Severfield Share Discussion Threads

[sspurt] 07/4/2015 15:51

Gargoyle - at the peak I think margins reached circa 16% so talk of 10% is not far fetched especially given SFR's unchallengeable UK market position

[gargoyle2] 31/3/2015 10:06

Good recent interview with the CEO. I especially liked his comments on the potential for increasing margins.

[jadeticl3] 29/3/2015 17:05

My understanding is that their plant capacity has been significantly higher than Current output, but they will have reduced labour to match current needs. They will be able to ramp up capacity as needed by recruiting and training. This will be a challenge they will be delighted to respond to.

[steelwatch100] 29/3/2015 10:52

Thanks jadeticl3 for the reply.

Presumably they have some spare volume capacity in their uk production facilities to take advantage of this demand and uplift turnover relatively quickly, whilst maintaining and/or improving margins?

[jadeticl3] 28/3/2015 17:34

We think there is, but we are expecting a slow build up and with it a rise in SFR share price. If we were not why would we be holding these shares? We are far from euphoric, but I am optimistic that the company is still in recovery mode.

[steelwatch100] 28/3/2015 12:07

Does UK fabricated demand looks solid for medium term & is there growth potential here?

[skinny] 24/3/2015 07:11

Severfield plc, the market leading structural steel group, announces that it is today hosting a Capital Markets Event for analysts and investors in London. A site visit to showcase the Group's current work at the Nova, Victoria development will be undertaken. There will also be a presentation by Severfield client, Mace, given by Mace Chief Executive Mark Reynolds, as well as presentations, chaired by Ian Lawson, Chief Executive Officer, which will illustrate Severfield's differentiated position within its market, key sectors of focus for the Group and its approach to the complexities of its design and build projects.

The Company will not be providing any new material information.

Presentation materials will be available on the Company's website ( following the event.

[gargoyle2] 24/3/2015 05:45

Edison yesterday (

Slightly mixed message tone from Severfield this morning. Investor sensitivities (specifically the Leadenhall Building - 'Cheesegrater’ and India) may re-awaken, but the message on the key UK market and progress therein remains positive and should take precedence in our view.

The replacement of bolts on the Leadenhall Building has been public knowledge for a while. The building owner, consulting engineer, main contractor and steelwork supplier (ie Severfield) are all working together to replace the faulty bolts (incidentally supplied by a third party which went into and has since been bought out of administration). SFR has incurred almost £1m of related costs to date – which will be treated as exceptional in FY15 (ending March) - and expects to work on the rectification until the end of calendar 2015, though the full potential cost exposure is not flagged. It is worth noting that liability for the costs of the programme are subject to discussion between the main parties and therefore, subject to further update.

The Indian JV operation has performed well during H2, with fabrication volume throughout and efficiencies resulting in ‘around break-even’ trading. (NB our estimates contained a £0.25m share of PAT loss in H2, similar to H1 and hence, a £0.5m loss for the year). So, a more positive trading outcome here, though the company notes a solid order book position (at c £39m versus £38m on 1 November and £41m on 1 May), but a softening pipeline more recently. Our estimates contain a repeat £0.5m loss result for FY16 and break-even for FY17.
UK operations have seen a steadily improving financial performance – in the form of rebuilding margins – over the last eighteen months or so, under the stewardship of CEO Ian Lawson. No specific new details are referenced in the RNS, save for a £194m order book position. This compares to £185m on 1 November (and £168m on 1 May); in the intervening period, SFR announced £43m of new contract wins in December, so fabrication activity levels appear to be healthy. Tomorrow’s capital market event is expected to showcase the range of project activity undertaken within Severfield and hopefully provide some insight on the generally recovering activity levels on large projects. We also note that SFR has recently taken on staff from Mabey Bridge to enhance its capability in the specialist bridging segment, with a bias towards infrastructure.

We believe that UK momentum is the most important aspect of today’s update and that is positive. At 65p, the company is trading on forward consensus P/Es of 19.1x FY16 and 14.1x FY17. The corresponding EV/EBITDAs are 10.8x and 8.5x respectively. Hence, multiples are normalising on a two year view; our estimates contain revenue growth of c 5% and c 100bp improvement in EBIT margin pa for the next two years. As the incidence of larger projects increases, we see scope for a faster rate of revenue growth, so monitoring the size and composition of the UK order book is a key lead indicator for us.

[mike740] 02/2/2015 09:28

02 Feb 2015 Severfield-Rowen PLC SFR Canaccord Genuity Buy 67.38 67.75 80.00 80.00 Reiterates

SP TARGET 80p

[gargoyle2] 25/1/2015 11:09

Came across this today. Just a blog, no idea whose.

[jadeticl3] 22/1/2015 12:02

The UK economy is moving very slowly in favour of the work SFR does. The new President in India has a reputation for energising the economy in his country ans making life better for companies like the SFR Joint Venture. These two factors should be good news for SFR shares, and business could start to improve at an increasing rate. Divi may be a year away but by then the company could be really healthy so increasing divi is not a pipe dream.

[cockneyrebel] 22/1/2015 10:29

Making new recent highs

CR

[4spiel] 19/12/2014 10:06

I bought 500 recently with a view to holding them for some time. The last results and lower oil price influenced me. Also that the company have new contract wins.

[scottishfield] 18/12/2014 13:34

in this morning despite no divi!

[bluesbeater] 18/12/2014 13:26

Be nice to get back to the days of the 10p divi! Probably going to take a few years, but quite conceivable.

[scottishfield] 18/12/2014 08:59

tks skinny, considering an investment here.

[skinny] 18/12/2014 08:58

Correct - from last months interims.

"Dividend

Consistent with previous statements, no interim dividend is being declared. The board remains committed to reinstating the payment of dividends depending on continued improvement in the financial performance of the business."