue to be very encouraged by the current level of tendering and pipeline activity across the Group.

“We remain well-positioned to take advantage of further significant opportunities, including in the industrial and distribution, transport infrastructure, commercial office, nuclear and data centre sectors, providing us with extra resilience and the ability to drive future profitable growth.”