8 September 2022
('the Company' or 'the Group')
AGM trading update
Trading in line with expectations
Ahead of today's Annual General Meeting ('AGM'), Severfield plc, the market leading structural steel group, announces the following trading update for the first five months of the financial year ending 25 March 2023.
Operational and trading update
The Group is pleased to report that performance in the first five months of the 2023 financial year has been strong and trading is in line with management's expectations, with several ongoing contracts expected to deliver significant profits in H2.
UK and Europe
The Group is pleased with the continuing high quality of the UK and Europe order book which stands at £483m at 1 September (1 June 2022: £486m), of which £363m is for delivery over the next 12 months. The order book remains well-diversified and contains a good mix of projects across the Group's key market sectors. In terms of geographical spread, 97 per cent of the order book represents projects in the UK, with the remaining 3 per cent representing projects for delivery in Europe and the Republic of Ireland (1 June 2022: 96 per cent in the UK, 4 per cent in Europe and the Republic of Ireland).
As well as maintaining an historically high level of orders across the Group, we are also seeing a strong pipeline of further potential opportunities, in the UK and in continental Europe, and we remain well positioned to take advantage of many of these in both our Commercial and Industrial division and Nuclear and Infrastructure division.
JSSL is continuing to ramp up its Bellary facility towards its maximum capacity of c.100,000 tonnes in 2023. The company's strong order book of £152m at 1 September (1 June 2022: £158m), together with an improving pipeline of potential orders, reflects a continuing strong underlying demand for structural steel in India. All this leaves the business very well-positioned to take advantage of a growing economy which, together with the ongoing conversion of the market from concrete to steel, will drive the success and long term value of the business.
In conjunction with our joint venture partner, we are close to selecting another plot of land to facilitate the future expansion of the business. This land purchase, which will be completed in H2, will allow the business to expand its geographical footprint whilst providing it with the platform to build quickly and incrementally add the necessary volume to support the expected future market growth.
Whilst we remain mindful of the macro-economic backdrop and particularly the inflationary pressures which are expected to continue for the foreseeable future, we are continuing to manage these well. Given the Group's performance to date and the current visibility of future workload for delivery in the remainder of the 2023 financial year, we continue to expect to deliver further progress and a full year performance which is in line with our previous expectations.
Half year results and capital markets day
The Group will announce its financial results for the half year ending 24 September 2022 on Tuesday 22 November 2022. We will also host a Capital Markets Day for investors and analysts in January 2023, for which a separate RNS notice will be issued in due course.
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 AGM statement:
Except as otherwise stated '2022' refers to the 52-week period ended 26 March 2022 and '2023' refers to the 52-week period ending 25 March 2023. 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.150,000 tonnes of steel per annum. The Group has six sites, c.1,500 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).