Severfield's high

Severfield-Reeve, the structural steel group, sees no sign of the much-talked-about recession as profits are high and the order book is at record levels.

Speaking on Monday as Severfield unveiled its interim results, John Severs, MD, said: "I hear people say we are in recession one day, but the next morning we pick up another job. Why? Are we doing it right while the others are getting it wrong, or are we increasing our market share in a declining market?"

And while London is singled out by others as going off the boil, it is proving to be Severfield's strongest area. Currently undertaking the design work for the £8 million subcontract at City Point, involving 6,000 tonnes of steel, Severfield has "just picked up a few more jobs".

The group's interim results (six months to 30 June) show turnover 22 per cent higher at £64 million, with pre-tax profit ahead at £5.1 million (£3.9 million). Operating margins improved to 8 per cent. Severs said: "With our current order book in excess of £50 million, we expect to be able to report another record year."

Half of Severfield's turnover comes from "semi-partnering" work. "I'd rather call it sensible tendering," said Severs. The steelwork specialist works directly for a couple of clients, BAA and Sainsbury, but the bulk of its workload comes from main contractors. "Among these, we try to work with friends as much as possible," said Severs. "These include Balfour Beatty, Alfred McAlpine, Bovis and Tarmac.

Exports of structural steelwork from the group's plant at Dalton, North Yorkshire, accounted for 16 per cent of turnover in the first half of the year. "That's about where it should be," said Severs. "The strength of sterling has had only a marginal impact on our businesses."

Severfield is quoting for Toyota's new plant in France. "It's the first big French job we've had a go at," said Severs. "The steelwork contract is worth around £10 million. We'll even have British erectors going out. We've got several friends bidding, such as Bovis and Amec. We're also quoting Japanese and French contractors."