Interim Management Statement

RNS Number : 1660S

Severfield-Rowen PLC

16 November 2011

 



Interim Management Statement

Severfield-Rowen Plc, the market leading structural steel group, issues this Interim Management Statement covering the period to 16 November 2011.

Current Trading

The Company's overall trading performance and financial position for the year to date remain in line with management expectations and is supported by impressive order books in both the UK and India.  The Company's debt levels also remain in line with expectations.

UK

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 £230 million which, together with its pipeline of prospects, underpins the Group's confidence in achieving its activity targets in the UK for 2012.

JSW Severfield Structures Ltd (JSSL), India

Demand and prospects in India remain very positive.  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 £61 million.

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.

New Banking Facilities

The Company is pleased to report that it has negotiated new banking facilities with effect from 11 November 2011.

The new facilities, with Royal Bank of Scotland and Yorkshire Bank, include a £50 million revolving credit facility for five years, to November 2016.  This represents an increase on the £40 million, three year facility which was scheduled to expire in March 2013. These new facilities will enable the Company to execute its current investment intentions in India as well as support our operational requirements in the UK.

The Company is pleased that it will be continuing its close relationship with two leading banks who share an understanding of its business and the Company's longer term strategy.

Outlook

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 Ltd is clearly establishing a strong presence and reputation in the Indian market providing the foundation for financial improvement and growth in coming years.

For further information, please contact:

Severfield-Rowen Plc                           John Dodds                         01845 577896

                                                         Chairman

                                                         Tom Haughey                      01845 577896

                                                         Chief Executive Officer

                                                         Alan Dunsmore                    01845 577896

                                                         Finance Director

RBS Hoare Govett Ltd                         Simon Hardy                       020 7678 8000

                                                         John MacGowan                  020 7678 8000

Pelham Bell Pottinger                         Zoe Sanders                        020 7861 3887

                                                        Guy Scarborough                 020 7861 3870

 

END

 

 

IMSGGGWGGUPGGRA