CN Specialists Index 2023: top 10 steel contractors

By Keith Cooper

All bar two of the leading steel specialists saw their revenues surge in their latest annual accounts, amid a continuing recovery from Covid-19 and material-cost inflation. However, pre-tax profit margins for this year’s top 10 were static at 4.1 per cent.

Big turnover boosts were recorded by top-placed Severfield (up by £88.2m to £491.8m) and J&D Pierce in second (a £108.4m increase to £195.3m), although third-placed William Hare saw revenue fall by £54m to £165.2m.

Seven firms reported double- or triple-digit percentage increases in revenue.

Pre-tax profits were up for nine of the top steel specialists, albeit marginally in the case of Walter Watson (seventh) with a 0.1 per cent increase. Despite its declining turnover, William Hare turned a loss into a tiny profit of £0.1m. Tenth-placed Elland Steel – the only new entrant in the index – moved back into the black too, with a £0.3m pre-tax profit.

The only firm to see a fall in profit was Bourne Group in ninth place, with an 87 per cent drop. The company also posted an £18.5m fall in turnover. In its most recent accounts, the firm cites “challenging” market conditions due to “residual impacts” from the Covid pandemic. Bourne also blames the full-scale Russian invasion of Ukraine last February for hitting demand in its principal markets and creating “significant inflationary pressures”.

Pre-tax margins improved in seven firms (most broadly at Elland Steel with a 5.4 per cent change), but they narrowed at J&D Pierce, Walter Watson and Bourne Group. Overall, six firms reported increases in revenue, pre-tax profit and margin: Severfield, fourth-placed BHC, Caunton (fifth), Billington (sixth), Taziker (eighth) and Elland Steel.

Sitting at the top of the index, Severfield boosted its revenue by 22 per cent and pre-tax profit by 29.1 per cent in the year ending 26 March 2023. Chief executive Alan Dunsmore attributes the growth to “our strategy to diversify the sectors, clients and geographies we serve”. He adds: “Many of our chosen markets continue to have a favourable outlook – the group has a prominent position in market sectors with strong growth potential and our scale provides operational efficiency, enabling us to grow.”

Dunsmore admits to “challenging” market conditions, as clients delayed projects to wait for economy stability. Tendering activity in the distribution sector had also declined, he adds, but Dunsmore expects the acquisition of Netherlands-based Voortman Steel Construction, completed in April this year, to become “earnings enhancing” in Severfield’s next set of accounts.

British Constructional Steelwork Association chief executive David Moore says steel prices have been the main issue hitting its members’ finances. According to the British Stainless Steel Association, the price hit a peak of £970 per metric tonne between October 2022 and March 2023.

“They [prices] have now come off the boil and are probably at the lowest level they can be, so can only go in one direction,” Moore says. “Our members are quietly confident about the market. It looks flat for the next couple of years with the shed market for online retailers like Amazon by far the biggest market going forward.”

However, steel specialists are concerned about the government’s approach to infrastructure, including projects such as HS2, he adds.

2022 2021 Change Company Latest revenue (£m) Previous revenue (£m) Change (£m) Latest pre-tax profit (£m) Previous pre-tax profit (£m) Latest pre-tax margin (%) Previous pre-tax margin (%) Financial Year Ending
1 1  = Severfield 491.75 403.56 88.19 27.11 21.00 5.5 5.2 26/03/2023
2 5 3 J&D Pierce 195.25 86.82 108.43 19.21 12.87 9.8 14.8 31/12/2022
3 2 -1 William Hare 165.18 219.23 -54.05 0.11 -3.58 0.1 -1.6 31/12/2022
4 3 -1 BHC 128.00 96.45 31.55 14.08 10.12 11.0 10.5 31/03/2023
5 4 -1 Caunton 93.24 49.09 44.15 2.58 0.59 2.8 1.2 31/03/2021
6 6  = Billington 86.61 82.72 3.89 1.10 0.18 1.3 0.2 31/12/2022
7 8 -1 Walter Watson 75.95 65.82 10.13 9.08 9.07 12.0 13.8 31/12/2022
8 7 -1 Taziker 73.48 55.76 17.72 5.14 2.74 7.0 4.9 31/03/2022
9 9  = Bourne Group 44.36 62.88 -18.52 0.26 2.06 0.6 3.3 31/10/2022
10 N/A NEW Elland Steel 35.19 29.82 5.37 0.28 -1.36 0.8 -4.6 30/06/2023
Notes: J&D Pierce Latest accounts for a 17-month period. Caunton and Taziker No new accounts since last edition.

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