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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.

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 22.4 10.2
2017A 262.2 25.7 20.3 5.7 14.9 9.3
2018E 273.9 29.3 24.0 6.6 12.9 10.7
2019E 279.2 30.2 24.6 6.7 12.7 8.9

Last updated on 20/04/2018

Investment summary

Severfield’s closing FY18 update reiterated latest guidance and management confidence in attaining its FY20 PBT target of £26m. As previously noted, sector diversity is enabling the company to focus resources on relatively better areas and sustaining a stable UK order book position. We are assured that tendering activity remains high and win rates are stable which suggests that underlying market conditions are substantially unchanged. While the Indian order book has reduced (from £79m in November to £62m on 1 April) it remains well above historic levels. Our estimates are unchanged and FY18 results are scheduled for 20 June.

Last updated on 27/04/2018

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 27/04/2018

Key management

John Dodds, Chairman
Alan Dunsmore, CEO

Company address

Dalton Airfield Industrial Estate
Dalton
Thirsk, North Yorkshire
YO7 3JN
United Kingdom
01845 577896
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