Fears grow of pounds 10m cost over-run at Spring Ram: Commissioning problems emerge at new door-making factory

FEARS are growing that Spring Ram, the kitchens and bathroom company, is facing a pounds 10m cost over-run on a new door-making factory in Barnsley.

Initial expected costs of pounds 20m are said to have spiralled to pounds 30m because of serious commissioning problems.

The fears have surfaced as Stuart Greenwood, finance director, faces growing pressure to resign in the wake of last week's profits warning.

The troubled group's relationship with its auditors Arthur Andersen has also come under strain.

Results for 1992 are due today. Last week the shares in the Leeds-based group halved in value after a bleak profits warning. The kitchens part of the business is expected to make pounds 16m, but the bathrooms operation may report losses of pounds 5m.

The 1991 annual report boasted that the new Barnsley plant beside the M1 - being built for Spring Ram's Regency Doors subsidiary - would 'utilise state-of-the-art woodworking machinery, much of it computer controlled'.

With overall profits set to slump from pounds 37m in 1991 to pounds 26m in 1992, close observers are suggesting that the relationship between Spring Ram and Arthur Andersen is becoming increasingly strained. Last-minute changes to accounting policies seem to be responsible for at least part of the profits shock.

Andersen has audited Spring Ram's accounts since it was floated in 1983. Revelations last Thursday come just four months after financial irregularities were discovered at Balterley Bathrooms, another subsidiary of Spring Ram.

Arguments between Spring Ram and Andersen in the wake of the Balterley affair narrowly avoided ending in court action.

Institutional investors want wholesale changes to the board. Stuart Greenwood, finance director, is taking most of the heat. He was formerly with Henry Barrret, a Yorkshire steel stockholding company that expanded quickly in the late 1980s and early 1990s, but went into receivership last November.

As well as seeking a replacement for Mr Greenwood, investors want at least two non-executive directors appointed to the board. They would also like to see Bill Rooney, chairman and chief executive relinquish one of the roles.

Concerns also centre on how Spring Ram has been booking profit on its product. Thursday's statement said: 'Profits amounting to pounds 5.6m will now fall into 1993' - indicating that Spring Ram was taking profit before goods were sold.

Start your day with The Independent, sign up for daily news emails
New Articles
tvDownton Abbey Christmas special
Arts and Entertainment
Wolf (Nathan McMullen), Ian (Dan Starky), The Doctor (Peter Capaldi), Clara (Jenna Coleman), Santa Claus (Nick Frost) in the Doctor Who Christmas Special (BBC/Photographer: David Venni)
tvOur review of the Doctor Who Christmas Special
News
peopleIt seems you can't silence Katie Hopkins, even on Christmas Day...
News
news
PROMOTED VIDEO
News
i100
Arts and Entertainment
Left to right: Stanley Tucci, Sophie Grabol and Christopher Eccleston in ‘Fortitude’
tvSo Sky Atlantic arrived in Iceland to film their new and supposedly snow-bound series 'Fortitude'...
Arts and Entertainment
Jenna Coleman as Clara Oswald in the Doctor Who Christmas special
tvForget the rumours that Clara Oswald would be quitting the Tardis
Arts and Entertainment
Japanese artist Megumi Igarashi showing a small mascot shaped like a vagina
art
News
The Queen delivers her Christmas message
newsTwitter reacts to Her Majesty's Christmas Message
Arts and Entertainment
tv
Life and Style
fashion
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

SThree: Trainee Recruitment Consultant - LONDON

£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

Day In a Page

A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

Christmas without hope

Gaza fears grow that conflict with Israel will soon reignite
After 150 years, you can finally visit the grisliest museum in the country

The 'Black Museum'

After 150 years, you can finally visit Britain's grisliest museum
No ho-ho-hos with Nick Frost's badass Santa

No ho-ho-hos with Nick Frost's badass Santa

Doctor Who Christmas Special TV review
Chilly Christmas: Swimmers take festive dip for charity

Chilly Christmas

Swimmers dive into freezing British waters for charity
Veterans' hostel 'overwhelmed by kindness' for festive dinner

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all