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Severfield adds extra £2m to capital investment as margin rises to 7%

Severfield said it is ahead of expectations after posting improved profit and revenue in its latest half-year results.

The steelwork specialist posted an improved pre-tax profit of £8.1m for the six months to 30 September 2016, up from £4.8m a year earlier, while revenue edged up to £118.2m from £117.1m.

The firm now has a pre-tax margin of 6.9 per cent, up from 4.1 per cent over the same period a year earlier.

Severfield added that it expects full-year profit to be “comfortably ahead of expectations”, while chief executive Ian Lawson said the firm would maintain its strategy of doubling profit before tax over the next four years.

The company also plans to invest an additional £2m in its bridge fabrication services, which will go towards the expansion of its bridge infrastructure business.

It added that efficiencies in the steel production process, as well as a two-year programme of contract management improvement, had both helped to boost profit and margins at the firm.

Major contract wins in the first half of the year include 22 Bishopsgate – as revealed by Construction News in October – new distribution centres including one for an major online retailer, a retail centre expansion and the Graphene Innovation Centre in Manchester.

Severfield is also currently working on the Ordsall Chord viaduct in Manchester, alongside a Skanska / Bam joint venture.

Its order book as of 1 November stood at £315m, compared with £185m in the same period a year earlier.

The firm added that it saw major infrastructure projects including Heathrow, Hinkley and HS2 as major opportunities in the medium term, and that steel production levels would remain strong “for the foreseeable future” as a result.

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