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)
30.1
Forecast gearing ratio (%)
13
% | 1M | 3M | 12M |
---|---|---|---|
Actual | 1.9 | (14.3) | (12.8) |
Relative | (1.3) | (16.5) | (18.5) |
52 week high/low | 75.0p/50.0p |
Severfield’s interim results highlighted that FY24 is expected be in line with management expectations and that the quality of the orderbooks – both in the UK and Europe, and India – remains a key support for the future. That said, the outlook for the UK and continental Europe is less robust in the short term than it was, due to the impact of high inflation and the rising interest rate cycle. The FY24e P/E rating of c 6.1x remains comfortably below the long-term average of 10x, implying that some risk is discounted in the rating. The stock yields more than 5%.
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 | 8.3 | 4.4 |
2023A | 491.8 | 40.4 | 32.5 | 8.61 | 6.7 | 3.9 |
2024E | 482.9 | 45.0 | 35.2 | 8.73 | 6.6 | 3.5 |
2025E | 550.5 | 47.5 | 37.5 | 9.28 | 6.2 | 3.3 |