REG - Severfield PLC - AGM Trading Statement

SeverfieldAnnouncement

30/07/2024 07:00

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RNS Number : 2604Y  Severfield PLC  30 July 2024

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 (mailto: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).

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