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 was expanded in FY20.
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Severfield’s in-line year-end update inferred that it generated two thirds of our estimated UK EBIT in H2, successfully delivering orders won in the previous 18 months or so. Notwithstanding input cost inflation, absolute levels of profitability seem to have remained robust. Severfield’s Indian JV (JSSL) has also hit management expectations, including further profitable trading in H2. The UK and India both ended FY22 with record order books reflecting inflationary effects to some extent but the underlying order intake has clearly been healthy. We raised our revenue expectations by c 6% for FY22 and by over 10% for the following two years, leaving EBIT estimates and will revisit margin development when the FY22 results are announced on 15 June.
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 | 8.0 | 6.8 |
| 2021A | 363.3 | 30.9 | 24.3 | 6.43 | 9.6 | 6.4 |
| 2022E | 396.2 | 35.2 | 27.8 | 7.38 | 8.4 | 29.4 |
| 2023E | 422.3 | 38.8 | 31.3 | 8.29 | 7.5 | 5.7 |
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 23/06/2022Content on Severfield
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Industrials
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Share price graph
Balance sheet |
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| Forecast net debt (£m) | 18.7 |
| Forecast gearing ratio (%) | 9 |
Price performance
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Key management |
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| Alan Dunsmore | CEO |
| Adam Semple | CFO |