Severfield (LSE: SFR)

Last close As at 23/05/2024

GBP0.71

−1.00 (−1.38%)

Market capitalisation

GBP221m

Severfield is the market-leading UK structural steelwork fabricator operating across a broad range of market sectors. An Indian facility undertakes structural steelwork projects for the local market in a joint venture with India’s largest steel producer, JSW Steel.

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

Latest Insights

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Industrials | Flash note

Severfield — Multiple positives should excite investors

Industrials | Update

Severfield — FY24 expectations unchanged, order book robust

Industrials | Update

Severfield — FY24 in line, but risks edge up further on

Industrials | Update

Severfield — FY23 results highlight progress and strength

Sector

Industrials

Equity Analyst

Andy Murphy

Andy Murphy

Director, Financials & Industrials

Key Management

  • Adam Semple

    CFO

  • Alan Dunsmore

    CEO

Balance Sheet

Forecast net debt (£m)

30.1

Forecast gearing ratio (%)

13

Share Price Performance

Price Performance
% 1M 3M 12M
Actual 3.8 32.2 10.5
Relative 0.0 22.3 2.9
52 week high/low 75.0p/50.0p

Financials

Severfield’s trading update indicates that FY23 results are expected to slightly exceed market expectations and Severfield ends the year with a record UK and Europe order book. Furthermore, with a positive trading outlook and net debt coming in lower than expected, the company has announced a £10m share buyback, highlighting the cash-generative nature of the company and management’s confidence in its position. The stock trades on an FY25 P/E of less than 6x and yields 7%, which we believe appears compelling.

Y/E Mar Revenue (£m) EBITDA (£m) PBT (£m) EPS (p) P/E (x) P/CF (x)
2022A 403.6 33.4 27.1 7.00 10.2 5.4
2023A 491.8 40.4 32.5 8.61 8.3 4.9
2024E 482.9 45.0 35.2 8.73 8.2 4.3
2025E 550.5 47.5 37.5 9.28 7.7 4.1

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