STRUCTURAL steel group Severfield has reported a "significant turnaround" as it transforms £21.5 million losses into £4 million profit.
Announcing its preliminary results for the year ending March 31, 2014, the Thirsk headquartered group said it was "well placed for future growth" thanks to a "strong balance sheet" and "solid order book".
However UK turnover fell from £318.3 million from the prior 15 month period to £231.3 million which the group attributerd to a capacity reduction of its largest business Severfield-Watson Structures, which as undergone a now completed restrucutre.
Severfield, which is based at Dalton, near Thirsk, and has been rebranded after dropping the Rowan name, said its Indian joint venture, JSW Severfield Structures, was "disappointing" with the group's share of losses totalling £3 million, compared to a almost breaking even in the previouis period.
Severfield's UK order book was steady at £168 milllion at May 1, compared to £172 million on November 1 last year, representing eight months of forward production capaciy. Its India order book rose to £41milllion from £34 million in November.
Ian Lawson, Severfield's chief executive officer who was appointed in November last year, said: "During the financial year Severfield has achieved substantial operational improvements across the group and delivered a significant turnaround in underlying profit before tax.
"Pleasingly, the group’s ongoing stabilisation and recovery generated increasing UK operating margins supported by a strong balance sheet and solid order book.
"While our Indian joint venture performed below expectations, actions are being taken to put the business in a sustainable position and we believe the market in India continues to present significant future growth opportunities.
"The development of a clear Group strategy in addition to the anticipated recovery in the core UK market means Severfield is well placed for future growth."
UK investment was kept at relatively low levels during the year while the business was reorganised and stabilised. Total investment was £2.2 million and represented low level replacement of some older plant and equipment.
However bosses said while the general stock of capital equipment across the business remains in good order, it is likely that the level of investment will need to increase to a more normal replenishment rate of £4-5million per annum in the future.