TIDMSFR
RNS Number : 2291U
Severfield PLC
27 March 2023
27 March 2023
Severfield plc
('the Company' or 'the Group')
Trading Update and Capital Markets Event
Severfield plc, the market-leading structural steel group, today
issues the following trading update for the year ended 25 March
2023, ahead of holding its Capital Markets Event for analysts and
shareholders later today and the announcement of its annual
financial results on Wednesday 14 June.
FY23 results
The Group is pleased to report that performance in the second
half of the 2023 financial year has been strong and we expect to
deliver a full year result in line with our previous
expectations.
Operational and trading update
UK and Europe
In the second half of the year, we continued to secure a
significant value of high-quality work, resulting in a record UK
and Europe order book of GBP508m at 1 March 2023 (1 November 2022:
GBP464m), of which GBP391m 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, 93 per cent of the order book represents
projects in the UK, with the remaining 7 per cent representing
projects for delivery in Europe and the Republic of Ireland.
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. In our
Commercial and Industrial division, we remain well positioned to
take advantage of many opportunities, including battery plants,
data centres, TV and film studios, commercial offices and stadia
and leisure projects. In our Nuclear and Infrastructure division,
we are also seeing a healthy pipeline of opportunities including in
the nuclear sector, where we have recently been selected as one of
two 'key delivery partners' to deliver structural steelwork at
Sellafield as part of the long-term Programme and Project Partners
framework.
India
The Indian joint venture ('JSSL') has performed in line with
expectations in the second half of the year. JSSL is continuing to
ramp up its Bellary facility towards its maximum capacity of
c.100,000 tonnes, with total output for 2023 including
sub-contracted work likely to exceed 100,000 tonnes.
Notwithstanding some current market pressures in India, JSSL has
continued to win new work, resulting in a strong order book of
GBP146m at 1 March 2023 (1 November 2022: GBP143m). In terms of
mix, 50 per cent of the order book represents higher margin
commercial work, with the remaining 50 per cent representing
industrial projects, mainly for JSW, our joint venture partner.
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 economy which is expected
to grow significantly in the medium term.
In conjunction with JSW, we are in final negotiations to secure
a plot of land in India to facilitate the future expansion of the
business. The land purchase will allow the business to expand its
geographical footprint whilst providing it with the platform to
expand quickly and add the necessary volume to support the expected
future market growth.
Acquisition of Voortman Steel Construction Holding
On 15 March 2023, the Group announced that it has entered into
an agreement to acquire 100% of the share capital of Voortman Steel
Construction Holding B.V. ('VSCH'), an innovative European steel
construction group, for a net consideration of EUR24m payable in
cash on completion. Unchanged from this earlier announcement, the
acquisition is expected to complete on the later of either 3 April
or satisfactory completion of the works council consultation
process, as required under Dutch Law.
Capital Markets Event
The Capital Markets Event will focus on the benefits of the
Group's new divisional structure, opportunities for expansion in
Europe (including the acquisition of VSCH) and Project Horizon, our
digital transformation programme. The event is being hosted by
Chief Executive Officer, Alan Dunsmore and Chief Financial Officer,
Adam Semple and will include presentations and activities with
Managing Directors from our business units and other senior
colleagues. The event presentation will be made available on
Severfield's website.
Outlook
The Group's businesses are well-positioned in markets with
excellent long-term growth opportunities, underpinned by our new,
simplified divisional structure. 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.
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 trading update:
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.130,000 tonnes of steel per annum. The Group has six sites,
c.1,700 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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END
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