Chief executive Alan Dunsmore said Severfield also continued to manage steel price rises and challenges over the availability of certain product lines.

He said: “Steel remains largely a pass-through cost for the group, albeit the recent steel price increases are likely to impact working capital in the short term.

“In response to the current market conditions and the associated supply chain pressures, we remain in regular contact with our customers and our major supply chain partners and, for steel, we benefit from relationships with a number of partners in the UK and continental Europe, reducing the risk of interruptions to the group’s steel supply.

“We have also experienced some challenges with the restricted supply of cold rolled steel over the past 12 months, which we continue to manage by forward purchasing as appropriate.”

The firm said tendering and pipeline activity in the UK and Europe remained very encouraging, albeit at tighter prices given current market conditions.

He added Severfield’s order book of £301m contained a healthy mix of projects across a range of sectors, including industrial and distribution, stadia and leisure, nuclear, transport infrastructure and commercial offices.

In the year to March, Sevefield this morning reported resilient results, with revenue up 11% at £363m due to a £20m increase in order flow and a first full-year contribution from its Harry Peers acquisition.

Pre-tax profits dropped 18% to £21m, with operating margin slipping from 8.2% to 7%.

Dunsmore said margin had recovered well in the second half and he expected next year’s operating margin to return to the normal range of 8 to 10%

He said: “The Group has coped well with the challenges presented by the Covid-19 pandemic and has delivered a resilient set of results for 2021, reflecting the benefit of the strategic and operational progress made over recent years.”