Severfield has enjoyed a record order book of £393m in the UK and Europe over the past six months, with plans to construct bridges, industrial centres and the new stadium for Everton F.C.
The structural steel group’s revenues are up five per cent year on year, reaching £195.5m, while underlying profit before tax has increased from £8.4m to £10.3m over the same period.
It has consolidated its position in the market despite inflationary pressures, soaring energy costs and industry-wide supply chain issues.
Wholesale energy prices have risen 250 per cent while global supply chains are still recovering following continuous pandemic-driven disruption as economies reopen after multiple lockdowns.
Earnings per share have remained stable at 1.7p and the company is sustaining its positive expectations for the full-year.
Severfield has also raised its interim dividend by nine per cent to 1.2p per share.
Despite increased profits, period-ending net has risen to £6.7m, a £10m downward swing on £4.4m net funds in the previous period.
The debt includes acquisition loans of £17.8m, and the steel group is confident is strong order book gives its good profit visibility through 2023.
Commenting on the results, Alan Dunsmore, chief executive officer argued operational and strategic progress over the past few years has underpinned its strong first half performance.
He said: “Tendering activity in UK and Europe remains very encouraging and our pipeline of opportunities spans a wide range of sectors demonstrating the benefits of both the strategic acquisitions and the organic investments we have made in recent years.”
Meanwhile, its order book in India has not increased over the past six months, remaining at £140m, with the country still recovering from multiple Covid-19 waves.
However, Severfield expects the market to improve and believes there is an underlying and growing demand for steel as its economy continues to develop.
Building projects are expected to characterise India’s economic growth as its Prime Minister Narenda Modi looks to meet growing expectations for high standards of living from India’s burgeoning middle class – even if his much anticipated and highly controversial farm reforms failed to materialise.
Dunsmore added: “We are making strong progress in our Indian business and are well-placed to capitalise on this exciting market opportunity as the economy recovers from the pandemic and construction continues to transition from concrete to steel.”
Severfield is trading 0.56 per cent up on the FTSE All-Share following the results.