Final Results

Severfield-Rowen PLC
05 April 2005


5 April 2005


                              2004 Full Year Results

                       RECORD PROFITS, OUTSTANDING ORDER BOOK


Severfield-Rowen Plc, the market leading structural steel group, announces its
full year results to 31 December 2004.


£m                                                         2004                 2003           Change

Turnover                                                  204.3                170.2             +20%
Operating profit                                           12.3                  9.3             +32%
Profit before tax                                          12.2                  9.1             +34%
Basic earnings per share                                 41.44p               30.48p             +36%
Dividend per share                                        23.0p                17.0p             +35%


Headlines
     
•    Group operating margins continue to improve - 6.01% (2003: 5.48%)

•    All core businesses performing profitably

•    Terminal 5 and Arsenal Stadium contracts continue to progress well

•    Dividend increased 64.3% over last two years

•    Strong financial position at year end with gross cash balances of £17.8m  
     (2003: £17.2m)


Outlook
     
•    Year commenced ahead of Board's expectations

•    Outstanding order book of £165 m of which 76% is non-Terminal 5 work 
     (2003: 39%)

•    Group now houses four major industry brands with broad range of expertise 
     and services

•    Atlas Ward acquisition a positive benefit to the Group

•    Buoyant demand for structural steelwork projects

•    Robust enquiry level going forward

•    Board confident of further significant progress in 2005


Commenting on the results, Peter Levine, Chairman said:

'Severfield-Rowen has had a record year with results ahead of market
expectations.

'We currently expect a year of continued significant progress underpinned by the
strong  order book of £165m of which only 24% represents the major Terminal 5
project, down from  61% last year.

'As the Terminal 5 contract unwinds, the work going forward and the margins at
which such work has been achieved point to much greater success.  Indeed 2005
has begun very well and is already ahead of initial expectations.

'The Board is confident that further material progress will be achieved in 
2005.'



Enquiries

Severfield-Rowen Plc
Peter Levine, Chairman                                   020 7493 7888
Peter Davison, Finance Director                          01845 577 896

Financial Dynamics
Richard Mountain                                         020 7269 7121



CHAIRMAN'S STATEMENT

Introduction

The Group had a record year in 2004 with the results ahead of expectations.
Progress was achieved throughout the core businesses with all performing
profitably and producing margin improvement for the Group.

The Group's unmatched reputation, enhanced by the recent acquisition of Atlas
Ward, reinforces its place as the market leader and the benchmark for the entire
industry. This is complemented by the excellent financial position of the Group.

With the acquisition of Atlas Ward now completed Nigel Pickard, its MD, will
join the Main Board.

The current year has started well and is already ahead of our budget.  The
Directors are very optimistic that further significant progress can be achieved.

Overview

In 2004 the Group improved its profit before tax by 34% to £12.2m (2003: £9.1m)
on an increased turnover of £204.3m (2002: £170.2m), with operating profit at
£12.3m (2003: £9.3m) producing, after the tax charge of £3.8m (2003 £3.0 m),
increased earnings per share of 41.4p (2003: 30.5p).

The Group's strong financial position reflects the record results.  Net assets
increased to £44.4m (2003: £40.7 m) and, despite capital expenditure out of cash
flow of £5.9m (2003: £6.5m), the Group ended the year with a gross cash balance
of £17.8 m (2003: £17.2m).

Whilst the major projects at Heathrow Terminal 5 and the new Arsenal Stadium are
progressing well, other major work has continued in parallel and with further
successful contract awards arising from demand for the Group's unmatched range
of services, it has allowed the Group to concentrate on greater value added and
higher margin work thereby giving a most positive post-Terminal 5 outlook.

The results are set against a buoyant industry background with the increase in
demand for structural steelwork forecast to continue.

Each one of the Group's core subsidiaries contributed positively to the Group
results, these being Severfield-Reeve Structures based in Dalton, North
Yorkshire, Watson Steel Structures based near Bolton, Lancashire and Rowen
Structures based near Nottingham.

Severfield-Reeve Structures delivered yet another set of excellent figures
further underlining its reputation as the most efficient and profitable
structural steel fabrication plant in the UK.  The plate line and the
intumescent paint lines once again contributed to value added performance.

