Severfield PLC Pre-close Trading Update (6604I)
20 Avril 2022 - 8:00AM
UK Regulatory
TIDMSFR
RNS Number : 6604I
Severfield PLC
20 April 2022
20 April 2022
Severfield plc
('the Company' or 'the Group')
Pre-close trading update
Order books at record levels
Severfield plc, the market leading structural steel group, today
issues the following trading update for the year ended 31 March
2022, ahead of the announcement of its annual financial results on
Wednesday 15 June.
FY22 expectations
The Group expects to deliver a full year result in line with
management's previous expectations.
Operational and trading update
UK and Europe
In the second half of the year, we have continued to secure a
significant value of new work, resulting in a record UK and Europe
order book of GBP479m at 1 April 2022 (1 November 2021: GBP393m),
of which GBP382m is for delivery over the next 12 months. The order
book remains well-diversified and contains a healthy mix of
projects across the Group's key market sectors. In terms of
geographical spread, 94 per cent of this order book represents
projects in the UK, with the remaining 6 per cent representing
projects for delivery in Europe and the Republic of Ireland.
We continue to be encouraged by the current level of tendering
activity across the Group, both in the UK and in continental
Europe, and are well-positioned to take advantage of some
significant opportunities in the industrial and distribution
(battery plants and distribution centres), stadia and leisure,
transport infrastructure, nuclear and data centre sectors.
Despite seeing further input cost inflation (including in steel
prices) and some disruption to raw material supplies as a result of
Russia's invasion of Ukraine, we are currently managing these
effectively, and steel remains largely a pass-through cost for the
Group.
India
The Indian joint venture ('JSSL') has performed profitably and
in line with expectations in the second half of the year. This
follows a difficult start to the year when output was disrupted by
the second wave of COVID-19. Notwithstanding some current
inflationary pressures, JSSL has continued to win new work,
resulting in a record order book of GBP166m at 1 April 2022 (1
November 2021: GBP140m). In terms of mix, 40 per cent of the order
book represents higher margin commercial work, with the remaining
60 per cent representing industrial projects, mainly for JSW. This
order book, together with JSSL's improving pipeline of potential
orders, reflects a continuing strong underlying demand for
structural steel in India, leaving the business very
well-positioned to take advantage of an improving economy.
Strong balance sheet and financial position
The financial position of the Group remains good and year-end
net debt (on a pre IFRS 16 basis) was c.GBP19m, representing an
overdraft of c.GBP4m and outstanding acquisition loans of c.GBP15m.
Net working capital has increased in H2 reflecting the impact of
steel and other input price rises, together with higher steel
purchases to meet production requirements in early FY23 when
executing our record UK and Europe order book.
In December 2021, the Group completed a refinancing of its
revolving credit facility ('RCF'). The new GBP50m RCF provides
additional liquidity above the GBP25m RCF which it replaced and
extends the term of the facility which now expires in December
2026. The new facility provides the Group with enhanced liquidity
and long-term financing to help support its growth strategy.
Outlook
With a record UK and Europe order book of GBP479m, a very
encouraging pipeline of opportunities, and a well-positioned
business in India, the outlook for the Group remains positive,
although we remain mindful of the ongoing effects of Russia's
invasion of Ukraine.
For further information, please contact:
Severfield Alan Dunsmore 01845 577 896
Chief Executive Officer
Adam Semple 01845 577 896
Group Finance Director
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 editors:
Severfield is the UK's market leader in the design, fabrication
and construction of structural steel, with a total capacity of
c.165,000 tonnes of steel per annum. The Group has six sites,
c.1,500 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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