Contractor warns says major contracts are being scrapped or put on hold
The £1 billion Tottenham Hotspur stadium in north London was a major Severfield project
Liverpool FC via Getty Images202
Jonathan Prynn, Business Editor @ JonPrynn1 minute ago
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Britain’s biggest structural steel contractor Severfield, which includes Lord’s cricket ground expansion, Tottenham Hotspur Stadium, Arsenal’s Emirates Stadium, and the West End’s Outernet among its high profile London projects, today warned of lower profits in a “challenging” market.
In a gloomy trading update the company said it had been hit by new projects being scrapped or put on hold “consistent with the current lower level of business confidence in the UK economy as a whole.”
Shares in Severfield immediately slumped more than 40% at the start of trading falling by 19.7p to 28p.
Pride exhibition at Severfield project the Outernet in 2024
Outernet
It said that market conditions in the UK and across Europe “have shown no signs of improvement, with pricing remaining at tighter levels for longer than expected in a competitive market and project opportunities continuing to be either cancelled or delayed.”
This included one particular large unnamed project for which steel production was expected to start in January and which has now been delayed until early next year.
Severfield, which has also worked in the new Everton stadium, the Riverside stand at Fulham football club and Wimbledon’s Number One court, said it has not been possible to secure sufficient short-term orders to offset overheads in the fourth quarter.
As a result pre-tax profits for the year to the end of March 2025 are now only expected to be in the range of £18 million to £20 million, with a further fall in 2026 .
The UK and Europe order book at 1 February was £403 million, of which £281 million is for delivery over the next 12 months, while net debt at 31 January was £55 million.
The outlook for the coming year is being clouded by deferred decision making by clients and projects “not being awarded or progressing within normal timescales” an absence of large 'anchor' projects in the order book “and a general market backdrop which is not expected to improve in the short-term.”
However the company is more confident about the longer term prospects with emerging opportunities in areas such as data centres, manufacturing and offices, particularly some large scale developments in London.
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