Watson Steel Structures' progress continued under the stewardship of Peter
Emerson, with a very good set of figures, demonstrating the continued success of
the Group's capital expenditure programme.

Rowen Structures successfully contributed to the Group's results in its first
full year of trading after its 2003 re-organisation.

Dividend

As a result of the record results and reflecting the Board's confidence in the
future prospects of the Group together with its strong cash position, the Board
intends to increase the full year dividend by 35% to 23.0p per share, which is
covered 1.8 times by earnings.  The final dividend of 14.25p per share (2003:
10.75p) is payable on 15 June 2005 to shareholders on the register on 13 May
2005.

Over the last two years the full year dividend has been increased by 64.3%
(9.0p per share increase).

Atlas Ward

The Group completed the acquisition of Atlas Ward on 31 March 2005 for a cash
consideration of £1.21m on the basis set out in our previous announcements on
the subject.

The acquisition brings into the Group another well known brand in the industry,
with an experienced workforce and a complementary end-market and client base.

This acquisition is a positive step and work has already begun planning the
integration of Atlas Ward into the Group, including the implementation of a
focused programme of capital expenditure.

Board changes

We welcome Nigel Pickard on to our Board.   Nigel is MD of Atlas Ward and prior
to the acquisition he demonstrated great ability in turning round a then ailing
business in a short period of time and creating a company with future potential
which the Group is committed to develop and take on to the next stage.

Outlook

The Group's current expectations are for a year of continued progress
underpinned by an outstanding order book of £165m of which £125m (76%) is
non-Terminal 5 related which compares very favourably to £70m (39%) in 2003.
Indeed, as the major Terminal 5 contract unwinds in its significance, the work
going forward and the margins at which such work has been achieved point to much
greater success.

The Board will continue its focused capital investment programme with a
particular emphasis on the integration of Atlas Ward and new value added areas
of the business to enhance Group margins.

The Group's management and workforce are the cornerstone of the Group's success.
The Board is greatly indebted to them and expresses to them its deep
appreciation and gratitude.  Without them the Group could not achieve the
Board's aim of maintaining the reputation of Severfield-Rowen as a centre of all
round excellence for the industry.

2005 has begun well and is already above our initial expectations.  The Board is
confident that further material progress will be achieved.


Peter Levine
Chairman



OPERATIONAL REVIEW

Core Business Overview

In 2004 the core businesses of the Group, being Severfield-Reeve Structures,
Watson Steel Structures, and Rowen Structures turned in very profitable returns
in excess of our expectations at the start of that year.  They were ably
supported by our erection company, Steelcraft Erection Services.

The Group has once again produced figures which set new standards in our
industry.   However constant review of systems and performance takes place to
maintain our position as market leader and give enhanced services to our new
clients with the increasing broad range of work the Group performs.

Severfield-Reeve Structures

The capital investment undertaken over the past two years on the upgrading of
plant and machinery has led to increased levels of efficiency with more tonnage
now being produced by fewer employees.  The business continued to go from
strength to strength working on a wide variety of projects including:
     
•    Twelve-storey commercial development on the old Spitalfields market site, 
     London

•    New Withington Diagnostic and Treatment Centre Hospital, for the NHS, South 
     Manchester

•    Six-storey retail development and transport interchange in Doncaster city 
     centre, South Yorkshire

•    Specialist development of oil pipeline carrying racks on Sakhalin Island, 
     Russian Federation

•    New Hospital development at Blackburn Hospital, Lancashire
     
•    Redevelopment of the Oval cricket ground's Vauxhall End stand, South London
     
•    Three-storey retail development in the centre of Hemel Hempstead

Whilst the large Terminal 5 project progresses to its conclusion in 2006, we
have been able to smoothly and efficiently dovetail production with other
notable contracts including:
     
•    Two office developments for international law firms over-looking Tower 
     Bridge and City Hall in the award-winning More London development
     
•    Warehouse and distribution centre on the Pioneer Business Park, Ellesmere 
     Port, near Chester

•    Retail and leisure development on the old Flowers Brewery site in 
     Cheltenham

•    New Tesco distribution centre in Peterborough
     
•    New research centre for Rutherford Appleton Laboratories in Chilton near 
     Oxford

