2 December 2025

Interim results for the period ended 27 September 2025

Diversified order books support unchanged expectations for FY26, improved net debt position, well-positioned in markets with positive long-term growth trends

Severfield plc, the market-leading structural steel group, announces its results for the six-month period ended 27 September 2025.

Headlines

§  Diversified UK and Europe order book of £429m at 1 November (1 July: £444m), of which £324m is for delivery over the next 12 months

§  Underlying¹ profit before tax of £0.6m (H1 2025: £16.1m) reflects lower volumes and challenging market conditions

§  Reduction in period-end net debt (on a pre-IFRS 16 basis²) to £21.7m (29 March 2025: £43.1m), includes amortising term loans of £13.8m

§  Bridge remedial works programme progressing in line with expectations; receipt of £20.0m insurance proceeds

§  Improved H1 results and continued strategic progress in India - record JSSL order book of £286m at 1 November (1 July: £240m), new production facilities in Gujarat expected to be operational in FY26

§  Revolving credit facility extended to December 2027, alongside share purchase option agreement with JSW Steel, provides enhanced liquidity and financial flexibility

§  New executive management team to drive future growth

Outlook

§  UK and Europe:

-    Market for structural steelwork remains subdued and competitive bidding environment continues to drive tighter prices

-    Tendering activity is improving, principally in the distribution and data centre sectors

-    We continue to see some attractive large-scale projects coming to market, particularly for FY27 and beyond

§  India: we are well-positioned to take advantage of significant growth opportunities, with new markets being targeted, and a very encouraging outlook for structural steel

§  New Strategy and Transformation Director appointed to support future growth

§  We remain well-positioned to win work in markets and sectors with excellent longer-term growth opportunities, including within Energy and Infrastructure

§  The Group has good visibility over H2 revenues through orders already secured in the £429m order book

§  Management expectations for FY26 are unchanged

Paul McNerney, Chief Executive Officer commented:

"I am delighted to have joined Severfield at a pivotal time in its journey. The Group has a proud heritage, strong values and deep technical capability, underpinned by resilient core operations across a diversified range of market sectors. I have worked with Severfield closely throughout my career, including most recently at the Bramley-Moore Dock Stadium in Liverpool, and I know first-hand that our teams can deliver a world class service for our customers."

"Since joining, I have initiated a strategic review of our markets, operations and organisational structure and I look forward to presenting the findings of this review in 2026. I have also engaged with a wide range of current and former customers, and it has been encouraging to hear such strong support for Severfield and the confidence they have in our expertise and delivery."

"I am focused on redefining our strategy, strengthening our manufacturing and delivery capabilities, driving greater efficiency, and on bringing an absolute focus on engineering excellence for our customers - ensuring we are well positioned for future growth. I look forward to working with the Board and the wider team to grow the business and deliver sustainable value for all stakeholders."

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Notes to financials:

¹ Stated before non-underlying items of £8.2m (H1 2025: £21.9m) including bridge testing and remedial costs of £nil (H1 2025: £20.4m), other bridge related costs of £3.3m (H1 2025: £nil), refinancing-related costs of £1.4m (H1 2025: £nil), the amortisation of acquired intangible assets of £1.3m (H1 2025: £1.3m) and other non-underlying costs of £2.2m (H1 2025: £0.2m). Non-underlying items have been separately identified by virtue of their magnitude or nature to enable a full understanding of the Group's financial performance and to make year-on-year comparisons. They are excluded by management for planning, budgeting and reporting purposes and for the internal assessment of operating performance across the Group and are normally excluded by investors, analysts and brokers when making investment and other decisions (see note 7).

² The Group excludes IFRS 16 lease liabilities from its measure of net funds/debt as they are excluded from the definition of net funds/debt as set out in the Group's borrowing facilities.

³ Except as otherwise stated '2025 and FY25' refer to the 52-week period ended 29 March 2025. '2026 and FY26' and '2027 and FY27' refer to the 52-week periods ending 28 March 2026 and 27 March 2027. The Group's accounts are made up to an appropriate weekend date around 31 March each year.

A reconciliation of the Group's underlying results to its statutory results is provided in the Alternative Performance Measures ('APMs') section (see note 17).

