The biggest structural steelwork contractor in Britain, Severfield, has continued its recovery as it posted a profit and saw revenue growth.
In the first quarter of 2016, the company, which is working as Carillion’s steelwork contractor for the Anfield stadium Liverpool redevelopment, made a £9.64 million profit before tax, with growth in revenue of 19% up to £239.4 million.
That marks a significant rise from the £201.5 million figure of last year, when it also lost £191,000 before tax, though that number did include a £6 million provision for the replacement of faulty bolts in the Leadenhall Building (the ‘cheese grater’ building).
This year has seen the continuation of bolt replacement work which is now finally nearing completion, with no additional provision made in the accounts for this year as it should be covered by the £6 million taken last year.
Furthermore, Severfield bosses are actually hoping to recoup some of this money, as the various parties’ lawyers continuing to dispute who should take responsibility for the cost of the total remedial works.
There has also been an increase in the underlying operating margin from 4.5% to 5.7%, which has achieved the target set back in 2013 at the time of the issue of rights, after Severfield had just announced substantial losses.
The UK order book currently stands at £270 million, a significant increase from £185 million seven months ago, and the highest level for over six years.
Ian Lawson, Chief Executive, said that Severfield has enjoyed a strong year with terrific profit and revenue growth as part of a positive cash performance.
He said that the firm’s focus on efficiency and operational improvements during the last three years has resulted in its increased profitability.
On the other hand, the company’s Indian joint venture continues to struggle and cannot afford its burden of debt despite being profitable at an operating level.