Severfield (LSE:SFR) said it expects underlying profit before tax of around £10.2m for the 2026 financial year, broadly in line with current market expectations. The company also anticipates net debt of approximately £28m by year-end, which would come in significantly better than consensus forecasts and leave roughly £39m of headroom within its financing facilities.
The group reported a UK and Europe order book of £438m, while its Indian operations have reached a record order book of £331m. Expansion work at its Gujarat facility remains on schedule. However, softer market conditions and increasing pricing pressure—particularly across the UK and European markets—have pushed the start of several major projects into the latter part of FY27.
Looking ahead, Severfield now expects underlying profit before tax for FY27 to fall within the range of £12m to £15m. The guidance reflects a cautious outlook as the company navigates macroeconomic and geopolitical uncertainty, delayed project mobilisation and ongoing pricing challenges across key markets.
New management has begun implementing a strategic review aimed at strengthening the business and improving long-term performance. As part of this process, the group has already taken steps to exit its non-core Modular Solutions division. Meanwhile, remediation work on bridge projects is continuing, with substantial insurance recoveries expected to offset associated costs.
Management believes these measures will help safeguard margins, maintain operational utilisation and support longer-term growth, particularly in the Indian market where demand for structural steel solutions remains strong.
Despite these strategic efforts, Severfield’s outlook remains constrained by declining revenues and weaker profitability. While some technical indicators and corporate developments offer limited positives, valuation metrics and liquidity pressures continue to weigh on investor sentiment. The company’s relatively high dividend yield and alignment of management incentives with shareholder interests nevertheless provide some potential support for future improvement.
More about Severfield
Severfield is the UK’s leading structural steel specialist, providing design, fabrication and construction services across a wide range of sectors including industrial, commercial, stadia, leisure, data centres, retail, healthcare, education, nuclear, power and transport. The company operates six production facilities with an annual capacity of around 150,000 tonnes and employs approximately 1,800 people. In India, Severfield participates in the growing structural steel market through a joint venture with JSW Steel.
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