Underlying pre-tax profit rose 11% to £27m in the year to March 2022 on revenue up by the same measure at £404m, driven mainly by the steep rise in steel prices.

Alan Dunsmore, chief executive officer, said: “The increase in profit also reflects our ability to offset inflationary cost increases through a combination of operating efficiencies, higher selling prices and contractual protection as steel remains largely a pass-through cost for the group.”

As a result underlying operating margins remained stable at 6.7%, slightly down from 7% previously.

He added: “Inflationary pressures remain present and are expected to continue into 2023, however we expect to be able to minimise the impact of these through the focused sourcing of materials through the supply chain and ongoing operational efficiencies.”

Dunsmore said that tendering activity in the UK and Europe remained strong, and had seen Severfield build a record UK and Europe order book of £486m, up from £393m.

Projects include the new stadium for Everton FC, a film studio, two large commercial office developments in London, and various large and several smaller industrial and distribution facilities in the UK, reflecting a sector which continues to remain buoyant.

Severfield has also secured several new HS2 bridge packages and other bridge awards reflecting investment in infrastructure by Highways England and Network Rail.

Following acquisitions and factory investments, the six mainly location-based businesses within the group have been re-organised into three market-focused divisions: Commercial & Industrial; Nuclear and Infrastructure; Products and Processing.

Dunsmore said: “We are delighted to be reporting a resilient and strong performance despite the ongoing market challenges.

“The group’s growth strategy is delivering a record order book with a broad diversity of sectors, geographies and clients, providing us with good earnings visibility through 2023 and beyond.

“Although inflation and supply chain pressures remain, we are managing these well and the earnings visibility gives us confidence in maintaining our positive performance expectations for 2023.”