Notes to editors:

Severfield is the UK's market leader in the design, fabrication and construction of structural steel, with a total capacity of c.150,000 tonnes of steel per annum. The Group has seven sites, c.1,800 employees and expertise in large, complex projects across a broad range of sectors. The Group also has an established presence in the expanding Indian market through its joint venture partnership with JSW Steel (India's largest steel producer).

The Group delivers steel superstructures through its Core Construction Operations, separated operationally into a Commercial and Industrial division (bringing together the Group's strong capabilities in the industrial and distribution, commercial offices, stadia and leisure, data centres, retail, and health and education market sectors), which includes our European operations, and a Nuclear and Infrastructure division (encompassing the Group's market-leading positions in the nuclear, power and energy, transport (road and rail) and process industries sectors). The Group's Modular Solutions division consists of the growing product ranges of Severfield Modular Solutions ('SMS') and of Construction Metal Forming ('CMF'), our specialist cold rolled steel joint venture business.

INTERIM STATEMENT

INTRODUCTION

The results for the first half of FY26, which are in line with expectations, reflect a continued challenging market backdrop across the UK and Europe. Financial performance in H1 was impacted by lower levels of activity across the Group, driven by subdued demand, some contract delays, and a sustained period of tighter pricing, particularly for near-term work. Despite these headwinds, we have recently secured a number of significant new projects, now reflected in our diversified order books, which underpins our confidence in a stronger performance in the second half. In addition, during the period we have continued to progress work on several major projects, including the Agratas battery gigafactory in Somerset, set to supply batteries for Jaguar Land Rover and Tata Motors, an Energy from Waste facility in London, and 'Project ONE', a new large-scale plant for INEOS in the Port of Antwerp, Belgium.

Looking ahead, our businesses remain well positioned to secure work in markets with strong long-term growth dynamics, particularly in heavily invested infrastructure and energy sectors, including Nuclear and those supporting the green energy transition. This provides a strong platform from which to deliver our growth ambitions.

In response to the current trading pressures, we continue to implement appropriate cost reduction and cash conservation measures to support a strong balance sheet and drive improvements in ROCE. Net debt (pre-IFRS 16) at the period end was £21.7m, an improvement of c.£21m since year-end. This comprised amortising term loans of £13.8m and RCF drawings of £8.0m, providing facility headroom of over £50m as at 27 September 2025. In H2, the Group expects cash payments to include around £10m of bridge remedial costs, provided for in FY25, approximately £6m of term loan repayments, and the partial unwind of the temporarily low working capital position at the end of September 2025. Notwithstanding the focus on strong operational cash generation, the Board is prioritising the preservation of financial flexibility until market conditions improve and, as a result, is not declaring an interim dividend. The Board recognises the importance of the dividend to many shareholders and remains committed to resuming payments as soon as it is appropriate to do so.

In India, the construction sector, and the use of steel within construction, continues to grow strongly. This position is evident in JSSL's improved H1 results and the company's record order book at 1 November of £286m (1 July: £240m).

The bridge remedial works programme continues to progress in line with expectations. The previously announced insurance recovery of £20m, agreed with the Group's professional indemnity insurers, has now been fully received. The Group has recognised provisions for other bridge-related costs of £3.3m comprising third-party consequential costs and claims received since the FY25 results announcement in July.

OUTLOOK

The Group is on track to achieve its full year earnings expectations and has good visibility over H2 revenues through orders already secured in the order book

The market backdrop remains uncertain, reflecting subdued business confidence in the UK economy. This is leading to some projects, including key 'anchor' projects, either not being awarded or progressing more slowly than expected and, in the near term, reduced industry demand is contributing to significant pricing pressure. The Group's strong competitive position continues to support an improvement in tendering activity and a healthy pipeline of project opportunities, particularly for FY27 and beyond, with several already secured. The Group is also actively mitigating the impact of these market conditions through ongoing cost reduction and cash conservation measures, in support of a strong balance sheet. Working alongside the new Executive management team, the appointment of a Strategy and Transformation Director is intended to bring greater focus to and drive improvements in Severfield's operational efficiency and future growth.

