Severfield has benefited from a diverse order book including jobs in the booming data centre and industrial sectors, according to half-year results published today.
The contractor’s £464m pipeline also includes jobs in the nuclear sector. It said the “high-quality order book” gives it “good profit visibility” looking ahead to the financial year for 2024.
Severfield chief executive Alan Dunsmore said the order book “reflects our significant market sector, geographical and client diversification, and provides us with good earnings visibility”.
In September, consultancy EY-Parthenon’s construction leader for the UK and Ireland, Ian Marson, told Construction News that firms with a more diverse portfolio had an easier time last year than smaller, specialist contractors, and would likely continue to do better as inflation slows down activity in individual sectors.
Larger companies with a more diverse portfolio “can just absorb that risk within their overall portfolio”, he said.
Severfield’s strong order book was announced alongside a healthy pre-tax profit of £10.2m for the six months ending 24 September 2022, in comparison with £7.9m in the equivalent period last year.
Revenue was also up, reaching £234.9m compared with £195.9m previously.
Data centres and industrial warehouse projects have soared in popularity over the past year.
Warehouse construction projects have seen a 150 per cent rise in value, after a surge in online shopping in the wake of the COVID-19 pandemic.
John Sisk & Son and Winvic are among a host of contractors focusing on warehouse jobs as a sector with potential for further growth.
Demand for data centres is also on the up, mainly driven by an increased reliance on cloud storage and the trend towards employees working remotely from home.
The trend helped to boost TClarke’s pre-tax profit and drive Severfield’s order book to record levels.