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Tom Haughey, chief executive of Severfield Rowen, axed in costings crisis
THE chief executive of structural steel business Severfield Rowen has been asked to stand down after the company reported another blow.
The business reported Tom Haughey would leave with immediate effect after it announced another contract – for London skyscraper 122 Leadenhall – had exceeded budget.
The Thirsk-based company said in a statement it was already operating in a difficult climate with pricing pressure and ongoing settlements of contracts posing challenges as clients and the supply chain compete harder in a shrinking market.
As a result, it said the board intended to review its current contract base and confirmed it was in discussions with its banks over its repayments.
The statement said: “In light of these recent developments, the board has concluded that a change to the leadership of Severfield-Rowen is required to re-establish confidence with all the group’s stakeholders.
“Accordingly, Tom Haughey, chief executive, is standing down from this role and leaving the board with immediate effect.”
John Dodds, chairman, will assume the role of executive chairman pending the appointment of a new chief executive.
Mr Dodds said: “Severfield-Rowen is the UK’s market leader in structural steel and the development of its Indian activities is encouraging.
“Our order book remains stable, despite challenging current conditions, and the board is confident the longer-term fundamentals of the group are strong. I am, however, extremely disappointed in the need to make this latest trading update.
“My task is to re-establish the credibility of the group with all its stakeholders, bring greater control and discipline to its operations and secure Severfield-Rowen’s longer-term financing.”
Net borrowings were recorded at £30 million on December 31, with an order book of £209 million worth of contracts.
The business already announced in November that it expected to make 50 redundancies across its UK business in Dalton, near Thirsk, and Bolton, Lancashire, as it restructures.
It had already revised profit forecasts down to £1 million from £6.78 million in 2011. Analysts have said they expect the company to report an operating loss for 2012.