17th Jun 2015 08:44
LONDON (Alliance News) - Structural steel group Severfield PLC Wednesday narrowed its pretax loss in its recently ended financial year as it focused on improving its operating margin, and proposed the reintroduction of its final dividend.
For the year to end-March, the company reported a pretax loss of GBP191,000, narrowed from a pretax loss of GBP4.1 million a year before, despite revenue declining to GBP201.5 million from GBP231.3 million, as a result of lower operating costs.
Severfield saw exceptional costs of GBP8.5 million during the year, including costs related to replacing bolts at the Leadenhall building - widely known as the Cheesegrater - in the City of London.
The company said the reduction in its revenue was a direct result of its focus on recovering its operating margin instead of growing revenue. This meant the company shifted away from winning work with "uneconomic rates". It said that this, combined with improved operating processes, led to an increase in operating margin to 4.5% from 3.3% the year before.
Severfield said it is on track to meet its targeted 5-6% operating margin target for its current financial year.
It is proposing to reintroduce a final dividend of 0.5 pence.
"We are very pleased with the continued good progress made across the business, both in the UK and India, operationally and financially. 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," said Chief Executive Officer Ian Lawson in a statement.
"The group is well placed for the future, and the board is confident that we will be able to maintain improved shareholder returns," Lawson added.
Shares in Severfield are trading up 3.0% at 69.80 pence Wednesday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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