Looking further ahead, we are seeing significant opportunities across sectors such as industrial manufacturing, commercial offices, including increased activity in London, and data centres, where demand is being accelerated by the growth of Artificial Intelligence ('AI') applications and the resulting reliance on data infrastructure. Many of our target markets continue to exhibit favourable long-term fundamentals. We hold a prominent position in sectors with strong growth potential and are well placed to secure projects that support the low-carbon transition and enhance energy security, aided by growing clarity around the UK's infrastructure agenda. In the Autumn budget, the UK Government has reaffirmed its commitment to infrastructure and its £725 billion 10-year infrastructure strategy and National Infrastructure Pipeline, which provides greater certainty for the industry, enabling the UK construction supply chain to plan more effectively and invest in capability. These prospects underpin the Board's confidence in the Group's ability to deliver attractive shareholder returns over the long term.

FINANCIAL REVIEW

*The references to underlying operating profit (before JVs and associates) and underlying profit before tax are defined in the 'notes to financials' and reconciled to the statutory measures in note 17.

Revenue of £206.0m (H1 2025: £252.3m) represents a decrease of £46.3m (18 per cent) compared to the prior period. This reflects a decrease in revenue from our Core Construction Operations, mainly representing lower production activity in the period. The underlying operating profit (before JVs and associates) of £2.3m (H1 2025: profit of £17.2m) represents a reduction in profit of £14.9m over the prior period. This reflects the reduction in revenue (and activity levels) which has resulted in the under recovery of fixed factory overheads, together with the impact of ongoing pricing pressure. The statutory operating loss (before JVs and associates), which includes non-underlying items, was £5.9m (H1 2025: £4.6m), a reduction in earnings of £1.3m over the prior period.

The share of profit from the Indian joint venture in the period was £1.0m (H1 2025: £0.1m). The significant improvement in H1 profit reflects increased revenue and a strong operating performance against a prior period comparative which was impacted by project delays around the Indian elections in June 2024.

The Group's underlying profit before tax was £0.6m (H1 2025: profit of £16.1m), a reduction in profit of £15.5m compared to the previous period. The statutory loss before tax was £7.6m (H1 2025: £5.8m), a reduction in profit of £1.8m over the prior period.

An underlying tax charge of £0.0m is reported for the period (H1 2025: charge of £3.9m). This tax credit is recognised based on the best estimate of the Group's average effective tax rate for the full financial year, which is consistent with the statutory rate in the UK and the Netherlands of c.25% (H1 2025: c.25%). The total tax credit of £2.0m (H1 2025: £1.5m) includes a non-underlying tax credit of £2.0m (H1 2025: £5.4m).

Underlying basic earnings per share is 0.2p (H1 2025: 4.0p). This calculation is based on the underlying profit after tax of £0.6m (H1 2025: £12.2m) and 295,586,440 shares (H1 2025: 307,188,953 shares) being the weighted average number of shares in issue during the period. Basic loss per share, which is based on the statutory loss after tax, is 1.9p (H1 2025: 1.4p).

Non-underlying items

Non-underlying items for the period of £8.2m (H1 2025: £21.9m) consisted of the following:

The bridge remedial works programme continues to progress in line with expectations. Since the year-end announcement, we have made good progress, with several programmes now complete and the remaining works progressing in line with expectations. The estimated cost of the testing and remedial programmes remain materially unchanged from those reported in the FY25 full-year results.

The Group is working closely with customers to deliver remedial programmes and has recognised a further £3.3m of provisions for certain third-party consequential costs. Whilst the Group continues to challenge certain elements of these claims, a conservative provision has been recognised. All third-party items, including those recorded in FY25, remain subject to continued detailed review, ongoing dialogue and legal process, as well as the application of contractual liability caps. In addition to the PI insurance recoveries already agreed, the Group continues to actively pursue all other potential avenues of recovery, including further insurance recoveries and contributions to our costs by third parties. However, no amounts have been recognised in respect of these further potential recoveries at this stage as these are not yet certain.

Refinancing-related costs of £1.4m were incurred in connection with the amendment and extension of the Group's core debt facilities in July 2025. These costs primarily consist of arrangement fees, legal fees, and advisory expenses, and reflect the extension of the facility's maturity to December 2027. The amortisation of acquired intangible assets of £1.3m represents the non-cash amortisation of customer relationships and order books which are being amortised over a period of 12 months to five years. Other non-underlying costs of £2.2m include certain one-off business transformation, legal and consultancy costs.

