SEVERFIELD-ROWEN | Full Year Trading Update And Management Changes | RNS
Full Year Trading Update and Management Changes
Severfield-Rowen Plc (the "Group"), the market leading structural steel group, issues this trading update for the 12 months to 31 December 2012.
As previously announced the Group's UK businesses have been operating in a difficult climate with pricing pressure and protraction of contractual settlements posing significant challenges as clients and the supply chain compete harder in a shrinking market.
Since then our UK performance has been further, and materially, adversely affected by cost overruns on our 122 Leadenhall contract. As a result, the Board intends to review expeditiously its current contract base and will provide a further update to the market, as soon as possible, when it has greater clarity on the financial impact of this exercise.
As at 31 December 2012, net borrowings are £30 million with the order book stable at £209 million.
In light of these recent developments, the Board has concluded that a change to the leadership of Severfield-Rowen is required to re-establish confidence with all the Group's stakeholders. Accordingly, Tom Haughey, Chief Executive, is standing down from this role and leaving the Board with immediate effect. John Dodds, Chairman, will assume the role of Executive Chairman with immediate effect pending the appointment of a new Chief Executive. The Board is actively engaged in a search process to identify a permanent Chief Executive.
The Company is in discussions with its lending banks regarding compliance with its covenants. The discussions with the Company's lending banks, and its other stakeholders, will continue with the objective of placing the Group on sound financial foundations that support its UK business and the further development of its Indian joint venture.
John Dodds, Executive Chairman, commented:
"Severfield-Rowen is the UK's market leader in structural steel and the development of its Indian activities is encouraging. Our order book remains stable, despite challenging current conditions, and the Board is confident that the longer term fundamentals of the Group are strong. I am, however, extremely disappointed in the need to make this latest trading update. My task, now, is to re-establish the credibility of the Group with all its stakeholders, bring greater control and discipline to its operations and secure Severfield-Rowen's longer term financing."
For further information, please contact:
Jefferies Hoare Govett
020 7029 8000
020 7029 8000
Pelham Bell Pottinger
020 7861 3112
020 7861 3870
This information is provided by RNS