30
July 2024
Severfield
plc
('the Company' or 'the
Group')
AGM trading update - trading
in line with expectations
Severfield plc, the market-leading
structural steel group, announces the following trading update,
ahead of today's Annual General Meeting ('AGM').
Current trading and outlook
Trading since the start of the
financial year has been as expected and the Group remains on track
to deliver a result for 2025 which is in line with its
expectations. The Group's cash and balance sheet position remains
strong. Our businesses remain well-positioned to win work in
markets with positive long-term growth trends, providing us with a
strong platform to fulfil our strategic growth
aspirations.
UK and
Europe
The Group is pleased with the
continuing high quality of the UK and Europe order book which
stands at £460m at 1 July (1 June: £478m), of which £369m is for
delivery over the next 12 months. The order book remains
well-diversified and contains a good mix of projects across the
Group's key market sectors. The composition of the order book
reflects the continued strengthening of our market position in
Europe, with 32 per cent of the order book representing projects in
continental Europe and Ireland (1 June: 32 per cent).
As highlighted in our 2024 full year
results announcement in June, market conditions are showing signs
of improvement although pricing remains competitive for some
projects in our shorter cycle sectors, including in the
distribution sector. Looking further ahead, our businesses remain
well-positioned to win work in markets with positive long-term
growth trends including those which are driving the green energy
transition. These include opportunities in both our Commercial and
Industrial division and our Nuclear and Infrastructure division,
such as battery plants, energy efficient buildings, manufacturing
facilities for renewable energy and offshore wind projects together
with work in the transport, nuclear and power and energy sectors
given our capability to deliver major infrastructure projects. We
are also seeing a strong demand for data centres in the UK and EU,
fuelled by cloud computing, 5G and the recent advancement of
Artificial Intelligence ('AI') applications.
India
India's construction sector
continues to grow strongly, a position which is evident in the
Indian order book of £181m at 1 July (1 June: £181m), which
contains a good mix of higher margin commercial work of 72 per cent
(1 June: 71 per cent). The expanding market picture is also
reflected in an improving pipeline of potential orders with
numerous growth opportunities identified in target markets,
including in near markets such as Saudi Arabia. To support this
expected market growth, we have agreed with our joint venture
partner, JSW, to accelerate expansion plans for the business, with
some new factory capacity increases expected to be completed in H2.
Momentum and value are building in JSSL and the business is well
positioned to take advantage of a very encouraging outlook for the
Indian economy and a strong underlying demand for structural
steel.
Share buyback programme update
In April 2024, the Group announced a
share buyback programme to repurchase up to £10m of ordinary
shares, subject to market conditions. The board is satisfied with
the progress of this buyback programme, with a total of 2,577,383
shares purchased and cancelled to date, at a cost of
£1.9m.
Half year results
The Group will announce its
financial results for the half year ending 28 September 2024 on
Tuesday 26 November 2024.
For further information, please
contact:
Severfield
Alan Dunsmore
01845 577
896
Chief Executive Officer
Adam
Semple
01845 577 896
Chief Financial Officer
Jefferies International
Will Soutar
020 7029 8000
Liberum Capital
Nicholas How
020 3100 2000
Camarco
severfield@camarco.co.uk
Ginny Pulbrook
07961 315 138
Tom Huddart
07967 521 573
Notes to AGM statement:
except as otherwise stated '2024'
refers to the 53-week period ended 30 March 2024 and '2025' refers
to the 52-week period ending 29 March 2025. The Group's accounts
are made up to an appropriate weekend date around 31 March each
year.
Notes to editors:
Severfield is the UK's market leader
in the design, fabrication and construction of structural steel,
with a total capacity of c.150,000 tonnes of steel per annum. The
Group has seven sites, c.1,900 employees and expertise in large,
complex projects across a broad range of sectors. The Group also
has an established presence in the expanding Indian market through
its joint venture partnership with JSW Steel (India's largest steel
producer).