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Severfield

LN: SFR

Market Cap£207.9m

Last Close 67.2p

Severfield is a leading UK structural steelwork fabricator operating across a broad range of market sectors. An Indian facility undertakes structural steelwork projects for the local market and and was expanded in FY20.

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Investment summary

Severfield’s H121 revenues were up 5% with EBIT ahead c 7% and an improved contribution from JV/associates also. The company declared a DPS uplift of 9% y-o-y for the period. UK/Ireland operations hold a record and balanced £393m order book position boosted by significant wins in the stadia/leisure and transport subsectors, which provides excellent visibility for the remainder of this year and well into FY23. The Indian JV returned to profitability in the first half driven by a recovery in activity from FY21 levels and at the same time managed to sustain its £140m order book. Management’s expectation for a strong H2 and full year for the group are unchanged. Our estimates are under review.

Y/E Mar
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2020A 327.4 33.2 28.6 7.75 8.7 7.3
2021A 363.3 30.9 24.3 6.43 10.5 6.9
2022E 373.9 35.2 27.8 7.38 9.1 12.6
2023E 373.1 38.8 31.3 8.29 8.1 6.2
Industry outlook

The primary strategic aim is to maintain Severfield’s position as the leading UK structural steelwork supplier. The Indian JV targets 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.

Last updated on 18/01/2022
Content on Severfield
Severfield – Order book development shows the way
Industrials | Update | 1 December 2021
Severfield – Positive start to FY22
Industrials | Outlook | 10 September 2021
Severfield – Solid end to FY21
Industrials | Update | 27 April 2021
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Share price graph
Balance sheet
Forecast net debt (£m) 8.8
Forecast gearing ratio (%) 4
Price performance
%
1m
3m
12m
Actual (1.2) (5.4) (6.7)
Relative* (4.2) (8.8) (16.8)
52-week high/low 82.6p/65.8p
*% relative to local index
Key management
Alan Dunsmore CEO
Adam Semple CFO