A TOUCH OF STEEL

Severfield sees a fall in order book value but stays on track for forecasts

STRUCTURAL STEEL firm Severfield said its UK order book has fallen in value since June, but remains in line with normal order book levels.

The Thirsk-based group said its UK order book now stands at £210m, down from £237m on June 1. This equates to eight to ten months of annualised revenue.

The group said the order book reflects a higher proportion of smaller projects, particularly in the industrial and distribution sector, which typically have shorter lead times.

“Our pipeline of potential future orders has remained stable with a good balance of work across all key market sectors,” Severfield’s chairman John Dodds told shareholders at the group’s AGM in York.

“Both the quality of the order book and the strength of the UK pipeline are consistent with our continued progress towards our strategic targets.”

Mr Dodds told investors that the group’s trading performance and financial position remains in line with management expectations and the outlook for the year remains unchanged.

“Following the higher profit from certain project completions in first half of the prior year, we expect the profits in the first and second half of the current year to be more equally weighted,” he added.

The group said its Indian order book has increased again to £128m from £106m in June.

Mr Dodds said: “With this record order book, and a growing level of new opportunities, which includes a number of interesting higher margin commercial projects, the Indian business (JSSL) is well positioned.”

Severfield has agreed with its joint venture partner, JSW, to increase factory capacity at its Bellary facility in southern India. The expansion will be financed by a combination of equity of £8m and debt of £8m, provided directly to JSSL by Indian lenders.