22nd Nov 2016 09:01
LONDON (Alliance News) - Structural steel company Severfield PLC on Tuesday hiked its interim dividend and said it anticipates profit growth for its full financial year will be "comfortably" ahead of its expectations.
Severfield said it made a pretax profit of GBP7.4 million in its half-year to the end of September, more than double the GBP3.2 million recorded a year prior, due in part to lower one-off charges. Stripping out those exceptional items, however, adjusted pretax profit still rose 69% to GBP8.1 million from GBP4.8 million a year before.
Revenue rose to GBP118.2 million from GBP117.1 million, but this marginal growth was amplified on the bottom line by cost cutting which caused underlying operating margin to expand to 7.0% in the period from 4.3% a year before.
Severfield said it worked on 90 projects in the first half, including on commercial office developments, industrial and distribution facilities, stadia and transport. Its order book at November 1 was GBP315.0 million, up from GBP270.0 million at the start of June.
The group said it is confident profit growth will be well ahead of expectations for the full year to the end of March 2017 and, on that confidence, hiked its interim dividend 40% to 0.70 pence per share, from 0.50p a year before.
"I am delighted with our strong performance in the first half, which has continued since the period end. Margins are significantly up, our order book has continued to rise to a six year high whilst our pipeline remains steady," said Chief Executive Ian Lawson.
"We have a strong platform from which to implement our strategy, which targets to double our underlying profit before tax over the next four years, and continue to create value for our shareholders," he added.
Severfield shares were up 9.8% to 68.37p on Tuesday, one of the best performers in the FTSE All-Share.
By Sam Unsted; [email protected]; @SamUAtAlliance
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