STRUCTURAL steel firm Severfield-Rowen yesterday revealed that its UK businesses were continuing to operate in a difficult climate, as it provided a trading update for investors.
In an interim management statement released yesterday, which covered the period from July 1, the Thirsk-based business said that pricing pressure and protracted contractual settlements were still posing “significant challenges”.
Clients and the supply chain were competing harder in a shrinking market, Tom Haughey, the chief executive, said.
He added: “Our UK businesses have experienced mixed performances. Atlas Ward Structures and Fisher Engineering, have performed, and continue to perform, at or above expectations.
“Our other businesses, Severfield-Rowen Structures, Watson Steel Structures and Steelcraft Erection Services... are delivering below expectations.”
The company said these businesses had been affected by “unfavourable” final account settlements and cost overruns on a small number of contracts, as well as the re-phasing of other projects by clients.
The statement added: “As a result, it is the board’s view that the group’s profits before tax in 2012 will now be around £1m.”
Commenting on the outlook, Mr Haughey said: “The company’s results this year are being adversely impacted by a small number of projects in three of our UK businesses. However, our overall leading position in terms of market share and activity is undiminished. The UK order book and the known mix of secured projects, together with the reorganisation of the affected businesses, lead us to expect a recovery in business performance starting in 2013.”
In India, Severfield-Rowen expects to see “very strong demand” for its services.