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Severfield (GB:SFR)
LSE:SFR

Severfield (SFR) AI Stock Analysis

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Severfield

(LSE:SFR)

62Neutral
Severfield's overall stock score reflects a stable financial foundation but is challenged by declining profitability and weak market momentum. While technical indicators are bearish, the company's valuation presents a mixed picture with a high dividend yield and reasonable P/E ratio. Corporate events highlight strategic initiatives and future growth opportunities, but market challenges and projected lower profits weigh on the outlook.
Positive Factors
Joint Venture
There is a potentially valuable India joint venture that is 'in for nothing'.
Recovery Potential
Analyst remains positive on the group's recovery potential and long-term growth opportunity.
Negative Factors
Leadership Change
CEO Alan Dunsmore has mutually agreed with the Board to step down, indicating ongoing challenges for the company.
Market Conditions
End market conditions are tougher-than-expected, with tighter-than-expected pricing and project delays/cancellations.

Severfield (SFR) vs. S&P 500 (SPY)

Severfield Business Overview & Revenue Model

Company DescriptionSeverfield (SFR) is a leading structural steelwork company based in the United Kingdom. The company operates across various sectors, including commercial, industrial, and infrastructure, providing steel fabrication services and products. Severfield specializes in designing, manufacturing, and installing steel structures for diverse projects, ranging from iconic buildings to complex bridges and industrial facilities.
How the Company Makes MoneySeverfield makes money primarily through the design, fabrication, and erection of structural steelwork for a wide array of applications. The company secures revenue by undertaking contracts for large-scale construction projects in sectors such as commercial buildings, transport infrastructure, industrial facilities, and stadia. Key revenue streams include long-term partnerships with construction firms, project-specific contracts, and maintenance services. Severfield's earnings are significantly influenced by its ability to secure major projects and its efficiency in delivering high-quality steel solutions on time and within budget.

Severfield Financial Statement Overview

Summary
Severfield presents a stable financial profile with a strong balance sheet and reasonable cash flow generation. While profitability metrics have shown some weaknesses, particularly in net income, the company maintains a healthy equity position which mitigates financial risks. The primary areas for improvement include enhancing revenue growth and stabilizing free cash flow.
Income Statement
70
Positive
Severfield has shown stable revenue with fluctuations over the years. The gross profit margin is healthy at approximately 21% for the latest year, although the net profit margin has decreased from previous years. There have been some declines in revenue growth rate, especially in the most recent year, which affects the overall score. EBIT and EBITDA margins are reasonable but show room for improvement.
Balance Sheet
75
Positive
The balance sheet reflects a strong equity position with an equity ratio of around 58%. The debt-to-equity ratio is low, indicating financial stability. Return on Equity (ROE) has shown a slight decline over the years, suggesting a need for improved profitability. Overall, the company's balance sheet is solid with manageable debt levels.
Cash Flow
65
Positive
Severfield's cash flow statement shows a positive operating cash flow, but free cash flow has seen a decline recently. The Free Cash Flow to Net Income Ratio is robust, indicating a strong ability to generate cash relative to its net income. However, the volatility in free cash flow growth rates suggests some challenges in cash flow management.
Breakdown
Mar 2024Mar 2023Mar 2022Mar 2021Mar 2020
Income StatementTotal Revenue
463.46M491.75M403.56M363.25M327.36M
Gross Profit
97.46M73.84M51.56M63.14M60.07M
EBIT
26.41M29.47M21.83M22.39M25.56M
EBITDA
41.07M38.55M33.09M31.13M31.16M
Net Income Common Stockholders
15.90M21.57M15.60M17.30M20.41M
Balance SheetCash, Cash Equivalents and Short-Term Investments
13.80M11.34M0.0024.98M44.34M
Total Assets
378.41M369.67M375.48M342.50M335.39M
Total Debt
42.48M22.35M26.49M31.86M39.36M
Net Debt
28.68M11.01M26.49M6.88M-4.98M
Total Liabilities
157.66M151.95M171.52M151.57M151.71M
Stockholders Equity
220.75M217.72M203.96M190.93M183.68M
Cash FlowFree Cash Flow
33.81M41.33M-12.13M18.03M14.92M
Operating Cash Flow
45.14M47.80M-6.74M24.65M21.38M
Investing Cash Flow
-37.45M-14.69M-5.54M-26.45M-19.59M
Financing Cash Flow
-8.63M-17.80M-16.68M-17.56M17.56M

