Severfield recovers after massive restructuring

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Steel group ​Severfield ​reported a solid order book of £171m and said the business ​is showing improved stability following the re​structuring last year.

The structural steelwork fabricator, which has worked on Arsenal’s Emirates Stadium, the Shard skyscraper and the London 2012 Olympic stadium, axed its chief executive Tom Haughey last year.

Severfield was forced to seek emergency funds after uncovering severe losses on contracts, most notably the Cheesegrater skyscraper in London.

In an Interim Management Statement covering the period to ​August 11, the Thirsk-based group said both its performance and underlying financial position are satisfactory and the ​group ​is on track for this financial year.

The ​g​roup ​was boosted by the sale of its investment property in June for £3.9m, which was in line with book value.

​Severfield’s chief executive Ian Lawson said there are signs of improvement, “but it remains likely to be later in the financial year before there is any notable impact on the size or mix of the order book”.

​The group’s Indian business is showing signs of improvement, with cost savings and increases in production.

The Indian order book stands at £34m.

​“​The UK business continues to progress well and India is showing encouraging operational improvements with market development remaining an area of high focus​,” said Mr Lawson​.

​“​Overall, the ​g​roup continues to be ideally positioned for recovery in the UK construction market with its good market position and strong balance sheet.​“​

Recent accounts show that Severfield has set executive salaries at the same levels as last year following ​the​ management reshuffle last year.

The company said it was able to secure the services of ​Mr Lawson, and new chief operating officer, Ian Cochrane, on comparable salaries to their predecessors.

The group said that Mr Lawson received £146,000 in salary and £50,000 in bonus since he started work on November 1.

Mr Cochrane received £227,000 in salary and £169,000 in bonus.

PIC: Jonathan Gawthorpe

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