•    Retail development opposite BBC Television Centre, White City, London

•    Additional manufacturing facilities for the new Mini made by BMW at Cowley 
     near Oxford

•    Redevelopment of office blocks at Aldermanbury Square, London

•    Development of several schools for North Lanarkshire PFI projects

•    Development of offices for Scottish Television in Glasgow

•    Development of 'Knowledge Dock' and 'Learning Resource Centre' buildings 
     for the University of East London

•    Extension to the Antonine shopping centre, Cumbernauld, Glasgow
     
•    New B&Q superstore in Luton

Watson Steel Structures

Watson's excellent results demonstrate the commendable returns for the Group's
policy of carefully managed strategic investment and Group integration.
Contracts performed in 2004 included:

•    Channel Tunnel rail link works at St. Pancras Station, London

•    Arsenal Football Club Stadium and link bridges

•    BAE fuel test facility at Filton, Bristol

•    Gatwick Airport, Pier 6 connector; the world's longest over airport 
     pedestrian bridge

•    Stratford and Ebbsfleet railway stations, London - for the Channel Tunnel 
     rail link

•    Ongoing works at Heathrow Airport, Terminal 5 for BAA plc

New contracts for 2005 include:

•    Footbridge spanning River Irwell, Manchester.

•    Steelwork to New Grandstand, Ascot Racecourse.

•    Tubular Arch Bridge in Bolton Town Centre.

•    Arch Bridge spanning River Clyde, Glasgow.

•    Two Grandstands, Aintree Racecourse.

•    Millennium Dome Arena.

•    Phase 2 of St Pancras Station Redevelopment.

•    Multi-Storey Car Park - Heathrow Airport.

Rowen Structures

Rowen played a very important part in the Group during 2004 especially with
regard to specialist services relating to airport work.  Its core expertise
continues to play a crucial role within the Group.  The contracts undertaken by
Rowen in 2004 principally were for BAA at Gatwick as well as Heathrow.

Atlas Ward

With a particular expertise in the distribution warehouse market and a highly
skilled work-force and complementary client base, the Group intends to integrate
Atlas Ward during the course of 2005, apply a controlled capital investment
programme and make use of synergies to increase margins and profitability.

Contracts for 2005 include:
     
•    New warehouse facility on the outskirts of Hemel Hempstead for Astral
     Developments

•    Three storey office development for the new Aylesbury College campus

•    New storage and distribution facility for Kimberley Clark

•    New warehouse for Prologis near Swindon

•    Second phase food distribution warehouse near Bridgewater, Somerset

Steelcraft Erection Services

The year 2004 saw Steelcraft once again providing the Group with invaluable
support to whom it is a dedicated service provider.  It produced very good
results, testament to its effective management, control and close working
relationship with other members of the Group.

Conclusion

The Group has had a record year with the results ahead of expectations.  The
Group's current expectations are for a year of continued significant progress
underpinned by the  outstanding order book of £165m.  This is a wonderful
testament to the status and position which Severfield-Rowen has achieved.
Enquiry levels remain robust throughout the Group against a background of
buoyant industry demand.

As the major Heathrow, Terminal 5 contract unwinds, the work going forward and
the margins at which such work has been achieved point to much greater
achievements to come.

We view this coming year with great confidence.

John Severs
Managing Director



Financial Review

Once again it is very pleasing for me to report that the Group's results for the
year ended 31 December 2004 show a further improvement in its financial
performance with turnover, profit before tax, earnings per share, dividends per
share and the year end gross cash position all reaching record levels.

Profit before tax of £12.22m and turnover of £204.28m have increased 34.0% and
20.1% respectively over the figures achieved in the previous year.

This is an exceptional result in a market which has been largely dominated by
significant increases in the cost price of raw steel throughout the year and is
well ahead of market expectations.

The basic earnings per share of 41.44p is an increase of 36.0% over 2003.
Consequently, it is recommended that the total dividend for the year be
increased by 35.3% to 23.0p per share, giving a dividend cover of 1.8 times.

It is very satisfying that the Group ended the year with an exceptional gross
cash balance of £17.8m and net funds of £14.6m.  Net assets increased by 9.2% to
£44.4m.

