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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)
2017A 262.2 25.7 20.3 5.7 11.7 7.3
2018A 274.2 29.0 24.0 6.5 10.3 8.7
2019E 279.2 30.2 25.0 6.8 9.8 7.7
2020E 285.9 32.9 27.3 7.4 9.0 6.5

Last updated on 30/01/2019

Investment summary

H119 operating profit was broadly equal to the prior year (which contained higher than usual benefit from favourable contract completions) and, taking into account an improved associate contribution, PBT was slightly ahead y-o-y. The UK order book is steady currently - with an increasing proportion of smaller, relatively short cycle jobs - while the Indian JV equivalent continues to grow. Consequently, a mooted expansion at the Bellary fab is set to get underway during FY19. Healthy ongoing cash flow is sufficient to meet Severfield's £4m share of equity funding for this project and leave an expected year end cash balance at £30m+. Management guidance for the full year is unchanged. A capital markets event on 31 January showcased some current UK projects and provided an update on developments in India.

Last updated on 01/02/2019

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.

Last updated on 01/02/2019

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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