Severfield trading in line with expectations

30th Jul 2024 12:05

(Sharecast News) - Structural steel company Severfield said in an update on Tuesday that trading since the start of the financial year had met expectations.

The London-listed firm, which was holding its annual general meeting, said it remained on track to deliver results for 2025 in line with its forecasts, supported by a robust cash and balance sheet position.

Its order book for the UK and Europe remained strong, standing at £460m as of 1 July, with £369m scheduled for delivery over the next 12 months.

The order book was well-diversified, reflecting what the company described as a strengthened market position in Europe, where 32% of its projects are located.

Market conditions were showing signs of improvement, although pricing remained competitive in shorter cycle sectors like distribution.

Looking ahead, Severfield said it was well-positioned to capitalise on long-term growth trends in sectors such as green energy, commercial and industrial, and nuclear and infrastructure.

Key opportunities included battery plants, energy-efficient buildings, renewable energy manufacturing facilities, offshore wind projects, and major infrastructure projects.

The demand for data centres in the UK and European Union was also rising, driven by cloud computing, 5G, and artificial intelligence advancements.

In India, the construction sector was growing robustly, with Severfield's Indian order book at £181m, comprising 72% higher-margin commercial work.

The company said it was accelerating expansion plans in partnership with JSW to meet the growing market demand, with new factory capacity increases expected in the second half of the year.

Severfield's Indian joint venture, JSSL, was also well-positioned to benefit from the positive economic outlook and strong demand for structural steel.

Severfield's share buyback programme, announced in April, was progressing well, with 2,577,383 shares purchased and cancelled to date at a cost of £1.9m.

The group said it would announce its half-year financial results on 26 November.

At 1142 BST, shares in Severfield were up 0.15% at 82.32p.

Reporting by Josh White for Sharecast.com.