Last Updated 22nd January 2023
Severfield plc
Severfield is the largest supplier of structural steel in the UK. The north Yorkshire-based group has a turnover of around £400 million, significantly ahead of its nearest rival.
The group, which is listed on the London Stock Exchange, has a new ”market-focused” structure with three divisions: commercial and industrial; nuclear and infrastructure and products and processing. Severfield also has a joint venture which operates in India.
The group supplies virtually all sectors across the industry and has worked on numerous landmark projects, notably the Shard and the Olympic Stadium. The group has six sites (including a plant in India) around 1,580 employees and has capacity for around 300,000 tonnes of fabricated steelwork. Its core services cover design, manufacturing, fabrication, delivery and construction.
Major clients include Brookfield, BAM, Laing O”Rourke, Sir Robert McAlpine, MACE, Morgan Sindall, Skanska and Balfour Beatty, and developers such as Stanhope, Hammerson, British Land, LandSec, Network Rail, Canary Wharf and Grosvenor. Projects include office developments, stadia, warehouses and distribution centres and infrastructure projects.
Significant projects for the group in recent years have included the Co-op Live Arena in Manchester, the Google hq King”s Cross and Everton F.C.’s new stadium. Other landmark projects have included the new stadium for Tottenham Hotspur FC, the retractable roof for Wimbledon No.1 Court and a new commercial tower at 22 Bishopsgate.
The firm has rebounded well from Covid and its UK and European order book as at November 2022 stood at £464m (compared to £486m in June ) and bolstered by new industrial and distribution (31% of its order book), nuclear and data centre projects. Acquisitions in recent years have expanded the group’s opportunities in rail electrification and nuclear sector work.
In late 2022, Severfield reported that tendering and pipeline activity remain at consistently high levels in the UK and Europe. Key sectors where it saw opportunities included industrial and distribution, transport infrastructure (17% of its order book in June), nuclear (8%), data centre and commercial offices (18%).
In late 2022, Alan Dunsmore, chief executive officer, said: “The resilient order book, combined with our strong balance sheet and simplified divisional structure, gives us confidence in the future performance of the business and so we are maintaining our expectations for full year 23.”
Financials
To view the financials for Severfield Plc., visit Companies House and use Company ID 01721262.
Severfield put in a resilient performance in the year to March 2022 with revenues up 11% at £403.6 million and underlying pre-tax profits also rising 11% to £27.1 million, against £24.3 million previously. The underlying operating margin at the UK & Europe business weakened slightly to 6.7%. In the half to end-September 2022, the group”s interim figures showed underlying pre-tax profits of £12.1, up from £10.3 million previously, on a turnover up 20% at £235 million. Net debt stood at £15.8 million, down from £18.4 million and the interim dividend was increased by 8%. Despite inflationary pressures, the group believed its high quality order book gave it a good visibility on profits through 2024.
UK & Europe
Located at Dalton in north Yorkshire and Lostock in Lancs, Severfield UK is the country”s largest structural steel business. The group”s 55 acre site at Dalton has 10 production lines and can produce around 1,500 tonnes of steel per week. Meanwhile, the group has been investing in its main production centres at Dalton Lostock and Eniskillen.
The firm”s £308 million commercial and industrial order book includes a mix of projects across sectors. Significant commercial and industrial contracts wins in 2022 include fabricated steel for the Envision Battery Plant in Sunderland for Nissan UK and Sunderland City Council together with various large – and several smaller – industrial and distribution buildings. The firm’s workload on film and tv studios for the growing UK film, television, advertising and gaming sector is also expanding.
Severfield’s £151 million nuclear and infrastructure order book has been bolstered by a large steelwork package at Hinkley Point nuclear station and new bridge contracts from Highways England and Network Rail. Encouraged by the £650 billion of funding outlined in the National Infrastructure Strategy, Severfield has high hopes for more work on roads, railways, power networks, telecoms and other UK infrastructure projects.
The firm’s products and processing division involves a growing modular product ranges based in Sherburn in Yorkshire which supplies smaller-scale projects and provides a one-stop shop for smaller fabricators to source steel.
Meanwhile, Construction Metal Forming provides frame and deck profiles, purlins and side rail systems for the cold formed steel market which has grown through increased use of steel in off-site and modular construction. A new plant in Wales has expanded capacity.
India
The group launched JSW Severfield Structures, its Indian joint venture with JSW Steel Ltd, in 2010 and is ramping up its Bellary facility to a maximum capacity of c.100,000 tonnes, The heavy investment has seen many of Severfield”s features included in the JSSL plant which serves the Indian markets. The group’s share of the venture’s profit doubled to £0.6 million in the first half of 2022/23 and revenues rose 70% to £70.3 million whilst its order book was strong at £143 million.
Glenigan Data
Data from Glenigan highlight the continuing strength of Severfield”s markets across UK construction. They show that the group is the structural steelwork sub-contractor on Everton FC’s £500 million Bramley-Moore Dock stadium in Liverpool where work is continuing until summer 2024 (Project ID: 16334343).Glenigan data also shows that Severfield is the steelwork contractor on a £20 million industrial building project, Unit 2 Omega West at Warrington for Miller Developments, where work started in autumn 2022 and is set to continue until late 2023 (Project ID: 22066002).
Conclusion: Solid client list and scope to re-build margins
Despite the uncertain economic outlook, Severfield”s UK market appears to be holding up well, helped by a healthy pipeline of significant projects across all its major sectors and particularly in infrastructure – notably road, rail and nuclear-related work – and the industrial and distribution sectors. Increased budgets for key customers such as Network Rail, particularly on rail electrification work and Highways England, including the second Road Investment Strategy, bode well for the group. Price competition in the sector will continue to act as a brake on margins but the group”s recent acquisitions and its blue chip client list and healthy order book all leave it well-placed to maintain momentum.
Winning work with Severfield
Severfield-Rowen keeps a tight rein on costs, helped by new financial software and revised authority limits at all levels. As the UK”s largest steelwork contractor, the group puts a premium on co-operating both with its clients and supply chain. The group also has links with Nottingham Trent University covering work placements, graduate opportunities and R&D projects. Each subsidiary has a health & safety director and the group is accredited to OHSAS 18001 and BS EN ISO 14001.
Contacts
Suppliers interested in working with Severfield are invited to contact the group through a supplier request portal form on the group”s website at .
Tel: 01845 57741
A key contact on the buying side at Severfield (Design & Build) is :
Maurice Trousdale, Group Procurement Manager
Tel: 01845 57741