Last close As at 05/08/2026
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GBP111m
Research: Industrials
Severfield reported FY26 revenue up 1% y-o-y to £454.3m and underlying PBT down to £10.5m (FY25: £18.1m), in line with expectations. Underlying operating margin before joint ventures (JVs) fell to 2.8% from 4.8%, reflecting competitive pricing, delayed awards and weaker UK and European project mix. Statutory loss before tax was £39.9m after £50.3m of non-underlying items, mainly Modular Solutions closure costs, bridge-related costs and impairments. Cash was stronger: conversion was 145%, net debt fell £15.1m to £28.2m and leverage improved to 1.2x. No final dividend was proposed. FY27 guidance remains £12–15m underlying PBT, with broadly flat net debt targeted despite c £20m of non-underlying cash outflows, partly offset by a £10m contract advance received post-year end. Our estimates are currently under review.
| Year end | Revenue (£m) | PBT (£m) | EPS (p) | DPS (p) | P/E (x) | Yield (%) |
|---|---|---|---|---|---|---|
| 3/24 | 463.5 | 36.5 | 8.85 | 3.70 | 3.4 | 12.4 |
| 3/25 | 450.9 | 18.1 | 4.28 | 1.40 | 7.0 | 4.7 |
| 3/26 | 454.3 | 10.5 | 2.74 | 0.00 | 10.9 | N/A |
Core Construction revenue rose 2% to £442.5m, with Nuclear and Infrastructure up 45% to £124.3m, offsetting a 9% decline in Commercial and Industrial and the Modular Solutions wind-down. The UK and Europe order book increased to £507m from £429m in November 2025, with £339m scheduled for delivery over the next 12 months. This improves visibility, but FY27 remains a transition year as lower-margin work rolls through, with larger, higher-value projects expected to commence in H2. Liquidity headroom of £39.3m and post year-end banking facilities to 2029 provide flexibility, but cash discipline remains the near-term priority.
The refreshed strategy is a response to recent margin compression and the need to improve returns, rather than pursuing volume. Severfield is shifting towards higher-quality, cash-generative revenue, underpinned by stricter project selection, a greater weighting to more resilient and counter-cyclical sectors, deeper client relationships and earlier project involvement through pre-construction service agreements. The group is evolving from a fabrication-led model to an integrated offer across design and engineering, manufacturing, delivery and project management, using partnerships to improve scalability, reduce capital intensity and support margins. Medium-term ambitions are c £500–550m revenue, a 7–8% operating margin, £40–50m underlying PBT including £10m from the India JV, ROCE above 15%, cash conversion above 90%, leverage of 1.0–1.5x and a sustainable dividend.
India remains the clearest growth driver in the medium-term plan. JSSL delivered record FY26 output of 125kt and revenue of £154.8m, EBITDA of £14.0m, operating profit of £11.5m and PBT of £7.8m. Severfield recognised a £3.0m share of PAT (£0.1m in FY25), while the order book increased to £344m. Management described the JV as reaching a tipping point, supported by c 8% Indian GDP growth, urbanisation, infrastructure investment and an increasing demand for commercial buildings, data centres, advanced manufacturing and transport infrastructure. Structural steel penetration remains low but steel offers speed, quality and execution certainty, which is relevant in a market used to high growth and short delivery timelines. Capacity is also scaling, with Bellary at 114kt, Gujarat expected to reach 150kt by FY29 and a further 150kt potential from subcontracting.
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Research: Investment Companies
Worldwide Healthcare Trust (WWH) delivered meaningful outperformance in FY26, with NAV and share price total returns of 10.0% and 13.1%, respectively, well ahead of the benchmark’s 1.8% return. This marked a return to form after a difficult FY25, despite healthcare stocks remaining under pressure for much of the year due to US drug pricing and tariff uncertainty. Co-managers Sven Borho and Trevor Polischuk, at global healthcare specialist OrbiMed, attribute the recovery to the trust’s continued focus on innovation and growth, particularly through biotechnology and the proprietary Biotech M&A Basket, which returned 55.9% in sterling terms and contributed 5.6pp to FY26 total return. Since launch in April 1995 to the end of FY26, WWH has generated average annual NAV total returns of 13.3%, compared with 11.0% for the benchmark. The managers believe the sector backdrop has improved following greater US policy clarity, while attractive biotech valuations, high levels of innovation and large pharma’s patent cliff should continue to support M&A activity.