The steelwork group that crashed into the red when it overspent on its contract for the “Cheesegrater” skyscraper in London says its can seen light at the end of the tunnel.
Severfield-Rowen, whose current projects include the new London headquarters of Swiss bank UBS, was forced into an emergency £45m rights issue and sacked its chief executive after uncovering problems on nine contracts. It underestimated the technical challenges of erecting the the 225m (737ft) Leadenhall Building – nicknamed “the Cheesegrater” – at 122 Leadenhall Street, and was forced to pump more time and money into the project.
Severfield’s shares have tumbled by two-thirds since January and slipped another 0.5p to 55p even as it reported “early signs that the market may be marginally improving”. Its order book is slightly lower at £178m but, crucially, Severfield has stemmed the flow of profits warnings that rocked the business. An overhaul of the UK operations is “substantially complete” and it is taking a more selective approach to contract bidding.
Severfield is still seeking a chief executive following the departure of Tom Haughey. The executive chairman, John Dodds, who is running the business temporarily while the search continues, said: “Management is confident that the group is progressing in line with its expectations and will be well placed to benefit from any recovery in the UK construction market.”