Turnover

Group turnover has increased by 20% to a record level of £204.28m.  This
increased level of turnover includes a significant value in respect of one-off
specialist services procured by the Group in relation to the Heathrow Terminal 5
project.

These services included castings, heavy machining and box girders for the main
terminal roof and the control tower.  The combined value of these services was
in the order of £24m.

Operating Profit

The Group's operating profit increased by 31.8% to £12.29m with operating
margins increasing to 6.01% from the 5.48% achieved in 2003.

The Group's results continue to incorporate those of its two associated
companies, Kennedy Watts Partnership Limited and Fabsec Limited, of which the
Group owns 25.1% and 25% respectively.  In 2004 the Group's share of these two
companies' results amounted to a net operating loss of £178,000 (2003:
£142,000), thereby reducing the total profit before tax of the Group, after a
net interest receivable figure for the Group of £111,000, to £12.22m, an
increase of 34% over the previous year.

Taxation

The tax charge of £3.82m represents an effective tax rate of 31.26% on pre-tax
profits for the year compared with 32.45% in the previous year.  This effective
rate is higher than the standard corporation tax rate of 30% as a result of
adjustments made in respect of expenditure not deductible for corporation tax
purposes along with sundry losses not available for surrender for Group relief
purposes.

Earnings Per Share

Basic earnings per share is a record 41.44p, an increase of 36.0% over the
previous year.  This calculation is based on the profit after taxation of
£8,400,000 and 20,269,235 ordinary shares, being the weighted average number of
shares in issue during the year.

The diluted earnings per share figure of 41.36p is not materially different from
the basic calculation.  This is calculated using the same profit after taxation
figure and 20,309,730 ordinary shares, being the weighted average of the number
of shares in issue during the year, allowing for the full exercise of any
outstanding dilutive share options.

Dividend

The Board is recommending a final dividend of 14.25p per share (2003: 10.75p)
bringing the total dividend for the year to 23.0p per share.  This total
dividend represents a 35.3% increase over the dividend of 17.0p per share paid
for 2003.  This is in line with the basic earnings per share increase and
maintains the total dividend cover at 1.8 times earnings, a level at which the
Board remains comfortable and which it is confident of maintaining in the
future.

The final dividend is payable on 15 June 2005 to shareholders on the register on
13 May 2005.  The ex-dividend date will be 11 May 2005.

Balance Sheet

The Group's balance sheet continues to strengthen with shareholders' funds
increasing by £3.75m to £44.4m.  This equates to a net asset value per share at
31 December 2004 of 219.1p, compared with 200.6p at the end of 2003.

The Group's balance sheet now has fixed assets totalling almost £35m.
Depreciation charged in the year amounted to over £2m.

We have continued to invest in our business with capital expenditure in the year
at a similar level to the previous year at £6.4m.

Associated Companies

During 2001 the Company acquired a 25% shareholding in Fabsec Limited, a company
involved in the development of a bespoke and fire engineered beam made out of
plate.  This company holds the master intellectual property rights for these and
the other Fabsec family of beams the world over.   It also carries out marketing
and promotion.  The Group benefits from these functions whilst only contributing
25% towards overheads.  Fabsec Limited is not to be confused with the Group's
successful and profitable plate and intumescent paint lines at Dalton which
produce the Fabsec and fire engineered beams under a perpetual, no royalty
licence from Fabsec Limited.

Investment in Fabsec Limited has continued in 2004 by way of further loans to
that company.  The total investment by the Group as at 31 December 2004 amounted
to £614,000.  Fabsec continues to be heavily involved in technical and market
development and, therefore, the results for the year to 31 December 2004 show a
loss for the period.  The Group's 25% share of this loss amounted to £179,000.
However, it is anticipated that from 2005 the company will agree and maintain
significant levels of licence fees and royalty income from both the UK and
overseas which will greatly reduce, if not eliminate altogether, the losses
currently generated.

The Group also owns a 25.1% shareholding in Kennedy Watts Partnership Ltd, a
company involved in CAD/CAM steelwork design.  The Group's share of the
operating profit of Kennedy Watts reduces the net operating loss arising from
the associated companies to £178,000.

