Severfield Share Discussion Threads

[jonwig] 22/8/2012 07:01

Hi, David. Thanks for the link.
The government is under enormous pressure to get on with building stuff - anything with a big roof on would do the trick for SFR, I suppose!

fullday - thanks, but I can't open these '-' links. Anyway, here it is -

Tom Haughey, chief executive of Severfield Rowen , will be hoping bad news comes in threes after announcing that falling construction demand, tightening margins and payment delays had all hit first-half results at the structural steel specialist. Underlying pre-tax profits slumped by over half from £3.4m to £1.5m and, given the dismal outlook in the UK, broker Peel Hunt slashed its adjusted pre-tax profit forecasts for the 12 months to 31 December by almost a third to £8m, giving EPS of 6.5p (from £10.1m and 8.1p in 2011).

There could be further shocks to come as the group announced a reorganisation of three of its steel divisions into one unit by the end of this year, which it hopes will move UK operating profit margins back towards 6 per cent from the current 1.7 per cent. However, it's not all doom and gloom as the order book was stable at £218m, providing full revenue visibility to the group's new March year-end, and the Indian joint venture JSW is expected to turn a profit in the second half. That unit has agreed a £7m investment to increase production capacity by over 50 per cent to meet demand.

IC VIEW:

Shareholders in Severfield Rowen have had an unhappy five years, dogged by a collapse in the share price and savage dividend cuts. True, the UK outlook is miserable, but Severfield is generating cash and has a lowly geared balance sheet having cut net borrowings by 10 per cent in the half year. However, investor sentiment is poor and the risk is weighted to the downside. Sell.

Last IC view: Hold, 185p, 20 March 2012

Interesting that the share price actually rose after the initial mark-down thanks to a steady trickle of small buying. I'm not inclined to agree with IC: it's a bit late to be selling, I think.

[wilmdav] 21/8/2012 18:01

Agreed, results and outlook worse than expected. Forecasts must be under threat.

Not a bad half in terms of cash flow, and dividend held. Can't say I feel like topping up though.

[fangorn2] 21/8/2012 08:14

On the upside their chances of survival are significantly better than that of their competitors.But yes, grim assault on margins.

[jonwig] 21/8/2012 08:11

Yes, I found them a bit depressing!
OK, India is exceeding expectations, and the order book is holding up.
Meanwhile they are doing a bit of reorganising and competitors are being driven to the wall.
But the relentless squeeze on margins just goes on and on!

It does test ones patience as a long-term holder.

[fangorn2] 21/8/2012 07:51

Half year results

[corbeta] 02/8/2012 21:07

Construction PMI back above the 50 mark ..............

[alphorn] 13/7/2012 15:53

Strange reason - the CHF has been pegged to the € for almost a year.

[waldron] 13/7/2012 09:24

DATA SNAP: Swiss June PPI/Import Index Slips On Strong Franc
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By Marta Falconi
ZURICH--Swiss import and producer prices declined in June, signalling that inflation is likely to remain very low for some time to come due to the strong Swiss franc.
The combined producer and import price index fell 0.3% in June from May, and declined 2.2% from June 2011, the Swiss Federal Statistics Office said Friday. Changes in the index typically precede changes in the consumer price index, because lower import and producer prices are eventually passed on to consumers, at least in part.
The data were roughly in line with the average forecast from three economists for a monthly drop of 0.4% and an annual decline of 2.2%, according to a Dow Jones Newswires survey.
Prices for domestically produced goods fell by 1.2% on the year, while import prices dropped 4.1%.
Write to Marta Falconi at [e-mail]

[bluesbeater] 12/7/2012 16:36

What is with the spread? 153/141

[alter ego] 10/7/2012 18:21

bloody big roof needed - do they hold that much steel?

[jonwig] 10/7/2012 12:46

New Contract win today -

[jonwig] 09/7/2012 14:16

I still believe the 'last man standing' theory for the UK, which will recover eventually, even if it takes an inflationary splurge from Labour. India is a maybe bonus.

Brokers reckon pbt, eps and divi should be higher in the next two years.

Anyway, I managed to add a few below 145p this morning.

[jadeticl] 09/7/2012 12:45

Well you will get in at a better price this morning. This is a sad day for me to see them below 150p. I would like to see the long-term recovery start from here, but I cannot recognise it yet!!

