Growth
Our aim is to capitalise on growth opportunities, both in the UK and Europe, and to maximise our market share.
Strategic priorities
Increase UK market share
Growing profitable market share in areas where the business already operates.
Enter new UK market sectors
Looking for new market areas where the business has not operated in the past, taking advantage of our existing capacity and capabilities.
Growth in Europe
Continue the momentum of recent contract successes in Europe, building strong, lasting relationships with European clients, to drive growth through our European business and our core business in the UK.
Achievements in 2023
Increased Group revenue by 22 per cent, despite some challenging market conditions during the year. This is more than double the revenue of £239m in 2016 when we started our strategic journey, reflecting the benefit of our significant market sector, geographical and client diversification.
Achieved an underlying1 profit before tax of £32.5m (2022: £27.1m), the first time since 2009 that the Group's profits have exceeded £30m. This result has been achieved despite inflationary headwinds, demonstrating the resilience of the Group's operations.
The high-quality UK and Europe order book at 1 June 2023 stands at £510m (1 November 2022: £464m). This reflects a balanced order book, containing a healthy mix of projects across our chosen sectors and leaves the Group well-positioned with a strong future workload.
Enhanced the Group's presence in Europe through the acquisition of VSCH which provides immediate access to new and growing market sectors to help accelerate our European growth strategy.
Continued to invest in organic modular growth, further developing our 'Severstor' and 'Rotoflo' product ranges in SPP and developing CMF's cold formed product ranges to serve an external client base, supported by the recent expansion of CMF's production operations in Wales.
Continued to embed the new divisional structure for our UK and Europe operations providing us with a better platform to fulfil our strategic growth aspirations.
1 See note 31 for APM definitions
Objectives for 2024
Continue to grow Group revenue, maintain our strong balance sheet and the quality of the order book to deliver sustainable growth.
In our core construction operations, increase our market share in existing market sectors where the Group already has specialist expertise (at good margins and with acceptable levels of risk). This includes some significant growth opportunities in the non-cyclical sectors of nuclear (new and decommissioning), bridges and rail electrification.
Continue to target projects in support of a low-carbon economy including battery plants, manufacturing facilities for renewables, new nuclear, rail electrification, HS2 and other energy efficient buildings, helping to drive the UK's economic recovery.
Grow the Severfield brand and develop our client base in Europe, supported by the growth opportunities (access to the high-growth electricity and distribution sector and capabilities in turnkey solutions) afforded by the VSCH acquisition.
In our modular solutions division, we are targeting a profitable result in 2024, mainly driven by higher margin growth opportunities for Severstor. We will also continue to develop the product offering and client base at CMF, taking advantage of the expanded capacity.
Leverage the new divisional structure to identify further selective acquisition opportunities, to further enhance the services we can offer.