Cost of bolt problem wipes out most of steel specialist鈥檚 recovering profit
Steel specialist Severfield has said the failure of bolts on the Cheesegrater will cost the firm 拢6m, almost completely wiping out its profit for the year.
The firm said the problem, which is being dealt with alongside developer British Land, contractor Laing O鈥橰ourke, and design engineer Arup, by replacing each of the bolts on the building at risk of failure, has already cost the firm 拢1m. In preliminary results for the year to 31 March published today, the firm said liability for the 拢6m cost of the works had yet to be established, but nevertheless it had decided to write-off the cost in its accounts.
The write-off nearly equalled the firm鈥檚 underlying pre-tax profit, leading it to report a final pre-tax profit of just 拢100k for the year, after total exceptional items of 拢8.5m. This was still a better performance than the 拢2.6m loss reported in 2014. Revenue declined from 拢231m to 拢202m, the firm said.
The performance of the firm鈥檚 Indian joint venture improved over the year with Severfield鈥檚 share of the losses reduced to 拢200,000 from 拢3m in 2014 reflecting the reduction in overheads and a higher volume of work.
Market conditions in the UK also improved with the firm鈥檚 order book valued at at 拢194m on 1 June 2015, which Ian Lawson, chief executive, called 鈥渧ery solid鈥�.
Lawson added the firm was pleased to be able to reintroduce a final dividend of 0.5p per share.
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