By Keith Cooper
Both of the major steel specialists saw their earnings rise in their latest annual accounts, amid a continued recovery from Covid-19 and material cost inflation. However, pre-tax profit margins for the top 10 this year were flat at 4.1 percent.
Top-ranked Severfield (£88.2m to £491.8m) and J&D Pierce in second (up £108.4m to £195.3m), third ranked, William Hare, saw revenue fall by £54m. up to £165.2 million.
Seven companies reported double- or triple-digit percentage increases in revenue.
Pre-tax profits rose for nine of the top steel specialists, albeit marginally for Walter Watson (seventh) with a rise of 0.1 per cent. Despite its declining turnover, William Hare turned a loss into a small profit of £0.1m. Tenth-ranked Elland Steel, the only new entrant to the index, also returned to the black, with a pre-tax profit of £0.3m.
The only company to see profits fall was Bourne Group, in ninth place, with a drop of 87%. The company also reported a fall in turnover of £18.5m. In its most recent accounts, the company cites “challenging” market conditions due to the “residual impacts” of the Covid pandemic. Bourne also blames Russia’s full-scale invasion of Ukraine last February for affecting demand in its main markets and creating “significant inflationary pressures”.
Pre-tax margins improved at seven companies (most at Elland Steel with a 5.4% change) but narrowed at J&D Pierce, Walter Watson and Bourne Group. Overall, six companies posted increases in revenue, pre-tax profit and margin: Severfield, fourth BHC, Caunton (fifth), Billington (sixth), Taziker (eighth) and Elland Steel.
Leading the index, Severfield grew revenue by 22 per cent and pre-tax profit by 29.1 per cent in the year ending 26 March 2023. Chief executive Alan Dunsmore , attributes the growth to “our strategy to diversify the sectors, customers and geographies we serve”. He adds: “Many of our chosen markets continue to have a favorable outlook: the group has a prominent position in market sectors with strong potential for growth and our scale provides operational efficiency, which allows us to grow.”
Dunsmore admits market conditions are “difficult” as clients delayed projects to wait for the economy to stabilize. Tender activity in the distribution sector had also declined, he adds, but Dunsmore expects the acquisition of Netherlands-based Voortman Steel Construction, completed in April this year, to become “an improvement of earnings” in Severfield’s next set of accounts.
The chief executive of the British Constructional Steelwork Association, David Moore, says steel prices have been the main issue affecting its members’ finances. According to the British Stainless Steel Association, the price peaked at £970 per metric tonne between October 2022 and March 2023.
“They [prices] Now they’re off the boil and probably at the lowest level they can be, so they can only go in one direction,” Moore says. “Our members are quietly confident with the market. It looks flat for the next couple of years with the cutlery market for online retailers like Amazon by far the biggest market going forward.”
However, steel specialists are concerned about the government’s focus on infrastructure, including projects such as HS2, he adds.
| 2022 | 2021 | To change | company | Latest earnings (£millions) | Past revenue (£millions) | Change (£m) | Last profit before tax (£m) | Previous pre-tax profit (£m) | Final margin before tax (%) | Pre-tax margin (%) | Closing of the exercise |
| 1 | 1 | = | Severfield | 491.75 | 403.56 | 88.19 | 27.11 | 9:00 p.m | 5.5 | 5.2 | 03/26/2023 |
| 2 | 5 | 3 | J&D Pierce | 195.25 | 86.82 | 108.43 | 19.21 | 12.87 | 9.8 | 14.8 | 31/12/2022 |
| 3 | 2 | -1 | William Hare | 165.18 | 219.23 | -54.05 | 0.11 | -3.58 | 0.1 | -1.6 | 31/12/2022 |
| 4 | 3 | -1 | BHC | 128.00 h | 96.45 | 31.55 | 14.08 | 10.12 | 11.0 | 10.5 | 03/31/2023 |
| 5 | 4 | -1 | Caunton | 93.24 | 49.09 | 44.15 | 2.58 | 0.59 | 2.8 | 1.2 | 31/03/2021 |
| 6 | 6 | = | Billington | 86.61 | 82.72 | 3.89 | 1.10 | 0.18 | 1.3 | 0.2 | 31/12/2022 |
| 7 | 8 | -1 | Walter Watson | 75.95 | 65.82 | 10.13 | 9.08 | 9.07 | 12.0 | 13.8 | 12/31/2022 |
| 8 | 7 | -1 | Taziker | 73.48 | 55,76 | 17.72 | 5.14 | 2.74 | 7.0 | 4.9 | 03/31/2022 |
| 9 | 9 | = | Bourne Group | 44.36 | 62.88 | -18.52 | 0.26 | 2.06 | 0.6 | 3.3 | 31/10/2022 |
| 10 | N/A | NEW | Elland Steel | 35.19 | 29.82 | 5.37 | 0.28 | -1.36 | 0.8 | -4.6 | 30/06/2023 |
