24th Apr 2025 19:07
(Alliance News) - Severfield PLC on Thursday said it expects pretax profit in line with internal guidance for the full year, and noted its "solid" order book.
Shares in Severfield closed 23% higher at 24.50 pence on Thursday in London.
The York, England-based structural steel contractor commented: "Whilst we continue to see a good pipeline of project opportunities, the market backdrop in the UK and Europe remains challenging, with pricing remaining at tighter levels for longer than expected in a competitive market and some projects not being awarded or progressing within normal timescales, all of which is consistent with the current lower level of business confidence in the UK economy as a whole."
Consequently, Severfield said its outlook for the year ending March 30, 2026 is unchanged from that given in early March.
At that point, the company cut short a GBP10 million share buyback programme and said it expected 2026 underlying pretax profit to be lower than its revised financial 2025 guidance of between GBP18 million and GBP20 million.
On Thursday, Severfield reiterated this underlying pretax profit guidance range for the year ended March 30. This would be a decrease from GBP23.0 million in financial 2024.
Its net debt was GBP44 million, "better than expectations", at March 29.
Severfield also said its UK & Europe order book, GBP440 million at April 1, "remains solid" and "well-diversified". Its India order book meanwhile "is at record levels" or GBP210 million as of April 1.
Moreover, the company said it recently completed a headcount review and intends to reduce its headcount by around 6%, and has "an even stronger than normal focus on cash generation and conservation".
"We continue to take appropriate cost reduction actions to mitigate the effects of the trading pressures the group is currently facing," the company said.
Finally, Severfield said it has "already secured some attractive large projects for FY27" and sees "seeing significant future opportunities in sectors such as manufacturing (industrial), commercial offices, including the emergence of several planned large developments in London, and data centres, driven by artificial intelligence ('AI') applications which are driving even greater dependence on data centre infrastructure".
"Our prospects across these markets provide the board with confidence that the group will deliver attractive shareholder returns in the future and our medium term growth targets remain unchanged," Severfield concluded.
By Emma Curzon, Alliance News reporter
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