Steel market still tough, says Severfield Rowen

23rd Mar 2010 08:21

Profits held up well at Severfield-Rowen in the year to December 31 despite a sharp fall in revenues, but the structural steel supplier said the strong margin performance would not be sustainable in 2010. Underlying pre-tax profit slipped to £49.8m from £52.5m as revenues fell to £349.4m from £394.3m. Severfield has been involved in several major construction projects, including the stadium for the London 2012 Olympics and the Shard of Glass tower at London Bridge.The company said that revenues were hit by factors such as clients outsourcing additional services such as decking and cladding to companies other than Severfield, and by a general lowering of prices during the year, particularly towards the end. However, it pointed out that margins achieved from the additional services it provides are not as high as those achieved on steel.Severfield said it expects 2010 to be a low point for structural steel demand in the UK, although the recovery in 2011 will be slow, it said.The company said that, while it achieved success with its first award for a project in Abu Dhabi, subsequent price falls mean that it will be very selective in export markets for the rest of 2010 and concentrate on increasing UK market share.