Margins at steel specialist Severfield have hit 7.5 per cent as profit and turnover both increased in its latest full-year financial results.
The company reported revenue of £262.2m and pre-tax profit of £19.8m for the year to 31 March 2017.
This represented growth of 9.5 per cent and 50 per cent respectively on the £239.4m and £13.2m posted in its previous full-year results.
Severfield said it was on track to deliver its strategy of doubling pre-tax profit by 2020, while profit margin climbed to 7.5 per cent from 5.5 per cent a year earlier.
The company has secured and worked on a number of high-profile projects over the last 12 months, including Tottenham Hotspur’s new stadium for main contractor Mace, and 22 Bishopsgate with Multiplex (pictured) where the firm replaced fellow steel specialist William Hare in October last year.
Speaking to Construction News, acting chief executive Alan Dunsmore said Severfield’s return on capital employed, which has risen to 14.6 per cent from 9.7 per cent last year, is now “comparable with both main contractor clients and our engineering peers”.
“That’s the return that we need to be getting to with the investment we’ve made over the years,” he said.
Capital investments in the year included £2m in its bridge fabrication services, which will go towards the expanding fabrication facilities.
Mr Dunsmore, who took up his role after chief executive Ian Lawson stepped down due to ill health in March this year, said the investment in bridge fabrication machinery would be complete by the end of this financial year.
He added the firm was “very busy” in the London market despite a slight slowdown in the commercial sector.
“There’s certainly not as many big projects in the pipeline as there were this time last year, but there’s a steady stream of bread-and-butter mid-sized projects coming through – 14 to 15 storeys,” he said.
“What we’re seeing is there are less speculative projects going forward as there were around two years ago, but the market remains busy.”
The company also revealed that all remedial bolt replacement works at the Cheesegrater were completed in the last financial year, with the cost in line with what was reported in its 2015 results.
However, the firm added that discussions were continuing “with all stakeholders to determine where the financial liability for the remedial costs should rest”.
Severfield also reported a reduction in its order book to £229m as of 1 June 2017 from a record high of £315m at 1 November 2016, which the company described as “a return to more normal levels”.