Announcing year-end profits nearly halved at £6.8m on static turnover of £267m, the firm said tough trading would see a further wave of businesses exit the market.
Tom Haughey, chief executive officer, said: “The UK economy remains lacklustre and the duration of the downturn is having a significant impact upon the durability of our industry competitors, several of whom exited the sector in 2011.
“Given the uncertain economic outlook, the UK market is likely to remain extremely challenging.
“It is likely that more companies in our sector will exit their positions as pressures remain on their volumes, costs and cash. Overall however we believe that it is unlikely that the balance of supply and demand in the UK will worsen.”
Stiff competition for work lowered operating margins from 6.2% to 5.3%.
Despite this Severfield expects to exploit its size to secure big orders from the transport, energy and industrial sectors which are showing more promising order pipelines.
“Encouragingly our UK businesses entered 2012 with a strong order book of good quality contracts having now successfully executed all of our Olympic related work.”
The order book stands at £221m in line with last year with good prospect opportunities worth £510m.
Severfield’s Indian joint venture contributed a £2.5m loss for the year. Strong foundations have now been established for the future and a positive contribution is expected in 2012.