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.
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Adam Semple
CFO
Alan Dunsmore
CEO
Forecast net debt (£m)
22.3
Forecast gearing ratio (%)
10
% | 1M | 3M | 12M |
---|---|---|---|
Actual | (1.5) | (1.7) | 27.2 |
Relative | (2.3) | (1.8) | 16.2 |
52 week high/low | 83.8p/50.0p |
The highlight of Severfield’s FY24 results was the 14% increase in underlying operating profit despite declining revenue. This gives a clue to the increasing quality of earnings as the company captures future projects and benefits from its internal digitalisation programme, Project Horizon. Furthermore, the Indian JV rapidly improved profit and is expanding capacity to meet growing demand. The balance sheet offers scope for both the £10m share buyback and potential M&A. Our forecasts are unchanged, and we have introduced FY27 estimates. The FY24 AGM statement confirmed trends.
Y/E Mar | Revenue (£m) | EBITDA (£m) | PBT (£m) | EPS (fd) (p) | P/E (x) | P/CF (x) |
---|---|---|---|---|---|---|
2023A | 491.8 | 40.4 | 32.5 | 8.61 | 9.2 | 5.4 |
2024A | 463.5 | 46.1 | 36.5 | 9.49 | 8.4 | 4.5 |
2025E | 528.4 | 46.0 | 36.0 | 9.42 | 8.4 | 4.5 |
2026E | 539.0 | 50.2 | 39.8 | 10.61 | 7.5 | 4.1 |