Severfield Issues Profit Warning Amid Project Delays and Market Strain
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Severfield has issued a profit warning in response to ongoing market difficulties and project delays. The company has revised its financial expectations downward, signalling a difficult period for both its operations and the wider industry.
Previously, Severfield had forecasted a strong financial year. However, unforeseen delays in project execution and rising operational costs have forced the company to lower its outlook. Sluggish market conditions and slower-than-expected decision-making from clients have been identified as the primary causes of this financial shortfall.
Challenges affecting the structural steel sector
Severfield’s difficulties reflect broader challenges within the structural steel sector, which is grappling with fluctuating material costs, prolonged planning approvals, and shifting project timelines.
In a statement, Severfield noted: “Whilst we continue to see a good pipeline of project opportunities, client decision-making continues to be deferred and projects are not being awarded or progressing within normal timescales, consistent with the current lower level of business confidence in the UK economy as a whole. This, in tandem with the absence of large ‘anchor’ projects in the order book and a general market backdrop which is not expected to improve in the short-term, is having a consequential impact on FY26.”
As a result, the company now anticipates an underlying pre-tax profit of £18m to £20m for the full year, down from £36.5m for the year ending 30 March 2024.
Many public and private sector developments have experienced funding setbacks and regulatory hurdles, leading to delays in procurement and construction. Economic uncertainty has made developers more cautious, resulting in postponed investments and project hesitancy.
Specific projects affected and financial implications
Severfield’s revised profit forecast is largely attributed to project delays that have disrupted expected revenue streams. While the company has not disclosed the full list of affected projects, industry analysts speculate that high-profile infrastructure and commercial developments have faced setbacks due to slow approvals, client funding issues, and supply chain constraints.
Regarding projects, the group added “Looking further ahead, we have already secured some attractive large projects for FY27, and we are also seeing future large opportunities in sectors such as data centres, manufacturing (industrial) and commercial offices, including the emergence of several planned large developments in London. Our businesses also remain well positioned to win work in markets with positive long term growth trends including those which are driving the green energy transition.
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