Severfield Regulatory News (SFR)

14 May 2009 07:00



14 May 2009

INTERIM MANAGEMENT STATEMENT

Severfield-Rowen Plc, the market leading structural steel group, issues this Interim Management Statement covering the period to 14 May 2009.

Current Trading

The Company's trading performance in 2009 to date is in line with management's expectations with all group companies operating at full capacity and continuing to provide high levels of performance to clients in all areas.

Orders

The order book stands at £308 million, which is very healthy in the context of much lower levels of demand from the domestic market. The UK outlook for the remainder of 2009 and into 2010 remains challenging, although this is being partially offset by the Group's strategy of growing domestic market share. For example, the Group has recently been awarded the contract to provide and erect the steel for the Shard of Glass, London Bridge development.

Export Opportunities

Development of sales opportunities in export markets has been supported by the establishment of a Sales Office in Abu Dhabi where the focus on both Petrochem and traditional projects is being co-ordinated. The target remains to develop significant export volumes for 2010, to be manufactured largely at our UK facilities.

JSW Severfield Structures Ltd

The Company is making very satisfactory advances with its joint venture in India and remains on course to commence operations in the summer of 2010.

Good progress is being made in establishing the organisation, buildings/plant and key commercial strategies to enable a robust commissioning of operations.

The Company is particularly pleased with the strong construction prospects it continues to identify in India.

Outlook

The Company is appropriately focused on several key sectors, including energy, transport and infrastructure, and is pursuing the growth of its market share, with which it has had some success. As predicted, margins in the UK continue to be under pressure as competitors attempt to maintain viable output levels.

UK demand prospects into 2010 will continue to be very challenging and the Company is maintaining its review on costs and spending, particularly in view of this.

The Company has a strong balance sheet and financial base, and continues to generate strong cash flow, still expecting to further reduce its debt by the end of 2009. It believes it is well positioned financially and strategically for the future.

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