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Severfield (GB:SFR)
LSE:SFR

Severfield (SFR) AI Stock Analysis

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Severfield

(LSE:SFR)

Rating:68Neutral
Price Target:
Severfield's stock score reflects a stable financial position with a strong balance sheet and a high dividend yield, offset by challenges in revenue growth and free cash flow stability. Technical analysis shows mixed signals, while positive corporate events suggest confidence and potential for future growth. Despite a high P/E ratio, the attractive dividend yield provides a strong incentive for investors.
Positive Factors
Order Book Improvement
Order books are improved in both the UK/Europe and the Indian JV.
Valuation
The shares are particularly cheap with an annualised FY26F PER of 6.6x.
Negative Factors
Leadership Transition
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.
Profit Warning
This week's profit warning highlighted that management has a number of near-term challenges to navigate, and some uncertainties remain.

Severfield (SFR) vs. iShares MSCI United Kingdom ETF (EWC)

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
Positive
Last Price35.10
Price Trends
50DMA
26.30
Positive
100DMA
33.63
Positive
200DMA
51.95
Negative
Market Momentum
MACD
2.22
Negative
RSI
68.56
Neutral
STOCH
78.77
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:SFR, the sentiment is Positive. The current price of 35.1 is above the 20-day moving average (MA) of 32.42, above the 50-day MA of 26.30, and below the 200-day MA of 51.95, indicating a neutral trend. The MACD of 2.22 indicates Negative momentum. The RSI at 68.56 is Neutral, neither overbought nor oversold. The STOCH value of 78.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:SFR.

Severfield Peers Comparison

Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
GBBBY
78
Outperform
£2.51B14.6115.35%2.48%3.02%-3.23%
CRCRH
78
Outperform
£61.44B19.6415.72%1.68%2.11%3.37%
GBKIE
77
Outperform
£724.74M17.0010.20%3.22%8.04%6.94%
77
Outperform
£390.79M10.1335.97%4.25%22.39%179.53%
GBTW
68
Neutral
£4.00B18.204.92%8.37%-3.22%-37.21%
GBSFR
68
Neutral
£102.82M33.271.55%10.57%6.00%-84.54%
66
Neutral
$4.48B12.265.32%248.53%4.10%-12.36%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:SFR
Severfield
35.10
-30.64
-46.61%
GB:KIE
Kier Group plc
169.00
32.93
24.20%
GB:TW
Taylor Wimpey
114.20
-24.97
-17.94%
GB:BBY
Balfour Beatty
499.20
148.17
42.21%
GB:GFRD
Galliford Try
410.50
169.59
70.40%
CRH
CRH plc
92.54
15.90
20.75%

Severfield Corporate Events

Business Operations and Strategy
Severfield’s Non-Executive Chair Acquires Shares, Indicating Confidence
Positive
Apr 25, 2025

Severfield plc announced a market purchase transaction involving its Non-Executive Chair, Charlie Cornish, who acquired 103,125 ordinary shares at a price of £0.24 each. This transaction, conducted on the London Stock Exchange, reflects a strategic move by a key company figure, potentially signaling confidence in the company’s future prospects.

Spark’s Take on GB:SFR Stock

According to Spark, TipRanks’ AI Analyst, GB:SFR is a Neutral.

Severfield’s overall stock score reflects a balance of stable financial health and attractive dividend yield against a backdrop of challenging market conditions and mixed technical indicators. While the company has a strong equity position and robust order book, the high P/E ratio and recent profit warnings suggest caution. Long-term growth prospects are positive, supported by strategic initiatives and a focus on high-demand sectors.

To see Spark’s full report on GB:SFR stock, click here.

Business Operations and StrategyFinancial Disclosures
Severfield’s Positive Outlook Amid Challenging Markets
Positive
Apr 24, 2025

Severfield PLC has commissioned Progressive Equity Research to provide ongoing research coverage, with a new research document released to UK investors. The company’s year-end update for the 12 months to March 29 indicates that FY25E profits are expected to be in line with previous guidance, while net debt has improved and the order book has increased by 9%. Despite challenging market conditions, Severfield maintains its forecasts for FY26E and FY27E, suggesting a compelling valuation at 3.7x PER.

Spark’s Take on GB:SFR Stock

According to Spark, TipRanks’ AI Analyst, GB:SFR is a Neutral.

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.

To see Spark’s full report on GB:SFR stock, click here.

Business Operations and StrategyFinancial Disclosures
Severfield Reports Stable Profit Forecasts and Robust Order Book Amid Market Challenges
Positive
Apr 24, 2025

Severfield plc has issued a trading update for the year ended March 29, 2025, indicating that its underlying profit before tax is expected to align with previous forecasts, ranging between £18m and £20m. The company has managed to reduce its net debt better than expected and is taking cost reduction measures, including a 6% reduction in headcount, to address trading pressures. The order book remains robust, with significant projects secured in the UK, Europe, and India, reflecting strong market demand, particularly in India. The bridge remedial works are progressing as planned, with insurance coverage confirmed. Despite a challenging market environment in the UK and Europe, Severfield is optimistic about future opportunities, particularly in sectors like manufacturing, commercial offices, and data centers, driven by AI applications.

Spark’s Take on GB:SFR Stock

According to Spark, TipRanks’ AI Analyst, GB:SFR is a Neutral.

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.

To see Spark’s full report on GB:SFR stock, click here.

Other
Severfield Announces Share Capital and Voting Rights Update
Neutral
Apr 1, 2025

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.

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.

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.