More than 100 jobs could be shed by Severfield amid a decline in business confidence.
In a trading update today, Severfield said that projects were “not being awarded or progressing within normal timescales”.
Following a review of staffing levels, the board has decided to reduce the headcount by 6% through a combination of redundancies and leaving vacancies empty. Severfield has approximately 1,800 employees, so 6% implies more than 100 positions to go.
Severfield said that the UK and Europe order book remained solid, at £440m as of 1st April (1st February: £403m), of which £327m is for delivery over the next 12 months.
The board said that, when the 2024 results are published in due course, they will show underlying profit before tax to be in the range of £18m to £20m.
Severfield admitted last year that it was having to repair the welds on 14 bridges that it had made for HS2 and National Highways.
“The bridge remedial works programme is progressing as expected,” Severfield said today, “and, whilst the balance of cost and associated recoveries continues to evolve over time, our overall view of testing and remedial costs net of insurance proceeds is broadly unchanged, at an estimated non-underlying net cost of c.£20m.
“The group has incurred testing and remedial cash costs of c.£18m in FY25 and the remaining cash costs are expected to be incurred in FY26 and FY27. Discussions with the group’s professional indemnity (PI) insurers have made good progress and they have now confirmed coverage. The insurers have also indicated that they will make an interim payment by mid-June, following the completion of a quantum verification exercise with their loss adjusters.”