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REFILE-UPDATE 1-Severfield-Rowen profit slumps; cuts dividend
March 20, 2012 / 8:03 AM / 6 years ago

REFILE-UPDATE 1-Severfield-Rowen profit slumps; cuts dividend

* FY underlying pretax profit 10.1 mln stg vs 15.3 mln stg

* Revenue up marginally at 267.8 mln stg

* Cuts total dividend to 5p from 7.5p

March 20 (Reuters) - Severfield-Rowen Plc’s full-year underlying pretax profit fell by a third and the British structural steel firm slashed its dividend as it was hurt by diminishing demand and pricing pressures.

The Dalton-based company said tough trading conditions in the UK structural steel sector in 2011 had intensified the lower confidence levels for business prospects in 2012.

Severfield-Rowen expects limited growth prospects for 2012, but said it would focus on sectors with competitive advantages such as power and energy.

The company, whose net debt more than doubled to 30.1 million pounds ($47.84 million) as on Dec. 31, said it would continue to manage costs tightly to hold margins at a steady rate.

Severfield-Rowen also plans to merge two of its operating companies -- Severfield-Reeve Structures and Rowen Structures -- from April 1, 2012 into a new unit, Severfield-Rowen Structures.

The company, which is supplying steel for new skyscrapers such as the Shard and the Cheesegrater in the capital, said it would pay a final dividend of 3.5 pence a share, taking its total dividend to 5 pence per share, down by a third from last year.

January-December underlying pretax profit fell to 10.1 million pounds from 15.3 million pounds. Revenue rose marginally to 267.8 million pounds.

Severfield-Rowen shares, which have gained 22 percent since the beginning of the year, closed at 203.5 pence on Monday on the London Stock Exchange.

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