Glowing annual results from the UK’s largest structural steel specialist were overshadowed yesterday by the revelation that problems with the landmark “Cheesegrater” building in London would cost it £6m to remedy.
Severfield plc, which is based at Dalton, near Topcliffe, emphasised that its underlying profits before tax had more than doubled from £4m to £8.3m, but the results were tarnished by news that it had incurred costs over the year of £1m for remedial work on the building, and recognised a “non-underlying charge” of six times that figure.
The problem concerns an unspecified number of 5-inch diameter bolts which fell from the City of London structure – officially known as the Leadenhall Building – last year, prompting developer British Land to fence the building off. Construction of the building had been completed in 2013.
Severfield launched an inquiry into why the bolts failed and said yesterday that it was replacing all bolts at risk of failure in a remedial programme being carried out with British Land, Laing O’Rourke and Arup. The work is likely to continue to the end of the year.
Severfield, which employs 1,200 people, also said its UK underlying operating margin had improved to 4.5 per cent, from 3.3 per cent in 2014 – in line with expectations.
It said its healthy UK order book of £194m at June 1 2015 reflected an improving market position, and also reintroduced a proposed final dividend of 0.5p per share.
CEO Ian Lawson said he was pleased with the result: “Margin improvement is being sustained, we have a very solid order book and pipeline and we are particularly pleased that we have recommended the reintroduction of a final dividend. Our cash flows and balance sheet remain strong.
“Furthermore, our continued investment in our equipment, brand, market position and our people means that we have the skills and capacity to sustain momentum and fulfil demand, securing key projects in growth sectors as the UK, and Indian, infrastructure markets continue to develop.”