Severfield Company Research (SFR)

Trading conditions have not improved as hoped for in the second half of the current financial year, which has resulted in a reduction in Severfield’s expected outcome for FY25. This weakness is reflected in our revised FY26 estimates. Given the uncertainty, Severfield has cancelled the share buyback programme and, at the end of March, it is likely to have c £25–30m of headroom in its banking arrangements. Furthermore, given the implied reduction in EPS, we have taken the opportunity to rebase the dividend at 1.5p, from 3.7p, implying cover of 2x in FY26e, while offering a yield of 6.8%.