Severfield faced toughest period in its history

The Thirsk-based company’s underlying loss before tax for the 15-month period ended March 31 2013 was £21.5m, compared with a £10.1m profit in the 12 months to December 31, 2011.

A rights issue, which was completed successfully in April, raised £44.8m of new funds.

Severfield was forced to seek emergency funds after uncovering heavy losses on contracts, including the Cheesegrater skyscraper in London.

Revenue for the 15-month period was £318.3m. Revenue in 2011 was £267.8m.

John Dodds, the executive chairman, said yesterday: “The 15-month period to March 31, 2013 has been extremely challenging for the group, with problems on its 122 Leadenhall Street (the Cheesegrater) contract being the most significant of several contract issues which contributed to the financial loss for the period.

“Management and organisational changes have already been made and further changes are in process. Meanwhile, the group retains its core strengths, a strong market position and the continued support of its major customers.

“This, together with the shareholder support for the refinancing completed on April 5, gives me confidence that the group will improve its financial performance in the near term and deliver returns commensurate with its strong market position in the longer term.”

In January, Severfield-Rowen axed its chief executive, issued a warning about its profits and banking covenants, and launched a review of contracts after overshooting its budget on the Cheesegrater.

Tom Haughey, who had been CEO since July 2007, quit with immediate effect. In January, Mr Dodds became the company’s executive chairman. The company is still seeking a new chief executive. In recent months, Severfield has been dogged by soaring costs, pricing pressure, delays over contract settlement, tough competition and weak demand.

According to Mr Dodds, market conditions remain challenging, but the board was confident that, with its strengthened financial position, and the reorganisation, Severfield Group was well placed to maintain its strong market position in the UK, and achieve its strategic objectives in India.