Amid an unstable trading period, the UK steel industry shows resilience.
- Top 10 steel contractors note only a slight revenue fall of £11m.
- Severfield leads with an 11% revenue increase through diversification.
- Billington experiences a significant revenue drop due to large project delays.
- Taziker turns losses into profits, becoming the top 10’s newest entrant.
In the face of significant market turbulence, the UK’s primary structural steel firms have demonstrated noteworthy stability. Despite facing one of the most challenging trading periods, the aggregate revenue for the top ten steel contractors has decreased by only £11 million, reflecting a median decline of just five per cent. This performance highlights the resilience and strategic adaptability of these companies during uncertain times.
Severfield, the largest among the structural steel specialists, has achieved a remarkable revenue increase of 11 per cent, setting an example of growth amid adversity. The company’s strategy, focused on diversification across geographical locations, sectors, and clientele, has not only bolstered its revenue growth by approximately 30 per cent over three years but also helped it maintain resilience throughout the pandemic. Notable in this strategy was the acquisition of DAM Structures, expanding Severfield’s reach into temporary works and the high-demand HS2 projects.
Conversely, Billington, the third-largest specialist, has encountered a substantial revenue contraction, seeing more than a third wiped off its previous year’s income. This decrease is attributed primarily to the delay and cancellation of projects due to COVID-19, as well as a general reduction in activity. Despite the significant revenue drop, which led to the largest pre-tax margin fall from 5.7 per cent to 2.5 per cent among the top ten, Billington remained profitable, alongside all other leading firms.
Strikingly, among the top ten, six companies reported improved year-on-year results, with two firms returning to profit after experiencing losses previously. The most significant turnaround was seen with Taziker, which transformed a £288,000 loss into a £2.7 million profit. This improvement highlights the opportunities within sectors like infrastructure, utilities, energy, and defence, enabling Taziker to secure a £17.4 million increase in turnover, earning it a spot as the sole new entrant in the top ten.
As the construction industry regains momentum post-pandemic, the availability and pricing of materials such as steel have faced immense pressure, with steel prices soaring by 74.8 per cent in a year. Despite these challenges, the top steel specialists’ ability to remain profitable amidst skyrocketing material costs underscores their resilience and robust operational strategies. According to Severfield’s CEO, Dunsmore, while higher tender prices can be anticipated, margins are likely to remain tight due to the ongoing impact of increased steel prices.
The resilience of the UK’s top steel contractors amidst fluctuating markets is both commendable and indicative of strategic excellence.
