£70m Record Order Book Leads to New Investment
Severfield-Rowen PLC
6 January 2000
£70 MILLION RECORD ORDER BOOK LEADS TO NEW INVESTMENT.
NEGOTIATIONS ON SALE OF MANABO AT ADVANCED STAGE
Severfield-Rowen Plc - the structural steelwork company - announced today
that, following strong demand in December and a record current order book, a
fifth production line is being built at its Dalton site in Yorkshire. Line 5,
in which £3 million is being invested, is expected to commence production in
April. The new line will increase the capacity at Dalton, where weekly
production averaged 1,100 tonnes last year, to 1,400 tonnes per week -
enhancing the site's position as the largest single production facility for
structural steel in Europe.
The core business of Severfield-Rowen - the design, fabrication and erection
of structural steelwork products for a wide variety of construction markets,
both in the UK and overseas - is showing sound progress with current order
books now totalling in excess of £70 million, equivalent to over 60,000 tonnes
of steel. In addition, and despite recent challenging market conditions, the
downward pressure on margins is now easing. 1999 closed on a satisfactory note
overall for the Group. While still too early to be precise, current
indications suggest that although Manabo - the loss-making and non-core
subsidiary - continued to be disappointing, returns in the core business
exceeded expectations in a challenging market.
The Directors also confirm that they are in advanced negotiations to sell the
Manabo business - which manufactures protective steel gloves - to a buyer from
the food and hygiene industry. Heads of agreement have been signed with the
international purchaser, following expressions of interest from several
parties. Completion, subject to due diligence, is expected on or before the
Company announces its preliminary results towards the end of March.
Commenting on the latest developments, Peter Levine the Group's chairman,
said:
'With our record order book and the increased capacity at Dalton, the Group's
inherent strength and sound future prospects are underpinned. The core
business continues to perform most satisfactorily and we are looking forward
to making 2000 a year of progress and growth for the Company.
'The anticipated disposal of Manabo will enable Severfield-Rowen to focus on
its core competencies and markets. Manabo should as a result be better placed
to develop as a part of a larger group within the relevant industry.'
Enquiries:
Peter Levine, Chairman, Severfield-Rowen plc 0113 2469993 or
0802 312249
Sarah Marsland/Tim Spratt, Financial Dynamics 0207 831 3113
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