Severfield (SFR) H2 2024 earnings summary

Executive summary

• Underlying profit before tax rose 13% to £36.5m, exceeding expectations despite a 6% revenue decline to £463m, reflecting softer market conditions.

• High-quality, diversified UK and Europe order book at £478m, with a growing share of European projects and a record India order book of £181m.

• Strategy remains unchanged, focusing on growth in green energy, operational excellence, and expanding Indian presence.

Financial highlights

• Revenue decreased 6% year-over-year to £463.5m; underlying operating profit up 14% to £37.7m.

• Underlying basic EPS increased 5% to 8.9p; total dividend up 9% to 3.7p, marking a decade of progressive dividends.

• Net debt at £9.4m, with operating cash conversion at 110% and working capital inflow of £11m.

• Return on capital employed (ROCE) improved to 17.5% from 15.8% last year.

Outlook and guidance

• Strong order books provide good profit visibility through 2025; expectations for FY2025 remain unchanged.

• Well positioned in markets with long-term growth, especially those linked to the green energy transition.

• India offers significant value creation opportunities, supported by robust economic growth and sector demand.