In this study, we present a novel processing technique for permanent magnets. High-pressure torsion, a method of severe plastic deformation, is applied to compact SmCo powders and deform the material. The resulting samples are completely dense with a size of about several millimetres. The deformation parameters are varied and the microstructure is studied by electron microscopy and X-ray diffraction. The magnetic properties show a direct correlation to the applied deformation strain due to strong grain refinement. Furthermore, the energy product could be enhanced due to texture induced by HPT-deformation.