Cash flow and financing

Net debt (pre-IFRS-16 basis) at the period-end was £21.7m, which represented amortising term loans of £13.8m and RCF drawings of £8.0m, providing facility headroom of over £50m. In light of the current trading pressures, there is an enhanced focus on cash generation and conservation including careful working capital management, a reduction in planned capital expenditure, the disposal of certain non-core assets, and other ongoing cost reduction actions in support of a stronger balance sheet and our objective of improving ROCE.

Operating cash flow before working capital movements and bridge-remedial related costs was an inflow of £1.3m (H1 2025: £0.4m). Net working capital reduced by £13.4m, largely due to the unwind of contract investment on key projects. Working capital has been adjusted to exclude the impact of insurance proceeds and net movement in the provision for bridge testing and remedial cost in the period. Net capital proceeds of £1.6m (H1 2025: £3.1m expenditure), including £1.4m of capital expenditure and £3.0m of proceeds from the disposal of the mothballed ex-Harry Peers factory in Bolton, reflect a reduced capital investment programme consistent with the Group's focus on cash conservation. This compares to annual depreciation of £5.5m (H1 2025: £4.8m), of which £1.9m (H1 2025: £1.3m) relates to right-of-use assets under IFRS 16.

In July 2025, the Group successfully negotiated an amendment and extension to its existing £60m Revolving Credit Facility ('RCF') with its lenders, HSBC Bank and Virgin Money. The facility's maturity has been extended to December 2027, providing the Group with enhanced liquidity and financial flexibility. The Group remains committed to maintaining a strong financial position and, following this extension, confirms it has sufficient liquidity to meet its current and anticipated funding requirements. At the same time, the Group also entered into a share purchase option agreement with JSW Steel, its partner in the Indian joint venture, JSSL, granting it the right, but not the obligation, to dispose of an interest of up to 24.9 per cent in JSSL for up to £20m, exercisable, at its sole discretion, at any time on or before 31 March 2026. The option reflects the Board's prudent approach to strategic planning and provides the Group with additional financial flexibility if required. The Board confirms there is no current intention to exercise the option as JSSL remains a strategically important venture for the Group.

Pensions

The Group's net defined benefit pension liability at 27 September 2025 was £5.0m (scheme liabilities of £28.9m offset by scheme assets of £23.9m), a decrease of £1.9m from the year-end position of £6.9m. The deficit has reduced as a result of a higher discount rate, reflecting an increase in bond yields, lower inflation assumptions and employer deficit contributions over the period.

OPERATIONAL REVIEW

UK AND EUROPE

Maintaining a disciplined approach to contract selection and bidding remains central to the Group's strategy, ensuring a balanced risk profile across our order book. The vast majority of our projects continue to be secured through negotiated, framework, or two-stage procurement routes, consistent with our established principles of commercial discipline and robust risk management. As at 1 November, the UK and Europe order book stood at £429m (1 July: £444m), with £324m scheduled for delivery over the next 12 months. The order book remains well-diversified across our core market sectors, including continental Europe and Ireland, which represent 22 per cent of the total (1 July: 22 per cent), reflecting our strong market position and access to growth opportunities in these regions. During the first half of the year, we secured approximately £190m of new work across the UK and Europe, albeit some of these projects were secured at lower margins than historically achieved, reflecting ongoing pricing pressure and subdued demand for structural steelwork.

Many of our target markets continue to exhibit favourable long-term fundamentals. The Group holds a prominent position in sectors with strong growth potential and is well placed to secure projects that support the transition to a low-carbon economy and enhance energy security, aided by increasing clarity around the UK's infrastructure agenda. The UK Government has begun to make tangible progress toward its objective of stimulating economic growth through infrastructure investment, including support for private financing of public assets, planning reform, and initiatives in clean energy, transport, and critical national infrastructure, all of which are expected to benefit the Group. The Group is seeing increased activity in the London commercial sector and in data centres, where demand is being accelerated by the growth of AI applications and the resulting reliance on data infrastructure.

