Record order book for listed structural steel business
Structural steel group, Severfield, has reported a record UK and Europe order book of £479m in a trading update for the year ended 31 March 2022.
For FY22, the Thirsk-based Group expects to deliver a full year result in line with its management’s previous expectations.
The business says its UK and Europe order book remains well-diversified and contains a healthy mix of projects across its key market sectors.
94% of this order book represents projects in the UK, with the remaining 6% representing projects for delivery in Europe and the Republic of Ireland.
Severfield’s update states: “We continue to be encouraged by the current level of tendering activity across the Group, both in the UK and in continental Europe, and are well-positioned to take advantage of some significant opportunities in the industrial and distribution (battery plants and distribution centres), stadia and leisure, transport infrastructure, nuclear and data centre sectors.
“Despite seeing further input cost inflation (including in steel prices) and some disruption to raw material supplies as a result of Russia’s invasion of Ukraine, we are currently managing these effectively, and steel remains largely a pass-through cost for the Group.”
Severfield adds that its Indian joint venture, JSSL, has performed profitably and in line with expectations in the second half of the year.
This follows a difficult start to the year when output was disrupted by the second wave of COVID-19.
The financial position of the Group remains good. Net working capital has increased in H2 reflecting the impact of steel and other input price rises, together with higher steel purchases to meet production requirements in early FY23.
In December 2021, the Group completed a refinancing of its revolving credit facility. The new £50m RCF provides additional liquidity above the £25m RCF which it replaced and extends the term of the facility which now expires in December 2026.
Severfield says the new facility provides it with enhanced liquidity and long-term financing to help support its growth strategy.