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Severfield Rowen

September 2009

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • SFR
  • Price:
  • 185.25p
Severfield has announced a commendable set of interim results given the difficult construction markets with a pretax profit of £24.6m and eps of 19.5p, a reduction of just 3% on H1 08. This was achieved on revenue in the period of £200m, an increase of 15%, so clearly the additional volumes have been at the expense of margins, which fell from 15.6% to 12.7%. Net borrowings during the period fell to £12m from £15.6m six months earlier. For 2010, the overall demand outlook for structural steelwork in the UK is poor with Severfield expecting it to decline to around 55% of the levels prevailing in 2008. Order book at the period end was £256m, down from £431m. That said, the second half is expected to be ahead of expectations mai ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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