Steel yourselves: Severfield announces record UK order book
Severfield has posted a bullish trading update ahead of its full year results, revealing a record order book for projects in the UK and Europe.
The structural steel group, which built the new stands at Lords and supplied steel for Everton Football Club’s new stadium, has ramped up its domestic order book to £508m by the start of March this year– including £391m for delivery over the next 12 months.
This is a huge boost on last November, when the order book was sitting at £464m.
In terms of geographical spread, 93 per cent of the order book represents projects in the UK, with the remaining seven per cent representing projects for delivery in continental Europe and the Republic of Ireland.
Severfield told the London Stock Exchange: “We are encouraged by the current level of tendering and pipeline activity across the group, seeing a consistently high level of opportunities both in the UK and in continental Europe, as many of our chosen markets continue to have a favourable outlook.”
Last November, the company posted record half-year results powered by soaring steel prices.
The company also confirmed it is due to wrap up £21m takeover of Dutch steelwork contractor Voortman Steel Construction Holding next week, and that it had bought more land in India as part of its expansion plans across its production facilities.
Total output this year in India is expected to top the facility’s maximum capacity of 100,000 tonnes.
Looking to the future, Severfields said: “Whilst we remain mindful of the macro-economic backdrop, given the group’s historical performance and the current visibility of forward workload for delivery in the 2024 financial year and beyond, we look to the future with confidence.”
Its results for the year to 25 March will be announced on 14 June.
Analysts at Jefferies has maintained a buy stance towards the company, with a target price of 109p per share.
They said: “Severfield’s trading ipdate is positive, in our view. Mgmt’s FY23F expectations are unchanged, and order books in the UK and Europe and the Indian JV have expanded in the last few months. Indeed, the former is 10 per cent up compared compared to November 22, and there is a healthy pipeline of opportunities (including several large projects).”
Shares in the company are down 1.45 per cent of the FTSE All-Share in this afternoon’s trading, despite the upbeat trading announcement.