Search Trigger

Well-placed to win work in the diverse range of market sectors and geographies in which we operate. Our purpose is to develop better ways to build, for a world of changing demands and as the UK's largest specialist structural steelwork group, our balanced business model with market sector, geographical and client diversity provides the platform to further grow our market share in our chosen sectors.

Favourable Market Trends

Market output for structural steelwork in the UK:

894,000

Tonnes1

(2022: 803,000 tonnes)

Group production:

115,000

Tonnes

(2022:105,000 tonnes)

Group potential capacity2:

150,000

Tonnes

(2022: 130,000 tonnes)

UK and Europe order book at 1 June 2023

£510m

(£464m at 1 November 2022)

1 As measured by the British Constructional Steelwork Association (‘BCSA’).

2 Including 20,000 tonnes for VSCH acquired in April 2023

Favourable market trends

Steel continues to be overwhelmingly the structural framing material of choice. The total UK consumption of constructional steel in calendar year 2022 was 894,000 tonnes, an increase of 11 per cent on 2021, and back in line with historic pre-pandemic levels. The UK market overall is expected to remain broadly at this level over the coming years. Growth in the power and energy sector, to meet increasing demands as we move towards a greener future, is offset by a reduction in demand for industrial buildings, driven mainly by distribution warehouses.

As the world's population grows, there is an increased need to invest in new and greater infrastructure to support the population and economic growth. This combined with the UK Government's commitment to reach Net Zero by 2050 will drive demand for new green energy infrastructure, including nuclear energy, battery plants, wind farms and the construction of better public transport infrastructure. The long-term trends in the UK and European construction market remain positive with strong underlying market drivers, providing the Group with significant opportunities for growth.

Sustainable steel for the future

All construction materials have some environmental impact and when assessing sustainability, it is important to measure all of steel's impacts, including the atmosphere, the environment, means of disposal, and durability.

Decarbonisation of the steel industry is an important part of reaching the Government's target to achieve Net Zero greenhouse gas emissions in the UK by 2050.

Steel manufacturing continues to improve its energy use and levels of greenhouse gas emissions and steel products exhibit a decisive life cycle advantage versus many other construction materials (including concrete) since they can continually be recycled. Steel structures can last for many years, making them cost-effective as well as sustainable and since steel is often fabricated off-site, it can reduce on-site labour, cycle time and construction waste. In addition, it is also recognised that steel is an important part of a low-carbon economy, being needed to make wind turbines, electric vehicles, energy efficient products and infrastructure.

Performance in 2023

The Group's potential production capability is approximately 150,000 tonnes, this includes 20,000 tonnes relating to the newly acquired Voortman Steel Construction Holding. The Group's output was approximately 115,000 tonnes (excluding VSCH) in the year.

In 2023, Group revenue of £491.8m represented a 22 per cent increase, reinforcing our market-leading position and the continued delivery of our strategic objectives. This strong performance has been achieved despite the continued challenging macroeconomic conditions and uncertainty and supply chain disruptions caused by the conflict in Ukraine.

Outlook

In 2023, we increased our market share in the stadia and leisure sector, as a result of large projects such as Everton F.C., Co-op Live and Excel arena, and maintained our strong market positions in other sectors such as industrial, transport and other, which includes data centres.

We continue to be encouraged by the current level of tendering and pipeline activity across the Group, seeing some significant opportunities both in the UK and in continental Europe, supported by the acquisition of VSCH. These include data centres, stadia and leisure projects, commercial offices, film studios and projects in support of a low-carbon economy such as battery plants, energy efficient buildings and manufacturing facilities for renewable energy.

In the UK and EU, we are seeing a new wave of opportunities for battery gigafactories to support domestic zero carbon vehicle production, with a number of facilities currently being planned or considered. Furthermore, the UK's emergence as a major hub for film, television, advertising and gaming production is also leading to an increase in demand for film and TV studios, and demand for data centres in the UK and EU is expected to continue, fuelled by cloud computing, smart phones and artificial intelligence, together with the continued post-pandemic trend for remote working. The Group's manufacturing scale, speed of construction and on-time delivery capabilities, leaves us well-positioned to win work from such projects, all of which are likely to be designed in steel.

As part of the Autumn Statement in November 2022, the UK Government reconfirmed its commitment to deliver major infrastructure projects, highlighting investment in infrastructure and sustainability, as central to boosting growth and productivity. Despite the expected delays to some aspects of the Road Investment Strategy and HS2, which the Government confirmed in March 2023, the Autumn Statement reaffirmed its commitment to deliver Sizewell C, HS2 to Manchester and core Northern Powerhouse rail links as set out in the £650 billion National Infrastructure Strategy (NIS) from 2020.

The Group is well-placed to meet this demand for ongoing state-backed investment, including a growing focus on infrastructure which can mitigate the impacts of climate change and deliver energy security. These requirements dictate a significant transition in national energy infrastructure including renewable electricity generation and storage, nuclear power (including small modular reactors ('SMRs')) and several other new energy supply initiatives. We have already secured some significant road and rail bridge awards, new nuclear and rail electrification work and we continue to make good progress with several other similar opportunities in the pipeline. In general, we remain well-positioned to win work in the transport, nuclear and power and energy sectors sector given our in-house expertise and unmatched scale and capability to deliver major infrastructure projects, together with the high entry barriers for competitors.

We also see good opportunities in the modular sector, including steel sub-assemblies and systems for factory-built houses, temporary buildings, and temporary accommodation. These opportunities are being driven by the market growth in the supply of modular homes and modular buildings for education and healthcare.

In April 2023 we completed the acquisition of VSCH, which provides us with a manufacturing base in Europe to complement our existing European business and will help accelerate our European growth strategy. The continued successful implementation of our overall strategy means that the Group has significant market sector, geographical and client diversification.

Order Book

The high-quality UK and Europe order book at 1 June stands at £510m (1 November 2022: £464m), including £25m for VSCH, of which £375m is planned for delivery over the next 12 months. The order book remains well-diversified and contains a good mix of projects across the Group's key market sectors. This provides us with good earnings visibility for the 2024 financial year and beyond.

In terms of geographical spread of the order book of £510m, 90 per cent represents projects in the UK, with the remaining 10 per cent representing projects for delivery in Europe and the Republic of Ireland (1 November 2022: 95 per cent in the UK, 5 per cent in Europe and the Republic of Ireland).