PROFITS fell 85% at Barrett Steel as the UK’s largest independent steel stockholder felt the “pain being felt by the worldwide steel industry”.
The steel industry’s struggles have become high-profile in recent months with global giants struggling, but the Bradford-based group maintained profitability, recording pre-tax profits of £1.32m.
Chairman Roy Butcher said: “The recent announcements from Tata, SSI and Caparo give an indication of the pain being felt by the worldwide steel industry at present with prices at current levels. The impact of worldwide over capacity must inevitably lead to capacity reductions.”
Barrett Steel incurred restructuring costs totalling £2.4m – two-thirds of which were redundancy costs with the remaining third from write downs caused by the closure of its forge in Newcastle and machine shop in Ayr.
Turnover was down 9% to £284.9m in the year to September 2015, returning revenues to near its 2013 levels, despite volumes increasing marginally. Export sales were hit harder, down by one-quarter to £33.2m, which the company said was “entirely due to the sharp decline in the oil and gas market”.
Mr Butcher added: “While market conditions remain very challenging there are no current signs of demand diminishing in our traditional construction market. We continue to invest in added value processing equipment in our traditional markets wherever we see an opportunity.
“We do believe we are getting towards the end of the prolonged period of price reductions with scrap and iron ore prices appearing to be very close to the bottom of their price cycle.”
Its £6m capital investment project included a £150,000 land purchase in Rotherham as well as a £1.2m investment in its IT systems.
The company, which is 150 years old this year, has been located on the same site in Bradford since 1910.