Cash Flow

Management of the Group's cash continues to be of prime importance and is
tightly controlled.  It is particularly pleasing, therefore, to report that the
Group ended the year with a record positive cash balance of £17.85m.

During the year £10.66m was generated from operating activities.  Outflows of
cash during the year included dividends paid of £3.93m, corporation tax paid of
£2.59m and the purchase of fixed assets, net of sale proceeds received, of
£4.70m.

As a result the cash balance increased from the end of 2003 by £0.66m.

During the year Severfield-Reeve Projects Limited took out a short-term bank
loan to fund the undertaking of a specific contract.  This amounted to £2.13m at
the year end.  This loan was re-paid in March 2005 when the total amount due on
this contract was received.

Total borrowings, made up of the bank loan and amounts due on hire-purchase
contracts, amounted to £3.20m.

Consequently, the Group had net funds available at the year end of £14.65m.

Treasury

Group treasury activities are managed and controlled centrally.  Risks to assets
and potential liabilities to customers, employees and the public continue to be
insured.  The Group maintains its low risk financial management policy by
insuring all significant trade debtors.

The treasury function seeks to reduce the Group's exposure to any interest rate,
foreign exchange and other financial risks, to ensure that adequate and cost
effective funding arrangements are maintained to finance current and planned
future activities and to invest cash assets safely and profitably.

The Group remains committed to strong financial controls, cash management and
prudent accounting and treasury policies.

International Financial Reporting Standards

Severfield-Rowen Plc will be required to adopt International Financial Reporting
Standards (IFRS) for the financial year ending 31 December 2005.  The Group is
making progress on the conversion project to review all existing IFRS's, is
working to ensure that the procedures required to collect the necessary data are
in place, and is looking to integrate swiftly the recent acquisition of Atlas
Ward into this work.

The first results to be prepared under IFRS will be presented in the 2005
Interim Report later this year.  Within that Report the Group will also present
a full re-statement of these 2004 UK GAAP figures, together with the
reconciliation of the adjustments from UK GAAP to IFRS.

Post Balance Sheet Event

On 31 March 2005 the Group acquired the entire issued share capital of Atlas
Ward Holdings Limited (Atlas) for a consideration of £1.21m in cash.  Atlas,
based at Sherburn near Scarborough in Yorkshire, designs, fabricates and erects
structural steelwork, primarily for the distribution warehouse market.  For the
year ended 31 December 2004 Atlas had unaudited turnover of approximately £35m,
profit before tax of £250,000 and net assets of £1m, excluding  a pension scheme
deficit initially estimated as at 31 December 2004 at £4.8m . No further
benefits are being earned by members in the scheme.

Summary

The Group has had a most successful year with turnover, profit before tax,
earnings per share, dividends per share and the year end gross cash balance all
reaching record levels.

It continues to improve its healthy financial position and is well placed for
future growth and cash generation.


Peter Davison
Finance Director




Consolidated Profit and Loss Account
For the year ended 31 December 2004
                                                                   2004                     2003
                                                                   £000                     £000

Turnover - continuing operations                                204,277                  170,152

Cost of sales                                                 (188,145)                (157,353)
Gross profit                                                     16,132                   12,799

Distribution costs                                                (662)                    (610)
Administration expenses                                         (3,242)                  (2,948)
                                                                 12,228                    9,241

Other operating income                                               59                       78
Group operating profit - continuing operations                   12,287                    9,319

Share of associates'
operating loss                                                    (178)                    (142)
                                                                 12,109                    9,177

Net finance income/(charges)                                        111                     (56)
Profit on ordinary
activities before tax                                            12,220                    9,121

Tax on profit on ordinary activities                            (3,820)                  (2,960)
Profit on ordinary activities
after tax for the financial year                                  8,400                    6,161

Dividends payable to
equity shareholders                                             (4,653)                  (3,429)
Profit retained,
transferred to reserves                                           3,747                    2,732

Earnings per share
      Basic                                                      41.44p                   30.48p
      Diluted                                                    41.36p                   30.47p
Dividends per share
      Paid                                                        8.75p                    6.25p
      Proposed                                                   14.25p                   10.75p
Total                                                            23.00p                   17.00p




