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Severfield

LN: SFR

£213.5m market cap

69.8p last close

Severfield is a leading UK structural steelwork fabricator operating across a broad range of market sectors. An Indian facility currently undertakes structural steelwork projects for the local market and is fully operational.

Investment summary

An AGM update confirmed much of the year-end messaging and management expectations for FY20 are unchanged. Order book positions in the UK and India remain encouraging and there have been no discernible changes in pipeline opportunities. The earnings outlook appears solid and the 8.4x P/E and 4.9% prospective yield have appeal.

Y/E Mar
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2018A 274.2 29.0 24.0 6.5 10.7 9.1
2019A 274.9 29.0 25.2 6.8 10.3 11.8
2020E 285.9 32.4 27.3 7.4 9.4 7.8
2021E 292.5 33.6 28.1 7.6 9.2 7.6
Last updated on 16/09/2019
Industry outlook

The primary strategic aim is to maintain Severfield’s position as the leading UK structural steelwork supplier. An Indian JV (established in 2010) is fully operational and targeting similar sectors to those served in the UK. Management has valued the Indian construction market at c £100bn pa, with a very low penetration of steel structures currently and the JV is in the process of expanding capacity.

Last updated on 16/09/2019
Sector
Industrials
Share price graph
Balance sheet
Forecast net cash (£m) 29.9
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual 12.6 (3.1) (8.9)
Relative* 8.8 (3.5) (8.7)
52-week high/low 77.0p/61.0p
*% relative to local index
Key management
John Dodds Chairman
Alan Dunsmore CEO

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