In 2012 Severfield-Rowen鈥檚 revenues slipped 4% to 拢256.6m (2011: 拢267.8m) and it made an underlying pre-tax loss of 拢19.6m (2011: 拢10.1m profit).
The proceeds of the rights issue, which remains subject to shareholder approval, will be used to reduce debt and strengthen the balance sheet. Net financial debt stands at 拢44.0m, of which 拢44.2m is outstanding under the existing banking facilities.
the company has booked a 拢9.9m loss for the year on its 122 Leadenhall Street contract (鈥榯he Cheesgrater鈥�), identified 拢2.9m of cost overruns on three other contracts and downgraded the value of a further five by 拢7.3m in total.
Now under the leadership of former Kier chief executive John Dodds, Severfield-Rowen is being restructured. Trading businesses Severfield-Rowen Structures, Watson Steel Structures and the Steelcraft erection business have been merged into a single new entity, Severfield-Watson Structures. In what is an ongoing process, more than half of the anticipated overhead savings of 拢2m have now been realised and the programme will be largely complete by 30 June 2013.
Mr Dodds said: 鈥淥n a positive note, while trading conditions remain difficult, the group's order book has remained strong at 拢209m and I have been encouraged by the continued support of our major customers. The order book contains a broad mix of London commercial offices, industrial, warehousing, waste to energy projects, transport including airports, health, education and leisure projects. In India, our joint venture continues to build a solid foundation for future growth.鈥�
He added: 鈥淭he events that led to the rights issue related to an unacceptable level of performance on a small number of contracts. Positive action is in hand to address these issues and improve performance."
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