Upwards trend in construction output stutters in April | SFR
Severfield (SFR, 61p, £189m mkt cap) – SFR is a client of PERL
Britain’s leading structural steel group, with sales to Europe and a rapidly growing Indian JV. FY (Mar) results. (Read Progressive’s note: FY23 margins and cash beat expectations)
“Severfield’s adjusted PBT for the year to 25 March 2023 rose by 20%, beating our estimate by 4.1%, and there was significantly stronger cashflow. For now, we maintain our estimates. However, as discussed in our April note, the Project Horizon digitisation and other initiatives, plus growth potential in Europe and India, suggest upside to our FY25E forecasts. We also argue that greater revenue transparency offers the potential for a re-rating.”
Construction output. Monthly construction output fell by 0.6% M/M in volume terms in April but, on a rolling three-month basis the period experienced the eighth consecutive increase, according to latest data from the ONS . The decrease in monthly output came from a 1.0% decrease in new work, slightly offset by a 0.1% increase in repair and maintenance. Five out of the nine sectors covered saw a fall, with the main contributors private housing repair and maintenance (-5.7%) and private housing new work (-3.0%). Output rose 1.6% in the three months to April, coming solely from a rise in repair and maintenance (5.7%), as new work saw a decrease of 0.9%.
Prices are as at the previous day’s close. Where quoted, net debt is pre-IFRS16 (excluding leases) unless otherwise stated.
This communication is provided for information purposes only, and is not a solicitation or inducement to buy, sell, subscribe, or underwrite securities or units. Investors should seek advice from an Independent Financial Adviser or regulated stockbroker before making any investment decisions. Progressive Equity Research Ltd (“PERL”) does not make investment recommendations.
Opinions contained in this communication represent those of PERL and/or our affiliates at the time of publication and PERL does not undertake to provide updates to any opinions or views expressed. PERL does not hold any positions in the securities mentioned in this communication, however, PERL’s directors, officers, employees, contractors and affiliates may hold a position, and/or may perform services or solicit business from, any of the companies or related securities mentioned.
Any prices quoted in our research are as at the previous day’s close.