Severfield-Rowen secures ‘impressive’ orders

STRUCTURAL steel company Severfield-Rowen has secured “impressive” order books in the UK and India and negotiated new banking facilities.

In an interim management statement, the company said its overall trading performance and financial position for the year to date remained in line with management expectations. The company’s debt levels is also in line with expectations.

Severfield, which is based in Thirsk, employs 13,000 staff including 500 in Yorkshire.

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In a statement, the company added: “The company remains cautious about the market outlook in the UK and continues to plan on the basis of subdued demand and relatively tight pricing. In recent weeks two more competitors have ceased trading, which supports the company’s view that supply/demand rebalancing is continuing.

“The group continues to enjoy a healthy UK order book of £230m which, together with its pipeline of prospects, underpins the group’s confidence in achieving its activity targets in the UK for 2012.”

Demand and prospects in India remained very positive, the statement said.

“Our value offering, of design enhancement, volume manufacturing, product accuracy and rapid site erection, is gaining increasing traction with clients, which has translated into a growing order book currently standing at £61m,’’ the statement added.

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“Factory output levels and productivity continue to improve each month, accompanied by outstanding product quality. The steel supply chain servicing JSSL continues without interruption at expected levels of service. Operational management resource at JSSL’s plant has been strengthened recently with the appointment of Kevin Campbell, as new head of operations, to sustain the continuous improvement in lifting manufacturing volumes.”

The new banking facilities, with Royal Bank of Scotland and Yorkshire Bank, include a £50m revolving credit facility for five years.

This is an increase on the £40m, three year facility which was scheduled to expire in March 2013. These new facilities will enable the company to carry out its investments in India as well as support its operational requirements in the UK.

Commenting on outlook, the statement said: “The group remains on track to deliver a result for the full year that is in line with management’s expectations. Looking further ahead, while the UK market will be tough for the next few years, the company expects to consolidate further its position as market leader.

“JSW Severfield Structures is clearly establishing a strong presence and reputation in the Indian market providing the foundation for financial improvement and growth in coming years.”