REG - Severfield PLC - AGM trading update

SeverfieldAnnouncement

06/09/2023 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230906:nRSF4595La&default-theme=true

RNS Number : 4595L  Severfield PLC  06 September 2023

6 September 2023

Severfield plc

('the Company' or 'the Group')

AGM trading update - expectations for 2024 are unchanged

 

Severfield plc, the market-leading structural steel group, announces the
following trading update, ahead of today's Annual General Meeting ('AGM').

 

Operational and trading update

The Group's financial performance in the first five months of the year is in
line with our expectations and our cash and balance sheet position remains
strong.

 

UK and Europe

The Group is pleased with the continuing high quality of the UK and Europe
order book which stands at £479m at 1 September (1 June: £510m), of which
£337m 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. In terms of geographical spread, 90 per cent of the order book
represents projects in the UK, with the remaining 10 per cent representing
projects for delivery in Europe and the Republic of Ireland (1 June 2023: 90
per cent in the UK, 10 per cent in Europe and the Republic of Ireland).

 

Since the announcement of the 2023 results in June, we have secured a
significant amount of high quality new work and variations to existing
contracts, and our large order book continues to provide us with good earnings
visibility for the remainder of the 2024 financial year and beyond. We are
also continuing to see some large project opportunities in the UK and in
continental Europe, supported by the recent acquisition of Voortman Steel
Construction ('VSCH'), which is integrating well into the Group's operations.
Notwithstanding this, the current backdrop of more persistent high inflation
and rising interest rates is resulting in some ongoing delays in the
conversion of our existing pipeline of opportunities, as clients wait for
economic stability, together with some lower tendering activity, particularly
in the distribution sector. These more challenging recent market conditions
were also a factor in the decision by Sunset Studios to pause construction on
its planned new film production base in Hertfordshire, a contract which was
removed from the order book in July.

 

Many of our chosen markets continue to have a favourable outlook - the Group
has a prominent position in market sectors with strong growth potential and is
well-positioned to win projects in support of a low-carbon economy. These
include opportunities in both our Commercial and Industrial division and
Nuclear and Infrastructure division, such as battery plants, energy efficient
buildings, manufacturing facilities for renewable energy, together with work
in the transport, nuclear and power and energy sectors given our capability to
deliver major infrastructure projects.

 

In our Modular Solutions division, we have maintained our focus on growing our
Severstor and Rotoflo product ranges, which attract higher margins. We
continue to make significant progress in growing our revenues and client base
and are on track to achieve a good performance for the 2024 financial year.

 

India

The order book has increased to £170m at 1 September (1 June: £139m). With
this record order book, improving pipeline of potential orders and numerous
identified growth opportunities, JSSL is well-positioned to take advantage of
a very encouraging outlook for the Indian economy and a strong underlying
demand for structural steel in construction.

 

Outlook

The outlook for the Group remains positive and our businesses are
well-positioned in markets with excellent long-term growth opportunities.
Whilst current trading conditions are more challenging, given the Group's
historical performance, diversified activities and the strength of our order
books, we continue to expect to deliver further progress and a result for 2024
which is in line with our expectations.

 

Half year results

The Group will announce its financial results for the half year ending 23
September 2023 on Tuesday 21 November 2023.

 

For further information, please contact:

 

Severfield                                 Alan
Dunsmore
01845 577 896

Chief Executive Officer

 

Adam
Semple
01845 577 896

Chief Financial Officer

 

Jefferies International               Simon Hardy
 
020 7029 8000

Will
Soutar
020 7029 8000

 

Liberum Capital                        Nicholas How
 
020 3100 2000

Ben
Cryer
020 3100 2000

 

Camarco
Ginny Pulbrook
 
020 3757 4980

Tom Huddart
 
020 3757 4980

 

 

 

Notes to AGM statement:

Except as otherwise stated '2023' refers to the 52-week period ended 25 March
2023 and '2024' refers to the 53-week period ending 30 March 2024. 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.1,800 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).

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  MSCSSAFDIEDSEIU