Google HQ boosts Severfield UK order book to £237m

Thirsk, North Yorkshire-based steel group Severfield said its revenue rose 5% to £274.2 million and underlying profit before tax soared 19% to £23.5 million in the 12 months to March 31, 2018.

Severfield’s total dividend will increased 13% to 2.6p per share and a special dividend of 1.7p per share is proposed to deliver a total cash return to shareholders of 4.3p per share.

More than 100 projects were undertaken during the year including the new stadium for Tottenham Hotspur FC, the retractable roof for Wimbledon No.1 Court and a new commercial tower at 22 Bishopsgate, London.

Severfield reported a UK order book of £237 million at June 1, 2018, including a landmark contract for the new Google headquarters at Kings Cross, London, for 2019.

Severfield CEO Alan Dunsmore said: “With a high quality and stable UK order book of £237 million and a strong pipeline of opportunities which provides us with good visibility of earnings, together with an encouragingly improving outlook for our Indian joint venture, we remain confident that 2019 will be another year of progress for the group.”

In his review, Dunsmore added: “The Google project, which was awarded in December 2017, represents an order in excess of £50m and will require us to provide over 15,000 tonnes of structural steelwork for a new eleven storey head office building.

“Work is scheduled to commence on site in the second half of the 2019 financial year.

Despite the uncertainties of Brexit, we continue to see a stable UK market, with modest economic growth forecast, and a pipeline of potential future orders that remains good.

“This pipeline includes a number of significant projects in the coming months across the commercial offices (both in London and outside), retail, industrial and distribution, data centres and infrastructure sectors.

“The market for data centres and industrial and distribution appears strong at present and although pricing remains competitive, the projects in these sectors play to our strengths requiring high quality, rapid throughput, on time performance and full co-ordination between stakeholders.

“Furthermore, we are seeing the continued re-emergence of the market in the Republic of Ireland, where we have historically had a strong presence, as well as a number of opportunities in mainland Europe …

Looking further ahead, UK Government policy is helping to drive a strong pipeline of major infrastructure projects particularly in the transport sector including HS2 stations and bridges, the expansion of Heathrow airport as well as the ongoing Network Rail and Highways England investment programmes.

“The combination of our in-house bridge capability, which has seen significant investment over recent years, and our historical record in transport infrastructure, leaves us well positioned to win work from such projects, all of which have a significant steel content …

“In India, a significantly improving market position, a record order book of £106m and a growing pipeline of commercial opportunities, positions the business well to deliver future profitable growth …

Overall, both the performance of the UK business and the Indian joint venture, are consistent with the continued progress towards our strategic targets, including the doubling of 2016 underlying profit before tax to £26m by 2020.”