Severfield market outlook optimistic with "record" India order book

(Alliance News) - Severfield PLC on Wednesday reported strong financial results and raised its dividend against a challenging market backdrop.

The York, England-based structural steel firm said in the year that ended March 30, pretax profit fell 15% to GBP23.0 million from GBP27.1 million the year prior.

Revenue declined 6% to GBP463.5 million from GBP491.8 million.

Severfield increased the final dividend to 2.3 pence per share from 2.1p, bringing the total dividend for the year to 3.7p, up 8.8% from 3.4p.

Chief Executive Officer Alan Dunsmore said: "This is the result of an excellent operational performance and the success of our strategy to diversify the sectors and geographies we serve. This has enabled us to deliver enhanced returns for shareholders through our recent share buyback scheme, building on our ten consecutive years of progressive dividends."

Following the completion of a EUR24 million acquisition of Voortman Steel Construction Holding BV in April 2023, Severfield said the Dutch steel company is "integrating well" into operations and strengthening the company's position in the European market.

However, during the year, conditions in both the UK and European market were softer across the distribution and infrastructure sectors. Yet Severfield said there are a number of emerging opportunities across commercial, industrial, nuclear, as well as infrastructure.

At June 1, the order book in this region stood at GBP478 million, of which GBP384 million is due for delivery over the next twelve months.

In India, Severfield boasts a record order book of GBP181 million, up 9.7% from GBP165 million. In this region the company believes the outlook is encouraging with a strong underlying demand for structural steel creating an opportunity for growth.

"Looking ahead, we have strong order books in the UK, Europe and India which are providing us with good earnings visibility through 2025 and beyond. With market conditions showing signs of improvement and with our businesses well-placed in markets that are expected to benefit from positive long term growth trends, which are unlikely to be impacted by the result of the upcoming UK general election, we are confident in the outlook for the business," Dunsmore said.

Severfield shares were down 2.1% to 70.08 pence each in London on Wednesday morning.

By Elijah Dale, Alliance News reporter

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