Steel group Severfield sets its sights on 1 Undershaft and Google's new HQ after posting bumper first-half profits

Francesca Washtell
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1 Undershaft's public spaces will be managed by the Museum of London (Source: Dbox for Eric Parry Architects)

Steelmaker Severfield has posted bumper first-half profits for 2016 and set its sights on helping construct City skyscraper 1 Undershaft and the new Google headquarters in the capital.

Shares in the structural steel group were up 12 per cent today to 69.79p after Severfield posted a 69 per cent rise in underlying profit before tax, at £8.1m, in the six months to 30 September.

Ongoing streamlining in its operations and being more "aware" of which projects it pursues "rather than just taking anything on" were major drivers of the profit boost, chief executive Ian Lawson told City A.M.

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Read more: Steelmaker Severfield on track for the year due to pipeline of London projects

Revenue was flat, at £118m from £117m in the first half of last year, though its interim dividend rose 40 per cent to 0.7p per share and it said profit growth for the full-year will be "comfortably ahead of expectations".

Severfield's UK order book stood at £315m on 1 November, up from £270m at the beginning of June, while its India order book stood at £35m at the beginning of the month, up from £33m in June.

In the first half, the steel group undertook over 90 projects in sectors such as commercial office developments, industrial facilities, stadia and transport.

In October, the group won a contract in excess of £40m to work on the new Goldman Sachs headquarters, 22 Bishopsgate, for which work will start in December, and is setting its sights high on other London commercial developments.

Read more: Cheesegrater bolts to cost Severfield £6m

"1 Undershaft and the Google HQ are definitely jobs we'd like to compete on," Lawson said. 1 Undershaft is set to be the tallest skyscraper in the City.

The group is also working on a Tottenham Hotspur stadium contract where it will start work just after Christmas, has been offering design advice to the new Hinkley nuclear power plant and sees potential from projects such as HS2.

Lawson added that the major contribution the government can make to companies working in the structural steel market, which does not produce raw steel but produces construction-related products out of semi-finished steel, is to make its infrastructure vision clear.

I think what's important is what the government is going to do with its infrastructure plans going forward. I just want to see them confirm that infrastructure projects go ahead and see that the timelines for them are achievable. Projects can drag on and on, it can take forever to come to fruition. What's needed is to commit to it and stick to it.

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