Britain’s biggest steelwork contractor has restored margins to 7% after streamlining production and tightening up on contract management.
This morning chief executive Ian Lawson revealed pre-tax profit in the first half had jumped to £7.4m from £3.1m in the same period in 2015 from stable turnover of £118m.
Lawson said the steelwork contractor was on course to exceed management expectations for the full-year as orders and performance improved.
Severfield said it planned to spend a further £2m developing its bridge fabrication facilities over the coming year to capture the forecast uplift in Government infrastructure spending.
He said: “Margins are significantly up, our order book has continued to rise to a six year high while our pipeline remains steady.
“In combination with the strong cash generation in the first half, this has given us the confidence to increase the interim dividend by 40% and we expect profit growth for the full year to be comfortably ahead of expectations.
He added: “We have a strong platform from which to implement our strategy, which targets to double our underlying profit before tax over the next four years, and continue to create value for our shareholders.”
Severfield said the uplift in operation margin from 4.3% to 7% over the year was also partly helped by a contribution from its Composition Metal Flooring business, where it holds a 50% stake.
Major new orders include the commercial tower at 22 Bishopsgate in London’s square mile, new distribution centres including one for an on-line major retailer, a retail centre expansion and the Graphene Innovation Centre in Manchester.
Lawson added the pipeline for potential future orders also continued to remain steady with production levels set to remain strong for the foreseeable future.
from Construction Enquirer http://www.constructionenquirer.com/2016/11/22/steelwork-contractor-severfield-lifts-margin-to-7/
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