Gove bounces back into the housing department

Company research

Severfield (SFR, 51p, £159m mkt cap) – SFR is a client of PERL

Britain’s leading structural steel group, with sales to Europe and a rapidly growing Indian JV. Thematic 32-page note on current and long-term trends in the group’s end markets around themes of security, decarbonisation and lifestyle/political changes, Opportunities abound amid new world order:

“Prospects for Severfield, the UK’s top steel construction specialist, should be underpinned not only by existing markets including infrastructure and datacentres but also, longer term, by three key themes: security, decarbonisation and lifestyle changes. The group’s specialist skills ideally place it for new nuclear, green energy and ‘gigafactories’. This wide-ranging note peers over the horizon to Severfield’s longer-term opportunities.”

Company news

Nexus Infrastructure (NEXS, 135p, £62m)

Provider of infrastructure services, utilities connections and smart energy. FY (Sep) trading update. Guidance: “Operating profit is expected to be in the range stated in the 9 August trading update, £3.8m – £4.2m.  Trading: Rev +25%, £173m, with growth achieved in all divisions (TriConnex, +10%; eSmart +86%; Tamdown +26%). Order book +10%,£316m,  “with work winning continuing across all three divisions”. YE net cash (pre-IFRS 16), £24.2m (YE 21, £18.1m). Outlook: “Nexus has a strong balance sheet plus a growing order book, with the group continuing to see high levels of demand for its services”. FY results, 9 December.

Galliford Try Holdings (GFRD, 167p, £184m)

UK construction and infrastructure services group. Contract. The Building division has been awarded a £65m contract to build an industrial facility in Blyth, Northumberland. JDR Cable Systems, part of the TFK Group, has appointed the business to construct a 69,000 sq m factory to produce undersea cabling that connects off-shore electricity production to the mainland grid.

In other news …

Politics. Michael Gove has been reappointed to Secretary of State for the Department for Levelling Up, Housing and Communities (DLUHC) by new PM Rishi Sunak, just over a year after Boris Johnson sacked him.

Viewpoint: I was told some months ago by a lobbiest, while Johnson was still in charge, that Gove still cherished the job, which he remains committed to. The move should, on balance, be seen as positive for most in the housing and building sectors. Johnson’s election winning ‘Levelling-up’ mantra could have been quietly brushed under the carpet by Sunak, but he emphasized the two words in his speech and manifesto commitments on the steps of Number 10 and then appointed one of the Conservatives’ undoubted ‘big hitters’. This suggests that ‘Investment Zones’ and general commitments to housebuilding volumes will be maintained. However, while in the role last time, Gove did take a combative stance with the volume housebuilders in terms of the financial liability for recladding work.