Looking ahead, future opportunities across our Commercial and Industrial and Nuclear and Infrastructure segments include battery manufacturing plants, energy-efficient buildings, renewable energy facilities, and offshore wind projects, alongside work in transport, nuclear, and the broader power and energy sectors. These opportunities align closely with the Group's core capabilities and have the potential to strengthen the quality and resilience of the future order book.

Core Construction Operations

Revenue of £199.3m (H1 2025: £247.2m) represents a decrease of £47.9m (19 per cent) compared to the prior period, reflecting lower activity levels in the current period. Underlying operating profit of £3.4m was down 80 per cent on the prior period (H1 2025: £17.1m), reflecting the impact of the current challenging market conditions, including lower revenue (and activity levels) which has resulted in the under recovery of fixed factory overheads, and tighter pricing in certain market sectors.

Commercial and Industrial

Revenue has decreased by 30 per cent to £143.5m (H1 2025: £205.0m), reflecting the impact of the lower levels of industry demand. Notwithstanding this, work progressed during the period on the battery gigafactory for Agratas in Somerset, which will initially supply batteries for Jaguar Land Rover and Tata Motors, together with ongoing works on the Energy from Waste facility in London, and the 'Project ONE' contract for INEOS in Antwerp. This represents the construction of a new ethane cracker (a steam cracker that converts ethane into ethylene for use in the chemicals industry) and is the largest investment in European chemicals industry in the past 25 years. We have also worked on a number of data centre projects including two for Google in Finland and a package of data centres in Sweden, together with various mid-sized office developments, mainly in London (including Salisbury Square, 105 Victoria, South Molton Triangle and the EDGE building, which is designed to be the most sustainable office tower in London).

The Commercial and Industrial order book at 1 November was £202m (1 July: £214m). This includes projects secured in the period such as new industrial facilities, commercial offices, data centres, and several distribution centres. Encouragingly, the short-cycle distribution sector is showing early signs of recovery, and recent wins in this area reflect renewed momentum in what has historically been an important market for the Group. We have already secured a number of attractive large-scale projects for FY27 and continue to see strong opportunity in sectors driving the green energy transition including energy-efficient buildings, renewable energy manufacturing facilities, offshore wind developments, and new battery gigafactories across the UK and Europe. The Group's engineering excellence, manufacturing scale, speed of construction, and proven on-time delivery leave us well positioned to win work on these projects, the majority of which are expected to be steel-intensive in design. Demand for data centres in the UK and Europe remains strong, and we are also seeing the emergence of a pipeline of large commercial office opportunities in London. We are currently tendering for several of these projects, with delivery expected to commence in FY27.

Nuclear and Infrastructure (N&I)

Revenue has increased by 32 per cent to £55.8m (H1 2025: £42.2m), reflecting increased activity levels driven by the large N&I order book coming into the financial year. During the period, the Group progressed several significant projects, including a process industries scheme in Hull and a major offshore wind contract with Ørsted for the Hornsea 3 development, marking a key step forward in our expansion into the renewables market. We also continued work on multiple road and rail bridge schemes for a range of clients, including the Black Cat bridge in Cambridgeshire, the Baker Viaduct on the Transpennine Route Upgrade, and the York Central bridges. In the nuclear sector, the Group continues to deliver work at Hinkley Point, including secondary steelwork and supply-only packages, alongside several large-scale projects at Sellafield.

The N&I order book at 1 November was £220m (1 July: £224m) of which 46 per cent (1 July: 48 per cent) represents transport infrastructure, 43 per cent (1 July: 42 per cent) represents power and energy (including nuclear) and 11 per cent (1 July: 10 per cent) represents process industries projects.

The outlook for the Group's core markets remains positive through the medium term. The UK Government has begun to make tangible progress with its objective to stimulate economic growth through infrastructure investment, including in Severfield's key growth areas of energy and transport infrastructure, both of which are central to the green energy transition. These ambitions were reaffirmed in June with the publication of the £725 billion 10-year infrastructure strategy and National Infrastructure Pipeline, which provide greater clarity and certainty for the construction industry as a whole.

