Severfield provided a pretty robust year-to-date trading update to coincide with its AGM, including a stronger UK order book position and, in our view, firmer pipeline sentiment than previously. The company’s broad sector capability is serving it well and input cost challenges appear to being managed effectively. Severfield’s share price has traded in a narrow range in recent months and its P/E dips below 10x next year on our slightly updated estimates.
Companies: Severfield Plc
Britain’s leading structural steel specialist has highlighted in today’s AGM statement continuing positive trading in the first five months of FY2022E, in line with its expectations and we are maintaining all our estimates. Future prospects are supported by a new record high order book for the UK and Europe and an improving outlook for the Indian JV. The orders indicate healthy demand across a broad range of sectors including infrastructure and logistics, while the Group has announced a signific
Britain’s leading structural steel specialist slightly beat our previously increased estimates for FY2021, with adjusted PBT of £24.3m in today’s results, against our estimate of £24.0m. “Considerable positive momentum” has continued into FY2022E, with an increased order book in both UK & Europe and also in the Indian JV, despite the second wave hitting the subcontinent. We are not changing our FY2022E estimates, being early in the financial year, but continue to believe the Group is strongly pl
Severfield’s FY21 year-end trading update led management to raise its full year guidance following a solid UK performance in H2. Order books remain firm and the company has ended FY21 with a modest net cash position.
We have raised our PBT estimates for FY2021E - 2023E after Britain’s leading structural steel specialist this morning guided that results for FY2021E will be “comfortably above previous expectations”. Orders have risen by 10% since November, net cash was better than we expected and the Group is “very encouraged” by the pipeline of new work opportunities in the UK and Europe, while conditions in the Indian JV have remained robust so far in the face of the pandemic. The Group has also pledged to c
As the end of FY21 approaches, Severfield is deepening its structural steelwork capabilities with the acquisition of DAM Structures. The strategic fit is sound and the deal enhances full-year earnings by c 7% on our estimates. We now expect Severfield to end FY21 in a modest net debt position.
Britain’s leading structural steel specialist has acquired specialist fabricator DAM Structures for £12m and up to £15m in deferred and contingent considerations. This should take Severfield further up the value chain in major infrastructure programmes such as HS2 and rail electrification over the next decade and Severfield expects it to become earnings-accretive in FY 2022E. We raise adj EPS estimates for FY 2022E and 2023E by 6.2% and 5.6% respectively and expect the Group to remain in net cas
COVID-19 market disruption has dented FY21 profitability, but we still expect Severfield to end the year by maintaining dividend levels and with a good net cash position. Consequently, with an optimistic view of pipeline opportunities, it remains well positioned to secure business in core market sectors and deliver a steady earnings recovery by FY23.
Severfield’s diverse range of end-markets supported a 40% increase in sales despite “challenging” conditions for Britain’s leading structural steel specialist in its first half results. Profitability and net cash also improved, with the Group predicting a further increase in profit in the second half. We have reinstated our forecasts, which initially assume the Group returning to peak earnings over a three-year horizon, boosted by further growth in Europe and recovery in the Indian JV.
Site activity regaining pre-lockdown levels and a maintained UK/Europe order book were the key operational messages in Severfield’s AGM update. Market conditions mean that recovery within the Indian JV has been more constrained. The payment of an unchanged 1.8p final dividend for FY20 (as announced on 30 July) was approved and management stated that it is cautiously optimistic regarding the FY21 outlook. We plan to reinstate estimates with the H121 results expected in November.
The UK’s largest structural steel construction specialist has reinstated the final dividend for FY 2020 following “encouraging” activity levels since the lockdown was lifted. This morning’s AGM statement confirms that the group remains cash-positive and that the order book has remained steady over the summer. We continue to believe the Group is likely to benefit from growth in logistics and datacentres, reinforced since Covid-19, as well as the significant opportunities from HS2, which we explor
A strong second-half performance in the UK (plus an acquisition) and good progress in India (including capacity expansion) were the FY20 trading highlights, although near-term COVID-19 sentiment is overshadowing these achievements. A decision on the FY20 final dividend is pending; we have assumed one is not declared and our estimates remain suspended. Severfield’s liquidity and order book positions suggest the company is well placed to service current business levels and compete for new work as
We have updated our forecasts, assuming revenue at 80%/90% of FY20 levels in FY21/FY22, alongside some cost reductions. We forecast PBT of £20.3m/£25.4m in FY21/FY22 (FY20: £28.6m). We expect the balance sheet to remain strong, forecasting net cash exc. lease liabilities of £11.9m/£16.3m (FY20: £16.2m). The Group is trading on an FY21 P/E multiple of 13.4x, falling to 10.6x. We use the long term P/E rating of 12.9x on our FY22 forecasts to drive an 88p TP, which implies 21% upside to the current
Results for the FY to March showed a 16% rise in PBT, with little impact from Covid-19. Financial guidance remains suspended, due to immediate uncertainties, but we believe longer-term demand will be fuelled by infrastructure, particularly HS2 projects which the UK’s leading structural steel group is bidding for, and logistics and data centres, boosted by the pandemic. The Group has a strong net cash balance and additional headroom and predicts sufficient cash for even its ‘worst case scenario’.
Severfield has confirmed there was no material impact on trading from COVID-19 in FY20. Its end March net funds position was above our expectations and its stated facility headroom was c £50m at that time. Understandably, the start to FY21 has seen disruption both in the UK, and from India’s lockdown status. The impact on trading is difficult to assess accurately so we are withdrawing our estimates beyond FY20 until the scale of the overall business impact can be better quantified.
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