Company Statement & Trading U
Severfield-Rowen Plc
Company Statement and Trading Update
UK Demand in 2011 - New Overseas Initiative - Board Appointment
Severfield-Rowen Plc, the market leading structural steel group, issues the following statement and trading update.
Current Trading
The Company will announce its 2010 results on Tuesday 22 March 2011, which are expected to be in line with management expectations. The Company remains very active through the first half of 2011 on the back of a strong order book for its UK operations, currently of £217 million.
In the Company's "Interim Management Statement" issued on 17 November 2010, it stated "demand and pricing levels in the UK and Ireland remain depressed with a glimmer of recovery foreseen for some key sectors in early 2012". Whilst this remains the case, the outlook for the second half of 2011 is poor, very much in line with newly released industry forecasts. A number of commercial office projects in London and some projects in the power sector are being deferred until 2012. Overall UK demand for 2011 will be lower than expected as a result of slower than anticipated economic recovery, reducing public expenditure and significant increases in steel prices at a difficult point in the business cycle. Although tender prices have bottomed, pricing will remain very tight through 2011 and will also reflect a deterioration in sector mix from that previously forecast.
This is leading the Company to lower its expectations for 2011, but with the prospect for some recovery starting early in 2012.
Overseas - India
JSW Severfield Structures Ltd (JSSL), the joint venture Company in India, was formally opened on 17 November 2010 and it is operating in line with expectations through the dedication and efforts of its 250 employees. The JV Company continues to grow its order book, which now stands at £15 million (1,081 million Indian Rupees).
Dividend Outlook
The Board remains confident of the Company's outlook for 2012 and beyond but will maintain its prudent dividend policy going forward.
Board Appointment
The Board is pleased to announce that Derek Randall, currently Executive Director with responsibility for Business Development and International, including JSW Severfield Structures Ltd in India, will join the Company's main Board with effect from 28 February 2011.1
The Board will now consist of a Non-executive Chairman, four Executive Directors and four Non-executive Directors.
Overseas – Middle East
Severfield-Rowen Plc and Zamil Steel Industries, a unit of Zamil Industrial Investment Company, of Saudi Arabia, are pleased to announce the signing of a formal alliance. The alliance will provide enhanced structural steelwork Design, Fabrication and Erection capability to clients in Saudi Arabia, the wider Middle East and North Africa.
The focus of the collaboration will be projects with high engineering content, eg stadiums, high rise buildings, airports, power plants and transport infrastructure.
Severfield-Rowen will operate with Zamil in Dammam, where several key Severfield-Rowen managers will be located.
Both Severfield-Rowen and Zamil are leaders in the field of fabricated structural steelwork and have a history of successfully completing many flagship projects. This alliance will provide further enhanced benefits to clients in the growing markets of the Middle East and North Africa.
Commenting on the alliance, Mr Adnan A Al Mansour, President of Zamil Steel Industries, said,
"We are very pleased with our new alliance with Severfield-Rowen Plc and believe this will put both companies in a much better position to capture the highly engineered projects which are planned for the region. Through our discussions with Severfield-Rowen, we have already built strong relations between our respective management teams and we look forward to good future prospects as a consequence of this alliance."
Mr Tom Haughey, CEO of Severfield-Rowen Plc, echoes these comments,
"Severfield-Rowen Plc has been looking to further expand its activity into the regions of the Middle East and North Africa and we believe our collaboration with Zamil is the perfect vehicle. This will give us excellent opportunities to combine our skills and work together successfully on the many prestigious projects planned in these areas. We very much look forward to a long and rewarding relationship. This alliance is an excellent platform for both companies to realise their growth ambitions."
Tom Haughey
Chief Executive Officer
For further information, please contact:
Severfield-Rowen Plc Toby Hayward 01845 577896
Chairman
Tom Haughey 01845 577896
Chief Executive Officer
Alan Dunsmore 01845 577896
Finance Director
RBS Hoare Govett Ltd John MacGowan 020 7678 8000
Stephen Bowler 020 7678 8000
Pelham Bell Pottinger Archie Berens 020 7861 3232
Francesca Tuckett 020 7861 3232
This information is provided by RNS
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