Severfield Technical Analysis

Technical Analysis Sentiment
Negative
Last Price21.90
Price Trends
50DMA
38.91
Negative
100DMA
49.15
Negative
200DMA
63.04
Negative
Market Momentum
MACD
-5.01
Negative
RSI
21.28
Positive
STOCH
5.09
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:SFR, the sentiment is Negative. The current price of 21.9 is below the 20-day moving average (MA) of 23.41, below the 50-day MA of 38.91, and below the 200-day MA of 63.04, indicating a bearish trend. The MACD of -5.01 indicates Negative momentum. The RSI at 21.28 is Positive, neither overbought nor oversold. The STOCH value of 5.09 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:SFR.

Severfield Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
£347.55M8.8135.97%4.37%22.39%179.53%
CRCRH
75
Outperform
£59.74B17.5716.07%1.95%1.78%15.53%
GBKIE
67
Neutral
£555.54M12.9710.20%3.97%8.04%6.94%
62
Neutral
$8.06B13.613.91%3.11%3.80%-14.06%
GBSFR
62
Neutral
£64.34M20.471.55%16.89%6.00%-84.54%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:SFR
Severfield
21.90
-31.38
-58.90%
GB:KIE
Kier Group plc
129.80
5.30
4.26%
GB:GFRD
Galliford Try
355.00
125.56
54.72%
CRH
CRH plc
88.14
4.61
5.52%

Severfield Corporate Events

Business Operations and StrategyFinancial Disclosures
Severfield’s Recovery Prospects Highlighted in New Research
Positive
Mar 28, 2025

Severfield plc has commissioned Progressive Equity Research to provide ongoing research coverage, highlighting the company’s recovery prospects despite recent profit warnings due to challenging markets. The research suggests that Severfield’s long-term growth potential remains strong, with earnings expected to double by FY27E under conservative estimates, indicating a compelling value for investors.

Executive/Board ChangesBusiness Operations and Strategy
Severfield CEO Alan Dunsmore to Step Down, Search for Successor Underway
Neutral
Mar 26, 2025

Severfield PLC announced that CEO Alan Dunsmore will step down after more than seven years in the role, effective June 30, 2025. The company has initiated a search for his successor while interim leadership is in place to ensure continuity. Under Dunsmore’s leadership, Severfield has seen significant growth and strategic development in the UK, Europe, and India. The board aims to continue building on this foundation, focusing on manufacturing efficiency and project delivery to drive further growth and shareholder returns.

Executive/Board Changes
Severfield PLC Announces Board Member’s New Appointment
Positive
Mar 24, 2025

Severfield PLC has announced a change in its board of directors. Cynthia Gordon, who serves as a Non-Executive Director and Chair of the Remuneration Committee at Severfield, has been appointed as a Non-Executive Director at Airtel Africa plc, effective March 24, 2025. This appointment may enhance Severfield’s strategic connections and influence within the industry, potentially benefiting its stakeholders.

Stock Buyback
Severfield Cancels £10 Million Share Buyback Programme
Neutral
Mar 3, 2025

Severfield plc has announced the cancellation of its £10 million share buyback programme, which was initially launched in April 2024. By the end of February 2025, the company had repurchased and cancelled over 13 million ordinary shares at a cost of approximately £9.26 million. The current issued share capital stands at 296,181,987 ordinary shares, which shareholders can use to determine their voting rights under the Financial Conduct Authority’s rules.

Business Operations and StrategyFinancial Disclosures
Severfield Faces Market Challenges but Eyes Future Growth Opportunities
Negative
Mar 3, 2025

Severfield plc reports challenging market conditions in the UK and Europe, with tight pricing and project delays impacting its financial outlook for FY25 and FY26. Despite efforts to mitigate these effects through cost reductions and new project awards, the company expects lower profits and continues to face deferred client decision-making. However, Severfield remains optimistic about future opportunities in sectors like data centers and green energy, which are expected to drive long-term growth and shareholder returns.