Consolidated Balance Sheet
31 December 2004
                                                             2004                            2003
                                                             £000                            £000
Fixed assets
Intangible assets                                             161                             170
Tangible assets                                            34,131                         31,148
Investments                                                   580                             636
                                                           34,872                          31,954

Current assets
Stocks                                                      6,678                           3,316
Debtors                                                    36,833                          35,223
Cash at bank and in hand                                   17,845                          17,184
                                                           61,356                          55,723

Creditors - amounts falling due
within one year                                          (48,773)                        (44,120)

Net current assets                                         12,583                          11,603
Total assets less current                                  47,455                          43,557
liabilities

Creditors - amounts falling due
after more than one year                                    (429)                           (623)

Provisions for liabilities and
charges                                                   (2,620)                         (2,279)
                                                           44,406                          40,655

Capital and reserves
Called up share capital                                     2,027                           2,027
Share premium account                                       9,415                           9,411
Merger reserve                                                114                             114
Capital redemption reserve                                     25                              25
Profit and loss account                                    32,825                          29,078
Equity and total shareholders'
funds                                                      44,406                          40,655




Consolidated Cash Flow Statement
For the year ended 31 December 2004
                                                                 2004                        2003
                                                                 £000                        £000

Net cash inflow from operating activities                      10,664                      17,635
Returns on investments and servicing of finance
Taxation                                                          109                        (70)
Capital expenditure and financial                             (2,587)                     (2,196)
investment
Acquisitions and disposals                                    (4,701)                     (5,785)
Equity dividends paid                                           (123)                       (157)
                                                              (3,930)                     (3,007)
Cash (outflow)/inflow before use of liquid
resources and financing                                         (568)                       6,420
Financing                                                       1,229                       (653)
Increase in cash in the year                                      661                       5,767




Reconciliation of net cash flow to movement in net funds
                                                                 2004                        2003
                                                                 £000                        £000

Increase in cash in the year                                      661                       5,767
Cash flow from movement in loans and hire-purchase                909                         842
contracts

Change in net funds from cash flows                             1,570                       6,609
New borrowings                                                (2,134)                           -
New hire-purchase contracts                                     (557)                           -

Movement in net funds in the year                             (1,121)                       6,609
Net funds at 1 January                                         15,768                       9,159

Net funds at 31 December                                       14,647                      15,768




Supplementary Statements
For the year ended 31 December 2004

Statement of Total Recognised Gains and Losses

There are no recognised gains or losses in either period other than the profit
attributable to members of the Group

Reconciliation of Movements in Shareholders' Funds
                                                                   2004                        2003
                                                                   £000                        £000

Profit for the financial year                                     8,400                       6,161
Dividends                                                       (4,653)                     (3,429)
Issues of shares                                                      4                         189

Net addition to shareholders' funds                               3,751                       2,921
Opening shareholders' funds                                      40,655                      37,734

Closing shareholders' funds                                      44,406                      40,655



Notes:
     
1)   The above financial information does not amount to full accounts within the 
     meaning of section 240 of the Companies Act 1985.  Full accounts for the 
     year ended 31 December 2004 have not yet been audited or delivered to the
     Registrar of Companies.  The Annual Report is due to be posted to 
     shareholders on or around 18 May 2005.  A copy of the statutory accounts 
     for the year ended 31 December 2003 has been delivered to the Registrar of 
     Companies.  The Auditor's Report on those accounts was not qualified and 
     did not contain a statement under section 237 (2) or (3) of the Companies 
     Act 1985.

2)   The basic earnings per share figure for the year ended 31 December 2004 is 
     based on the profit after taxation of £8,400,000 (2003:£6,161,000) and 
     20,269,235 (2003: 20,210,711) ordinary shares, being the weighted average 
     of the number of shares in issue during the period.

3)   The calculation of diluted earnings per share is based on the profit after 
     taxation of £8,400,000 (2003: £6,161,000) and 20,309,730 (2003:20,219,657) 
     ordinary shares, being the weighted average of the number of shares in 
     issue during the period, allowing for the dilutive effect of share options.
     
4)   The results have been prepared on the basis of the accounting policies set 
     out in the 2003 Annual Report.


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