Severfield has unveiled hefty profits powered by soaring steel prices and increased business activity.
The UK’s largest steel manufacturer reported a 17 per cent spike in underlying earnings, which climbed to £12.1m compared to its figures from 12 months ago.
It also reported a 20 per cent boost in revenues to £234.9m for the first six months of trading.
The company’s outlook for the UK and Europe remains bullish, with tendering and pipeline activity remain at consistently high levels.
Severfield’s headline numbers also reflect high inflation rates, which are driving up costs across the supply chain but also the revenues the company can generate.
The group has recently secured upcoming deals to provide steel for Google’s headquarters at King’s Cross Station and for Everton’s new stadium in Liverpool, Merseyside.
Period-end net debt also fell from £18.4m to £15.8m between the first and second quarter.
Management expectations are unchanged, and group has maintained its UK and Europe order book at £464m – which is down on June when it peaked at £486m.
This includes India order book climbing to £143m this month, in line with continued demand for structural steel in India
Severfield has increased its interim dividend by eight per cent to 1.3p per share, up from 1.2p per share.
Profits from its Indian business, JSSL, have also doubled to £600,000 from £300,000 just three months ago.
This includes opportunities in the industrial and distribution, transport infrastructure, nuclear, data centre and commercial office sectors.
Chief executive Alan Dunsmore, said: ‘The group has delivered a strong performance in the first six months of the year against a difficult macroeconomic backdrop. Our high quality order book reflects our significant market sector, geographical and client diversification and provides us with good earnings visibility.”
He also approved of the group’s new simplified divisional structure in the UK and Europe, with three divisions: commercial and industrial, nuclear and infrastructure, and products and processing.
“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 2023,” he concluded.
Shares in the company were up 1.72 per cent on the FTSE All-Share in today’s trading.