Business Operations and StrategyFinancial Disclosures
Severfield Faces Market Challenges but Eyes Future Opportunities
Negative
Mar 3, 2025

Severfield plc, a leading structural steel group, reports challenging market conditions in the UK and Europe, with project delays and cancellations affecting its order book and financial performance for FY25. Despite efforts to mitigate these impacts through cost reductions and new project awards, the company expects its underlying profit before tax to be lower than anticipated. Looking ahead, Severfield has secured large projects for FY27 and sees opportunities in sectors like data centers and green energy, which provide confidence in future shareholder returns and unchanged medium-term growth targets.

Stock Buyback
Severfield Executes Share Buy-Back and Adjusts Voting Rights
Neutral
Jan 30, 2025

Severfield plc has executed a share buy-back of 200,000 ordinary shares at an average price of 48.25 pence, as part of a program authorized at their 2023 Annual General Meeting. The purchased shares will be canceled, impacting the total voting rights, which stands at 296,181,987 as of 29 January 2025.

Stock BuybackRegulatory Filings and Compliance
Severfield Executes Share Buy-back, Adjusts Voting Rights
Neutral
Jan 27, 2025

Severfield, a company engaged in the steel construction industry, has executed a share buy-back program by purchasing 50,000 ordinary shares at an average price of 47.70 pence each on the London Stock Exchange. The purchased shares are intended to be canceled, which affects the total voting rights in the company, now standing at 296,381,987, providing a new denominator for shareholder interest notifications as per FCA rules.

Stock BuybackBusiness Operations and Strategy
Severfield Announces Share Buyback and Voting Rights Update
Positive
Jan 22, 2025

Severfield plc has repurchased 50,000 of its own ordinary shares at a price of 49 pence each on the London Stock Exchange, as part of a share buy-back program authorized by shareholders. The company plans to cancel these shares, which will adjust its total voting rights to 296,431,987, a figure that shareholders can use for regulatory notification purposes. This move is a strategic financial decision likely aimed at optimizing capital structure and enhancing shareholder value.

Severfield Initiates Share Buy-Back to Enhance Shareholder Value
Jan 15, 2025

Severfield plc has announced the purchase of 165,000 ordinary shares, as part of its share buy-back program, at an average price of 47.00 pence per share on the London Stock Exchange. This transaction, authorized at the 2023 AGM, aims to cancel the shares to potentially improve shareholder value. The total number of voting rights in the company now stands at 296,481,987, allowing shareholders to evaluate their interests as per financial regulations.

Severfield PLC Announces Share Buy-Back and Voting Rights Update
Jan 14, 2025

Severfield PLC announced a transaction in its own shares, as authorized at the 2023 Annual General Meeting and previously announced in April 2024. The company purchased 100,000 ordinary shares at the London Stock Exchange at a consistent price of 46.82 pence per share, with plans to cancel these shares. This move affects the total number of voting rights within the company, which stands at 296,646,987 as of January 13, 2025, and may impact shareholder notifications regarding interests in the company.

Severfield Executes Share Buy-Back to Optimize Capital Structure
Jan 13, 2025

Severfield plc has undertaken a share buy-back program, as authorized by its shareholders at the 2023 Annual General Meeting. On January 10, 2025, the company purchased 150,000 ordinary shares on the London Stock Exchange, with prices ranging from 48.00 to 48.50 pence per share. The purchased shares will be canceled, and the current total voting rights in the company amount to 296,746,987. This transaction is part of Severfield’s strategy to manage its capital structure and could impact shareholder interests.

Severfield Executes Share Buy-Back, Cancelling 100,000 Shares
Jan 9, 2025

Severfield PLC has executed a share buy-back transaction, purchasing 100,000 of its ordinary shares at an average price of 50.10 pence per share on the London Stock Exchange. This transaction, part of a previously announced program, results in the cancellation of the purchased shares, which will adjust the total number of voting rights and could impact shareholder interests as per regulatory guidelines.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.