Severfield’s (SFR) headline half-year profits declined on the prior year owing to a shift in the phasing of profits for ongoing work in the UK and Europe. Yet the structural steelwork specialist's order book for its core regions now stands 9 per cent higher, including a £20m contribution from last month's acquisition of Harry Peers, which caters to the nuclear, process industries and power generation sectors. Of this order book, £313m is for delivery over the next 12 months.
Severfield tends not to recognise profits until “they’re about halfway through the project”, said chief executive Alan Dunsmore. The group has yet to meet this threshold for many projects so far this year, meaning a heavier weighting for the second half once this has been achieved. Severfield’s execution of its projects, which includes the Google headquarters in Kings Cross, remains on track, he added. “We’ll see stronger profits come through at the second half on the back of that.”
House broker N+1 Singer forecasts full-year 2020 pre-tax profits of £27.6m and earnings per share of 7.4p, rising to £29.6m and 8p in 2021.
| SEVERFIELD (SFR) | ||||
| ORD PRICE: | 75p | MARKET VALUE: | £229.4m | |
| TOUCH: | 75-75.4p | 12-MONTH HIGH: | 78p | LOW: 61p |
| DIVIDEND YIELD: | 3.9% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 55p* | NET CASH: | £22.5m** | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 149 | 13.1 | 3.54 | 1.0 |
| 2019 | 132 | 8.2 | 2.27 | 1.1 |
| % change | -12 | -37 | -36 | +10 |
| Ex-div: | 12 Dec | |||
| Payment: | 10 Jan | |||
| *Includes intangible assets of £54.7m, or 18p a share | ||||
| **Excludes lease liabilities of £12m | ||||