[waldron] 09/7/2012 05:52

Swiss Economy Minister Says SNB Must Defend EUR/CHF Floor -Report
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ZURICH--The Swiss National Bank must keep defending its floor of 1.20 Swiss francs per euro "without compromise," even as pressure on the currency is expected to increase further, Switzerland's economy minister was quoted as saying Sunday.
"The pressure on the SNB will increase. That is why it is even more important to defend the floor without compromise," Johann Schneider-Ammann said in an interview with the SonntagsZeitung newspaper. "They will do so. Still, that doesn't come for free."
The SNB has been intervening to keep the franc just below CHF1.20 per euro as the currency bloc's financial crisis spurred 'safe-haven' buying. The bank imposed the floor in September, after the franc surged in August to near parity against the euro, the currency of its biggest trading partners, adding to pressure on Swiss exporters and the economy.
While Mr. Schneider-Ammann said the SNB has been successful in keeping prices stable and supporting the domestic economy, he acknowledged that pressure on the currency is increasing.
When asked if the SNB would reduce the EUR/CHF floor to keep costs under control, the minister said: "I couldn't imagine this scenario."
The SNB has repeatedly pledged to keep enforcing the minimum exchange rate and has said it doesn't exclude any measure, including capital controls and negative interest rates, to fend off safe-haven buying of Swiss francs.
"There were attempts in the past. Looking back, the effect was not really significant, at least less significant than expected. That is why I'm skeptical," Mr. Schneider-Ammann was quoted as saying, adding that the measures are still being analyzed.

[napoleon 14th] 03/7/2012 16:54

Nice update; thanks jonwig.

Is this the last leg (up) of a "W" started in April'11 @ 275p (or Jan'11 @ 350)?
VERY solid support here. VERY solid company & might this be the start of a long term recovery?

I'm watching before getting back in again...

[itchycrack] 15/6/2012 09:00

Cheers jonwig.
I note from the past that Director buys and sells have been pretty good at determining the direction of the share price here.

[fangorn2] 15/6/2012 08:17

Indeed, appreciate the update Jonwig.

[alter ego] 15/6/2012 08:14

thanks for that jonwig. don't hold SFR but they've been on my watchlist for ages - probably going to stay there for some time yet.

[jonwig] 15/6/2012 07:57

Well, I was at the AGM at Solberge Manor, posh hotel in the middle of nowhere.
There were about 80 present, mostly for the free lunch I think. It may be my imagination, but that seems to have been downsized.

Unlike previous years (though I missed 2011) it began with a presentation by CEO Tom Haughey. This won't be on the website, as he doesn't want the competition to learn too much. The main points of this were:

• static UK economy, UK plants fully loaded, UK order book steady (£216m at 18 May), still good prospects to bid for, cautious about timing of recovery, 2012 trading in-line with expectations.

• There were some slides showing current projects. TH highlighted one, a waste transfer facility in Runcorn. Whilst not headline-grabbing, he said this was a sector where SFR was recognised as having expertise, so has a promising future.

• An interesting slide showed how SFR's 2010 turnover was about equal to the combined turnover of its four largest competitors in the same year, and the operating margin considerably higher.

• They have great hopes for India, despite the economic problems. Having a joint partner was invaluable in dealing with officialdom, but they were graduallywinning the Indians over to the SFR way of doing things.

• In summary, TH repeated that he had absolutely no idea on the timing of a UK recovery.

After that there was the official business. There were just a couple of noteworthy things here. remuneration was passed 83:17, and re-election of one director (ex-Chair T Hayward) passed 85:15. This was unusual in that re-election of the other directors offered was almost 100:0.

There were a couple of questions from the floor about director pay, but they had a good reply, in that director pay had been cut quite heavily in 2009 and barely changed since.
Just two on the floor (myself one) voted against authority to buy back shares. I don't think they plan to do it anyway.

After the meeting I takled briefly to TH. We discussed the nightmare of doing business in India (partner was essential), and prospects for infrastructure projects in the UK. Here TH said many of them would be quite small ones. I didn't have the chance to ask about the cost over-runs announced on Monday as he had other demands.

It's worth noting that TH bought 20,000 shares and Alan Dunsmore (FD) 5,000 shares this week. Not massive, but rare enough to comment!

[jadeticl] 13/6/2012 18:26

Thanks jonwig. Sensible commentary.

[fangorn2] 13/6/2012 08:22

Cheers Jonwig

[jonwig] 13/6/2012 08:18

Register free (it's a worthwhile site) - they won't pester you!

[fangorn2] 13/6/2012 08:16

`Can you link it please....:)