Steel contractor announces 'major' review of costs and capacity as despite 15% rise in first-half revenue
Structural steel group Severfield-Rowen is to conduct a “major review” into its costs and capacity deployment, despite a 15.4% rise in revenue in the first half of 2009.
In its results for the six months to 30 June 2009, the firm said revenue had risen to £200m, compared with £173m in the first half of 2008. Net debt fell to £12.0m, compared with £35.9m a year earlier.
However, underlying profit before tax fell 2.9%, down from £25.3m to £24.6m. The group's order book for 2009 was also down, falling to £256m from £431m at the same time last year.
Chief executive Tom Haughey said the company was pleased to have delivered good profits in the first half of the year against a difficult economic climate, but admitted costs were being reviewed.
“For some time, we have expressed concerns about the UK market which have materialised,” he said. “Accordingly we expect UK steel demand and prices to be at significantly reduced levels throughout 2010, which will translate into reduced margins.”
He added: “Against the backdrop of challenging UK market conditions and the requirement for competitiveness in export markets, we are concluding a major review of costs and capacity deployment, and will be making an announcement, in due course, following the conclusion of the consultation process currently being conducted with our staff and workforce.”