Severfield (SFR) AI Stock Analysis

• Market Cap: £60.52M
• Dividend Yield: 17.96%
• Average Volume (3M): 1.63M
• Price to Earnings (P/E): 19.3
• Beta (1Y): 1.06
• Revenue Growth: 6.00%
• EPS Growth: -84.54%
• Country: UK
• Employees: 1,900
• Sector: Industrials
• Sector Strength: 66
• Industry: Engineering & Construction
• EPS (TTM): 0.01
• Shares Outstanding: 296,181,980
• 10 Day Avg. Volume: 1,968,063
• 30 Day Avg. Volume: 1,631,870
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.15
• Price to Cash Flow (P/CF): 1.90
• P/FCF Ratio: 1.90
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: £41.00
• Price Target Upside: 102.97% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

Severfield's overall stock score reflects a balance of stable financial health and attractive valuation against a backdrop of challenging market conditions. The company's strong equity position and high dividend yield are positives, but technical indicators and recent profit warnings indicate caution. Corporate events suggest potential for long-term growth, but immediate market conditions remain challenging.

Positive Factors

Growth Opportunities

Analyst remains positive on the group's recovery potential and long-term growth opportunity.

Leadership Transition

An interim leadership team has been put in place to ensure stability during the transition.

Negative Factors

Financial Performance

This week's profit warning highlighted that management has a number of near-term challenges to navigate, and some uncertainties remain.

Market Conditions

End market conditions are tougher-than-expected, with tighter-than-expected pricing and project delays/cancellations.

Severfield Business Overview & Revenue Model

Company Description

Severfield (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 Money

Severfield 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

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

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

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 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
463.46M	491.75M	403.56M	363.25M	327.36M
	Gross Profit
97.46M	73.84M	51.56M	63.14M	60.07M
	EBIT
26.41M	29.47M	21.83M	22.39M	25.56M
	EBITDA
41.07M	38.55M	33.09M	31.13M	31.16M
	Net Income Common Stockholders
15.90M	21.57M	15.60M	17.30M	20.41M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
13.80M	11.34M	0.00	24.98M	44.34M
	Total Assets
378.41M	369.67M	375.48M	342.50M	335.39M
	Total Debt
42.48M	22.35M	26.49M	31.86M	39.36M
	Net Debt
28.68M	11.01M	26.49M	6.88M	-4.98M
	Total Liabilities
157.66M	151.95M	171.52M	151.57M	151.71M
	Stockholders Equity
220.75M	217.72M	203.96M	190.93M	183.68M
Cash Flow		Free Cash Flow
33.81M	41.33M	-12.13M	18.03M	14.92M
	Operating Cash Flow
45.14M	47.80M	-6.74M	24.65M	21.38M
	Investing Cash Flow
-37.45M	-14.69M	-5.54M	-26.45M	-19.59M
	Financing Cash Flow
-8.63M	-17.80M	-16.68M	-17.56M	17.56M

Severfield Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 20.20
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 20.2 is below the 20-day moving average (MA) of 20.70, below the 50-day MA of 30.96, and below the 200-day MA of 59.45, indicating a bearish trend. The MACD of -2.61 indicates Negative momentum. The RSI at 36.61 is Neutral, neither overbought nor oversold. The STOCH value of 55.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:SFR.

Severfield Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GFRD	77 Outperform	£366.73M	9.31	35.97%	4.53%	22.39%	179.53%
KIE	74 Outperform	£560.70M	13.13	10.20%	3.92%	8.04%	6.94%
BBY	73 Outperform	£2.17B	12.63	15.35%	2.73%	3.02%	-3.23%
CRH	73 Outperform	£57.44B	16.90	16.07%	1.73%	1.78%	15.53%
SFR	64 Neutral	£60.52M	19.25	1.55%	17.96%	6.00%	-84.54%
Sector *	62 Neutral	$4.13B	11.17	5.46%	215.76%	4.12%	-8.54%

Severfield Corporate Events

Severfield Announces Share Capital and Voting Rights Update

Severfield plc, a company specializing in structural steelwork, announced an update regarding its voting rights and share capital. The company has 296,181,987 ordinary shares in issue, each granting one vote at general meetings, which stakeholders can use to calculate their interest in accordance with the FCA’s rules.

Severfield’s Recovery Prospects Highlighted in New Research

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.

Severfield CEO Alan Dunsmore to Step Down, Search for Successor Underway

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.

Severfield PLC Announces Board Member’s New Appointment

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.

Severfield Cancels £10 Million Share Buyback Programme

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.

Severfield Faces Market Challenges but Eyes Future Growth Opportunities

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.

Severfield Faces Market Challenges but Eyes Future Opportunities

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.

Severfield Executes Share Buy-Back and Adjusts Voting Rights

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.

Severfield Executes Share Buy-back, Adjusts Voting Rights

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.

Severfield Announces Share Buyback and Voting Rights Update

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.