LIBERUM: Severfield: Strong growth prospects

LIBERUM: Severfield: Revenues lower but margins better

PROGRESSIVE: Severfield: Guidance reiterated after H1 profits increase

Severfield has reiterated its FY24E guidance after delivering a 17% increase in underlying PBT despite ‘challenging’ market conditions. We retain our profitability and cash flow estimates for FY24E and FY25E, with higher margin assumptions offsetting lower revenue projections. In our view, the long-term outlook continues to be underpinned by new markets, such as datacentres and nuclear work – plus a recent revival in London office work – with further growth likely from the group’s expansion in t

LIBERUM: HS2: Exploring the scenarios

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

Severfield’s AGM statement highlights 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 7x remains comfortably below the long-term average of 10.0x, implying that some ri

PROGRESSIVE: Severfield: FY outlook on track amid ‘positive’ markets

We are maintaining our forecasts for FY24E and beyond after this morning’s AGM statement from Severfield, which confirms that trading in the first five months has been in line with the group’s expectations, aided by its strong balance sheet. This is despite more challenging conditions in recent months due to building cost inflation, while the long-term outlook continues to be underpinned by new markets, such as datacentres and ‘giga-factories’, and the group’s expansion in the EU and India.

LIBERUM: Severfield: Strength in India

LIBERUM: Severfield: Multiple levers for earnings growth

Severfield - FY23 results highlight progress and strength

FY23 results highlight that we believe revenue quality remains materially underappreciated by the market (see our June update note), especially now the UK and EU are embarking on huge investment programmes to renew and upgrade infrastructure. In our view, the outlook in the UK, continental Europe, especially post recent M&A, and India is not fully reflected in the FY24e P/E rating of c 7.5x, which is comfortably below the long-term average of 10.0x. Our positive stance is supported by the compan

PROGRESSIVE: Severfield: FY23 margins and cash beat expectations

Severfield’s adjusted PBT for the year to 25 March 2023 rose by 20%, beating our estimate by 4.1%, and there was significantly stronger cashflow. For now, we maintain our estimates. However, as discussed in our April note, the Project Horizon digitisation and other initiatives, plus growth potential in Europe and India, suggest upside to our FY25E forecasts. We also argue that greater revenue transparency offers the potential for a re-rating.

LIBERUM: Severfield: India gains momentum

Severfield - Revenue visibility and growth underappreciated

The quality of Severfield’s revenues is materially underappreciated by the market in our view, especially now that the UK and EU are embarking on huge investment programmes to renew and upgrade infrastructure to address global trends, such as the drive for net zero emissions. The reorganisation of the group, the internal improvement project (Project Horizon) and the EPS-enhancing M&A deal are not fully reflected in the FY24e P/E rating of c 7.0x, which is comfortably below the long-term average

PROGRESSIVE: Severfield: Structurally re-engineered to face new horizons

Severfield’s new divisional structure and Project Horizon operational improvement programme, outlined at the recent Capital Markets Day, better focuses the UK’s leading construction steel specialist on growth markets, in our view. These initiatives, and the opportunity for further expansion in Europe and India, could imply upside to our FY25E estimates and improved growth beyond that. We also believe that greater revenue transparency could suggest the potential for a re-rating.

LIBERUM: Severfield* - Site visit to Lords highlights growth prospects

PROGRESSIVE: Severfield - Outlook confirmed ahead of investor teach-in

Severfield, the UK’s leading structural steel specialist, has signalled ahead of today’s Capital Markets Event that a strong second-half performance confirms that FY23 results should be in line with its previous expectations. The acquisition of Dutch fabricator Voortman Steel Construction Holding (VSCH), announced on 15 March, also prompted us to increase estimates for the following two years (see note). Today’s event will include a focus on opportunities in Europe, while the Indian JV continues

LIBERUM: Flowtech Fluidpower: New CEO's growth plan now in motion

Treatt - Return to growth in FY23

Treatt’s FY23 results show a significantly improved y-o-y operating performance, delivering revenue and profit growth alongside record cash generation. Sales in H223 were affected by the destocking of inventory from clients, although management notes early signs of this reversing. Particularly strong growth came from Treatt’s new markets segment (Coffee, China and Treattzest), up 61% y-o-y. Record cash generation resulted in net debt more than halving to £10.4m. Management is focusing on volume

Hybridan Small Cap Feast - 30 Oct 23

30th October 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment obje

Hybridan Small Cap Feast - 01/12/23

1st December 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment obje

IO#9 within target production range

Renold - Strong interim results – FY24 EPS upgrade of 9.3%

The group has seen a very strong H1 performance, with decent momentum in Chain markets but driven by the strong increase in output in Cardiff in the TT division. Margins in particular saw a strong improvement with both divisions generating ROS of 16%. Order intake has continued to see some softer conditions, with ordering patterns normalising, although this results in a lower order book, particularly in Europe. On strong H1 results management expect FY24 to be ahead of expectations. We upgrade F

Brickability Group - A diversified and resilient model

Today’s interims are in line with the recent trading update (11th October) and as such we make no changes to forecasts. Revenue of £324.8m represents a LFL decline of 14%, with EBITDA of £25.6m (H123: £25.5m). This is a strong performance, against what is a challenging market backdrop and underlines the benefits of its diversified operating model and focused strategy. We therefore continue to be surprised at the weakness of the share price, especially in the context of a broader peer group. Putt

TClarke - £1.1bn order book and delivery protection measures

TClarke has confirmed it is on track to deliver its three-year growth-plan target of £500m of revenues in 2023E (up from £426m in 2022). It detailed a 99% increase in the order book to £1.1bn alongside a further £1bn in opportunities. Reflecting the current challenges in the construction sector, management has made a number of strategic decisions to preserve the business’s strong market and financial position. These include changing some supply-chain partners mid-contract to protect project comp