Structural steel specialist Severfield says it has delivered a resilient performance against a difficult market backdrop as the group unveiled a refreshed strategy focused on improving margins, returns and cash generation rather than pursuing volume growth.<\/p>\n
The Thirsk-based\u00a0 business reported stable revenue of \u00a3454.3m for the year to 29 March 2026, compared with \u00a3450.9m the previous year, while underlying profit before tax was \u00a310.5m, in line with market expectations.<\/p>\n
The group said profitability during the year was impacted by competitive pricing, delays to project awards and lower activity levels in some of its core markets, although a stronger second-half performance helped underpin the full-year result.<\/p>\n
Severfield ended the year with a UK and European order book of \u00a3507m, with \u00a3339m scheduled for delivery over the next 12 months, providing good visibility over future activity levels.<\/p>\n
Its Indian joint venture, JSSL, continued to perform strongly, delivering a record order book of \u00a3344m and record output of 125,000 tonnes. The business is expected to become an increasingly important contributor to group growth and profitability over the medium term as it increases its exposure to higher-margin commercial projects.<\/p>\n
Net debt reduced to \u00a328.2m following what the company described as strong cash management, leaving leverage at 1.2 times EBITDA and providing around \u00a339m of available headroom within its banking facilities.<\/p>\n
The group has also extended its banking arrangements to June 2029, including two one-year extension options and an accordion facility to support future growth.<\/p>\n
During the year Severfield completed a significant simplification of its portfolio, progressing its planned exit from the Modular Solutions business while continuing work on a bridge remedial programme which is expected to be substantially complete during FY27.<\/p>\n
Non-underlying costs totalled \u00a350.3m and included \u00a38.3m of bridge remedial costs, \u00a312.6m relating to the closure of Modular Solutions and a \u00a322.2m non-cash impairment of goodwill and investments.<\/p>\n
Operationally, the group continued work on several major projects including the Agratas gigafactory in Somerset and the Hinkley Point C nuclear power station, while also completing the Salisbury Square development in London, the new headquarters for the City of London Police.<\/p>\n
A refreshed leadership team is now in place, led by chief executive Paul McNerney and chief financial officer Andrew Page, while a newly appointed Strategy & Transformation Director is overseeing four transformation programmes aimed at improving efficiency, project delivery and business development.<\/p>\n
As part of a strategic review, Severfield has set out a revised medium-term plan centred on higher-margin work, tighter operational discipline and a more capital-light operating model.<\/p>\n
The company said it would focus on sectors and geographies where its engineering expertise provides a competitive advantage, while making greater use of strategic partnerships to improve flexibility, reduce capital intensity and enhance returns.<\/p>\n
The strategy is supported by a new clients & markets function designed to strengthen customer relationships and improve project selection, alongside a move from a fabrication-led approach towards a more integrated delivery model.<\/p>\n
The group’s medium-term ambitions include revenue of \u00a3500m-\u00a3550m, sustainable operating margins of 7-8%, underlying profit before tax of \u00a340m-\u00a350m, return on capital employed above 15% and cash conversion in excess of 90%.<\/p>\n
Chief executive Paul McNerney said: “FY26 was a challenging year for Severfield, with profitability impacted by competitive pricing, delays to project awards, and lower activity in parts of our core markets.<\/p>\n
“Against this backdrop, the Group delivered stable revenue, underlying profit before tax in line with expectations and significantly improved net debt through strong cash management.”<\/p>\n
He added: “We have taken decisive action to simplify the portfolio, strengthen operational discipline and focus the business on sectors and geographies where our engineering capability gives us a clear competitive advantage.<\/p>\n
“Our refreshed strategy is designed to improve margin quality, cash generation and returns, supported by a more integrated and capital-efficient delivery model.”<\/p>\n
Looking ahead, Severfield said FY27 will be a transition year, with profitability in the first half continuing to reflect lower-margin contracts secured in a more competitive market. However, several larger and higher-value projects are expected to begin later in the year.<\/p>\n
The board said it expects underlying profit before tax for FY27 to be in line with previous guidance of between \u00a312m and \u00a315m.<\/p>\n
McNerney said: “While FY27 remains a transition year, our order book, growing Indian platform and transformation initiatives give us confidence in the Group’s medium-term potential.”<\/p>\n","protected":false},"excerpt":{"rendered":"
The group said profitability during the year was impacted by competitive pricing, delays to project awards and lower activity levels in some of its core markets<\/p>\n","protected":false},"author":271992,"featured_media":2150253,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[53262,7,120781,78],"coauthors":[137100],"class_list":["post-2156530","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-news","category-manufacturing","category-markets","category-sponsored","tag-featured-story","tag-yorkshire"],"yoast_head":"\n