In the past year or two, Severfield-Rowen has laboured under project delays, cost over-runs and late paying customers. It suffered significant cost overruns on its 122 Leadenhall Street (‘Cheesegrater’) project in London, for example.
Since then, it has brought in new management leadership under Ian Lawson and gone through a financial restructuring.
In an interim management statement for shareholders today, the board reported that the UK order book of £172m “remains stable and at a level with which management is comfortable”.
It said that the UK business was “showing much greater stability following the completion of the reorganisation undertaken in the last calendar year”.
It added: “The UK market continues to show signs of improvement. This is particularly evident in the pipeline of potential orders the business is seeing, though it is likely to be well into the next financial year before this starts to have any notable impact on the size or mix of the order book.”
However, even without any upturn in the market, the company’s operational improvement programme is on course to yield improved margins over the next two years, the board said.
The Indian subsidiary continues to be loss-making however, with its £32m order book stable but well below break-even production levels for the factory.
“The Indian market continues to be difficult and is likely to remain so at least until after the forthcoming elections in May 2014. In the meantime, the focus remains on strengthening the commercial focus of the business and managing costs tightly.”
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