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Severfield (LSE: SFR)

Last close As at 02/07/2024

GBP0.74

▲ −2.20 (−2.90%)

Market capitalisation

GBP234m

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 | Update

Severfield — Poised for expansion

Industrials | Update

Severfield — Performing well with improving outlook

Industrials | Flash note

Severfield — Multiple positives should excite investors

Industrials | Update

Severfield — FY24 expectations unchanged, order book robust
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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)

22.3

Forecast gearing ratio (%)

10

Share Price Performance

Price Performance
% 1M 3M 12M
Actual 3.8 40.4 9.5
Relative 5.2 35.5 (1.1)
52 week high/low 77.6p/50.0p

Financials

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 introduce FY27 estimates. The 7.2x FY25e P/E is undemanding.

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 8.5 5.0
2024A 463.5 46.1 36.5 9.49 7.8 4.2
2025E 528.4 46.0 36.0 9.42 7.8 4.2
2026E 539.0 50.2 39.8 10.61 6.9 3.8

Research

Update

Industrials

Severfield — Performing well with improving outlook

Flash note

Industrials

Severfield — Multiple positives should excite investors

Industrials

Update

Severfield — Poised for expansion
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