Shares plummet at Severfield after second profit warning
North Yorkshire-based structural steel group, Severfield saw almost 50% wiped off its value today amid project delays and cancellations in tough market conditions.
In a trading update for the year ending 29 March 2025, the group says it now expects underlying profit before tax for the full year to be in the range of £18m to £20m.
Following the news that market conditions have shown “no signs of improvement”, Severfield shares fell more than 48% to 26.4p in early trading.
Severfield warned in November that its profits for the year to 31 March 2025 would be below its previous expectations. The business notes in its interim results on 26 November 2024, it highlighted that the market backdrop in the UK and Europe was “challenging”.
One of its large projects, for which production was expected to start in January, has been recently delayed until early FY26.
Severfield’s UK and Europe order book as of 1 February 2025 – excluding this large project for which the full order has yet to be received – was worth £403m, of which £281m is for delivery over the next 12 months (1 November 2024: £410m, of which £307m was for delivery over the next 12 months).
The group adds that despite measures it has taken in response to the challenging climate, it has not been possible to secure sufficient work in the short term to fully offset the non-recovery of factory overheads in quarter four.
In its outlook statement, the firm explains: “While we continue to see a good pipeline of project opportunities, client decision-making continues to be deferred and projects are not being awarded or progressing within normal timescales, consistent with the current lower level of business confidence in the UK economy as a whole.
“This, in tandem with the absence of large ‘anchor’ projects in the order book and a general market backdrop which is not expected to improve in the short-term, is having a consequential impact on FY26.
“The group is seeking to mitigate the ongoing impact of these market conditions through ongoing cost reduction actions.
“As such, underlying profit before tax for FY26 is now expected to be below our revised expectations for FY25.”
Looking further ahead, Severfield says it has already secured some attractive large projects for FY27, and it is also seeing future large opportunities in sectors such as data centres, manufacturing (industrial) and commercial offices, including the emergence of several planned large developments in London.
The group says it remains well positioned to win work in markets with positive long term growth trends, including those which are driving the green energy transition.