In the UK energy sector, the long-term upgrade of the national energy infrastructure is well underway, supporting improvements in energy security and accelerating the green transition. This includes significant and timely investment in both generation and network capacity. We are seeing a growing pipeline of opportunities across new nuclear (including Sizewell C, small modular reactors, and fusion energy) as well as in onshore and offshore wind, solar, carbon capture, and hydrogen production. In the defence sector, government plans to enhance national security and modernise defence infrastructure are generating new project opportunities, including investment in munitions facilities, the majority of which are expected to be steel-intensive. Transport infrastructure also remains a key area of growth for the Group, and we welcome the Government's continued focus on improving connectivity and unlocking regional opportunity. We are making good progress on HS2 station opportunities, including Birmingham Interchange, and on the TransPennine Route Upgrade. More broadly, recent announcements have included investment in local transport schemes across England's city regions, rail network enhancements, a new pipeline of major road network projects, and support for the Heathrow expansion, all of which are expected to create further opportunities for the Group.

In Europe, the outlook is similarly positive, with the green energy transition driving sustained public investment in infrastructure. We are seeing a notable increase in the volume of power transmission and distribution projects coming to market, alongside continued investment in transport and energy infrastructure.

Modular Solutions

Revenue of £9.6m (H1 2025: £9.8m) represents a slight decrease compared to the prior period, and the division reported an underlying operating loss of £1.1m (H1 2025: profit of £0.1m). The lack of growth in H1 reflects delays to higher-margin Severstor orders, which are now expected to be delivered in H2, whilst lower profitability reflects a sub-optimal mix of work which has driven lower factory overhead recoveries. The divisional underlying loss before tax of £1.4m (H1 2025: £0.4m) includes the post-tax share of loss from CMF of £0.3m (H1 2025: profit of £0.3m). The reduced profitability at CMF was driven by lower volumes during the period, reflecting subdued H1 activity levels in the Group's Commercial and Industrial division, where projects typically include substantial metal decking and purlin packages.

SMS delivered a mixed performance in H1, with challenging market conditions contributing to delays in the conversion and delivery of several large projects. Nonetheless, the modular frames business made encouraging progress, securing new contracts across a range of sectors and strengthening relationships with new customers.

INDIA

In the first half of FY26, JSSL recorded an output of 48,000 tonnes, including sub-contracted work, an improvement of 17,000 tonnes on the prior period output of 31,000 tonnes. This increased activity is evident in the Group's higher after-tax share of profit of £1.0m (H1 2025: £0.1m). The improved performance reflects an increase in revenue of 34 per cent to £65.8m and improved operating margins of 2 per cent, mainly reflecting a better mix of work and improved overhead recoveries driven by higher factory activity levels. Financing expenses of £2.1m (H1 2025: £2.5m) are £0.4m lower than the previous year, reflecting a reduction in borrowings, and result in a profit before tax of £2.6m (H1 2025: £nil).

India's construction sector continues to grow strongly, with rising demand for steel driven by sustained public and private investment in manufacturing, energy, and transport infrastructure. This momentum is reflected in a record order book at 1 November of £286m (1 July: £240m), comprising a strong mix of higher-margin commercial work at 80 per cent (1 July: 86 per cent). The order book comprises a number of major data centre projects, together with substantial industrial buildings packages and work across the commercial, data centre and broader industrial sectors.

The expanding market landscape is also evident in a strengthening pipeline of potential orders and numerous growth opportunities across target sectors, including commercial real estate, data centres, warehousing, infrastructure, and manufacturing, notably in steel, cement, and speciality chemicals. JSSL is actively pursuing opportunities in emerging sectors and export markets, leveraging its brand and reputation for delivering high-quality steel solutions.

Development of the new 55-acre site at Gujarat commenced in FY25, with new open yard and factory production facilities expected to be completed and operational within the current year. This will increase JSSL's in-house production capacity from approximately 114,000 tonnes to around 184,000 tonnes. Further expansion at Gujarat is planned in future years which, once complete, will increase JSSL's combined factory capacity (Bellary and Gujarat) to approximately 265,000 tonnes, or around 350,000 tonnes including sub-contracted work. The majority of this investment is being financed through debt facilities provided directly to JSSL by Indian lenders.

Value continues to build in JSSL, which remains well positioned to capitalise on the favourable outlook for the Indian economy and the strong underlying demand for structural steel. We remain confident in the long-term growth trajectory of the market and the value creation potential of the business.

Paul McNerney                                                 Jan Bramall

Chief Executive Officer                                      Interim Chief Financial Officer