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Severfield

LN: SFR

£200.7m market cap

65.6p last close

Severfield is a leading UK structural steelwork fabricator operating across a broad range of market sectors. An Indian facility currently undertakes structural steelwork projects for the local market and is fully operational.

Investment summary

FY19 revenue was flat y-o-y, Severfield delivered increased company-defined PBT and earnings (by 5%) with an 8% uplift in conventional DPS. (No special dividend was declared for this year, as expected.) The Indian JV was the strongest contributor to progress in the year with profitability more than doubling as the sharp pick up in orders started to translate into revenue. In the UK, the performance was generally robust with stable operating margins in both half years and modest y-o-y progress on a reported basis. After funding investment in the UK and India and paying the FY18 special dividend, Severfield ended FY19 with c £25m net funds.

Y/E Mar
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2018A 274.2 29.0 24.0 6.5 10.1 8.6
2019A 274.9 29.0 25.2 6.8 9.6 11.0
2020E 285.9 32.4 27.3 7.4 8.9 7.3
2021E 292.5 33.6 28.1 7.6 8.6 7.1
Last updated on 25/07/2019
Industry outlook

The primary strategic aim is to maintain Severfield’s position as the leading UK structural steelwork supplier. An Indian JV (established in 2010) is fully operational and targeting 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 and the JV is in the process of expanding capacity.

Last updated on 25/07/2019
Sector
Industrials
Share price graph
Balance sheet
Forecast net cash (£m) 29.9
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (7.2) (13.5) (20.5)
Relative* (8.3) (13.9) (18.3)
52-week high/low 85.7p/64.6p
*% relative to local index
Key management
John Dodds Chairman
Alan Dunsmore CEO

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