Healthy and diverse order book offers optimism for structural steel business

Structural steel group, Severfield, says its financial performance in the first five months of the year is in line with expectations and its cash and balance sheet position remains strong.

The Thirsk-based group says its UK and Europe order book stands at £479m as of 1 September (1 June: £510m), of which £337m is for delivery over the next 12 months.

The order book remains well-diversified and contains a good mix of projects across the group’s key market sectors.

In terms of geographical spread, 90% of the order book represents projects in the UK, with the remaining 10% representing projects for delivery in Europe and the Republic of Ireland.

Severfield notes that since publication of its 2023 results in June, it has secured a significant amount of high quality new work and variations to existing contracts, and its large order book continues to provide good earnings visibility for the remainder of the 2024 financial year and beyond.

But it the group notes: “The current backdrop of more persistent high inflation and rising interest rates is resulting in some ongoing delays in the conversion of our existing pipeline of opportunities, as clients wait for economic stability, together with some lower tendering activity, particularly in the distribution sector.

“These more challenging recent market conditions were also a factor in the decision by Sunset Studios to pause construction on its planned new film production base in Hertfordshire, a contract which was removed from the order book in July.

 “Many of our chosen markets continue to have a favourable outlook – the group has a prominent position in market sectors with strong growth potential and is well-positioned to win projects in support of a low-carbon economy.

“The outlook for the group remains positive and our businesses are well-positioned in markets with excellent long-term growth opportunities.”