Severfield (SFR)

Business description

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

Management had previously flagged a stronger H1 weighting in the current year and H118 results showed a good increase in revenue (+16%), around three-quarters of which was volume-driven. Even adjusting for a disposal profit, underlying margin performance was very strong with good progress on ongoing and completed projects, while the UK order book increased versus last reported. JV and associate companies (JSW Severfield Structures, India and CMF, respectively) both made positive profit contributions in the period. The H1 dividend was increased by 29%. We raised our FY17 PBT estimate by c 8%, with modest uplifts for FY19 and FY20, while at the same time raising dividend expectations by 6% in all three years. We note the successful award of the Google HQ steelwork contract as a further order book boost.

Last updated on 02/03/2018

Y/E Mar Revenue (£m) EBITDA (£m) PBT (£m) EPS (p) P/E (x) P/CF (x)
2016A 239.4 18.9 13.7 3.8 19.4 8.8
2017A 262.2 25.7 20.3 5.7 12.9 8.0
2018E 273.9 29.3 24.0 6.6 11.2 9.3
2019E 279.2 30.2 24.6 6.7 11.0 7.7

Last updated on 22/02/2018

Latest video

Executive Interview - Severfield

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.

Last updated on 02/03/2018

Key management

John Dodds, Chairman
Alan Dunsmore, CEO

Company address

Dalton Airfield Industrial Estate
Thirsk, North Yorkshire
United Kingdom
01845 577896
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