Severfield has swung to a £7.6m pre-tax loss for the first half of its financial year as weaker demand and tighter pricing hit the steelwork specialist. Revenue fell 18% to £206m, with commercial, industrial and data-centre markets remaining subdued and factory volumes under pressure.
Underlying pre-tax profit dropped sharply from £16m a year ago to £0.6m, reflecting under-recovery of factory overheads. The group is still dealing with the financial impact of previously disclosed bridge welding issues on highways and HS2 projects.
Net debt has been cut by around half since the year-end to £21.7m, supported by £20m of insurance receipts linked to the bridge remediation programme. Severfield has cancelled its interim dividend to preserve cash ahead of a further £10m of bridge-related payments due in the second half.
The company has also booked an additional £3.3m provision for other bridge costs, including third-party consequential expenses and claims received since its July full-year results. Management said these legacy issues continue to weigh on short-term performance but are being actively managed.
New chief executive Paul McNerney has launched a full review of Severfield’s operating model, with a refreshed strategy to be set for 2026. He said his focus is on redefining strategy, strengthening manufacturing and delivery capabilities, improving efficiency and sharpening the group’s emphasis on engineering performance for clients.
The UK and Europe order book remains solid at £429m, with £324m scheduled for delivery over the next 12 months. Tendering activity is starting to recover, with opportunities emerging in battery plants, data centres and green energy projects, which the group sees as key drivers of medium-term growth.
India continues to be a strong performer, where Severfield’s joint venture JSSL has delivered a marked turnaround and now holds a record £286m order book. The JV is benefiting from rising domestic steel demand and capacity expansion at its Gujarat facility.
Despite the first-half loss, Severfield said its full-year expectations are unchanged, underpinned by secured second-half work and improving tender volumes in core markets. The board is banking on operational improvements and a healthier pipeline to restore profitability as market conditions gradually improve.
