Severfield – after 42% loss last year, now in a ‘transition year’ this group’s shares up 40% in six weeks, reporting significant UK and European data centre project wins

Mark Watson-Mitchell - 29.07.2026

This morning Severfield (LON:SFR) has issued a Trading Update ahead of its AGM later today.

Six weeks ago, on Friday, 19^th June, I reviewed the 2026 results and concluded that based on analyst estimates, coupled with the strength being shown by the syndicate of banks in providing strong banking facilities, together with its Order Book, I was attracted to the group and its prospects.

I commented that this company will see greater recovery in the next few years, making its shares, then trading at 26.80p, something of a ‘bargain basement offer’ and one which probably was not to be missed, considering that they could well trade the 32p to 36p range within months.

So, the subsequent 44% rise in price to 38.65p a month later, was a bonus for SQC Research followers who took advantage of what was then on offer.

They are now 37.40p - but is that as far as it goes?

Actually, it has a lot further to climb yet – perhaps not back up to the 320p level of 19 years ago, but I can see them easily breaking above the 50p level and then trading the 52p to 57p price range.

It is well worth noting that the group has continued to build momentum in its UK and Europe operations, securing a number of significant project wins, principally in the data centre sector in the UK, Germany and Sweden.

The Business

Originally founded in 1978 as Severfield-Reeve, today Severfield is the largest specialist structural steelwork group in the UK and among the biggest in Europe. 

The group, which is based at the Dalton Airfield Industrial Estate near Thirsk in Yorkshire, is a market leader in the design, fabrication and construction of structural steel, with a total capacity of around 150,000 tonnes of steel per annum.

Since its inception, the group has been involved in numerous high-profile projects including Coal Drops Yard, the Tottenham Hotspur Stadium, 22 Bishopsgate and Western Europe’s tallest skyscraper, The Shard.

It has been listed on the Main Market since 1995, and has become synonymous with innovation, high volume capacity and advanced engineering expertise.

The group has a long and successful history of handling steelwork projects across multiple sectors, from the highly complex to basic structural work, and ensuring on-time and on-budget completions as standard.

It has six sites, with some 1,800 employees and expertise in large, complex projects across a broad range of sectors.

Additionally, it also has an established presence in the expanding Indian market through its joint venture partnership with India's largest steel producer, the JSW Steel group.

Severfield delivers steel superstructures through its Core Construction Operations, separated operationally into a Commercial and Industrial division (bringing together its strong capabilities in the industrial and distribution, commercial offices, stadia and leisure, data centres, retail, and health and education market sectors), which includes its European operations, and a Nuclear and Infrastructure division (encompassing its market-leading positions in the nuclear, power and energy, road and rail transport, and process industries sectors).

The AGM Trading Update

The group has today issued a Trading Update reporting a positive start to FY27, with trading in line with expectations and unchanged guidance for underlying profit before tax of £12m-£15m.

The company's order book increased to £534m as of Wednesday, 1^st July, with £375m scheduled for delivery within the next twelve months, driven by significant project wins in the data centre sector across the UK and Europe.

Continental Europe now represents 32% of the UK and Europe order book, indicating expansion.

In India, the joint venture JSSL saw its order book grow to £327m, supported by data centre projects and orders from JSW.

FY27 is considered a transition year, with higher-margin projects expected to contribute more significantly from later in the year and into FY28.

Management Comment

Recently appointed CEO Paul McNerney stated that:

"We have made a positive start to FY27, with trading in line with expectations and guidance unchanged.

Recent project wins, particularly in data centres, have strengthened our UK and Europe and Indian order books, which provides good visibility for FY27 and beyond.

FY27 remains a transition year as we complete lower-margin work, but the improving quality of our order book and progress with our transformation programmes support our confidence in medium-term margin recovery.

We look forward to updating the market further with our half-year results in November."

The Equity

There are some 296.2m shares in issue.

The larger holders include J.O. Hambro Capital Management (12.91%), M&G Investment Management (8.53%), Artemis Investment Management (7.80%), Aberforth Partners (6.81%), Unicorn Asset Management (6.08%), Chelverton Asset Management (5.46%), Legal & General Investment Management (5.20%), Invesco Asset Management (5.18%), Aberdeen Investments (4.83%), and Threadneedle Asset Management (3.77%).

Analyst Views

Four analysts follow the group, with three calling the shares as a Buy, the other as a Hold.

The consensus average Target Price is 44p a share, the Lowest is for 40p, the Highest 48p.

Analysts Joe Brent and Joe Walker, at Panmure Liberum, headline today’s Buy note - ‘Trading in line; strength in data centres’ - considering that its shares are cheap given the recovery potential, their Target Price is 48p.

For the current year to end-March 2027, they look for £480m (£454m) sales, with pre-tax profits leaping 24% to £13.0m (£10.5m), lifting earnings 33% to 3.6p (2.7p) per share.

Looking into the next year, to March 2028, they see £534m sales, £17.0m profits and 4.7p earnings.

The 2029 estimates are for £558m sales, £23.0m profits and 6.3p per share in earnings.

Analyst Alastair Stewart, at Progressive Equity Research, has estimates for the 2027 year with revenues at £499.7m, with adjusted pre-tax profits of £13.0m, and earnings of 3.5p per share.

For 2028 he sees £549.6m sales, £16.4m profits and 4.4p of earnings.

Over at Edison Investment Research, analyst Jonathan Day has estimates for the current year for £472.4m revenues, £13.2m profits and 3.35p per share in earnings.

The recent Buy note from Jefferies is for a TP of 40p, while analyst Greg Poulton, at Singer Capital Markets has a 42p TP on his research, noting that the group is transitioning back to profitable growth.

My View

I do like the group’s potential as it concentrates its strength in the Data Centres, Power, and Transport Infrastructure sectors.

The shares, now 37.40p, may well drift for a while but I expect them to respond well to contract win news in due course, helping to push them over the 50p barrier.

(Profile 19.06.26 @26.80p set a Target Price of 33.50p*)

Breaking above 50p soon?