Severfield-Rowen hit by Cheesegrater skyscraper costs
Tuesday 19 February 2013
Spiralling costs on a raft of contracts including the City’s Cheesegrater skyscraper today dealt a £20 million blow to the UK’s biggest structural steelwork firm.
Severfield-Rowen has been forced to gain breathing space from lenders, who agreed to waive tests of its banking covenants, and is poised to tap major shareholders for £50 million.
The firm admitted the “technical challenges” of the Leadenhall Street building are “significantly greater than originally estimated and will require longer timescales and greater resources to complete”, turning a contract expected to make a profit into a £9.9 million loss.
A root and branch review of all its contracts after the cost overruns emerged last month also uncovered losses of £10.2 million on another eight deals. This will tip Severfield heavily into the red for 2012 while the board’s expectations for this year and next are “somewhat lower”.
Former chief executive Tom Haughey was sacked last month after the board said a “change to the leadership is required to re-establish confidence with all the group’s stakeholders”.
Severfield is also set to take a far more conservative view of risk after its review “identified a requirement for stronger contracting processes and discipline notably in execution and risk assessment, particularly in relation to its more complex contracts”.
Executive chairman John Dodds, who took the helm temporarily following Haughey’s departure, said he was encouraged by the backing of the banks and leading shareholders. The shares shed 9%, or 6.75p, to 71.75p.
Severfield’s banks are RBS and National Australia Bank, while the top five shareholders are Prudential, M&G Investments, JO Hambro, Aviva Investors and Threadneedle.
- 1 Revolutionary lost Caravaggio painting 'Mary Magdalen in Ecstasy' identified
- 2 McKamey Manor: This 'extreme' haunted house is the stuff of nightmares
- 3 Russell Brand says he will 'probably' give up acting to focus on his revolution
- 4 Watch what happened when food critics were unknowingly served McDonald's
- 5 David Beckham's Haig Club whisky is exactly what’s wrong with the Highlands
Putin accuses US of causing global instability
Eleven members of same family hospitalised after eating deadly pufferfish
FCKH8: YouTube reinstates provocative anti-sexism video showing young girls swearing
Phone-hacking: The Piers Morgan connection - Mirror admits some stories during Morgan's tenure may have been obtained by illegal means
Russell Brand says he will 'probably' give up acting to focus on his revolution
Of course, teenage girls need role models – but not like beauty vlogger Zoella
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Support for EU membership 'at highest level since 1991' with most Brits wanting to stay 'in'
Thousands with degenerative conditions classified as 'fit to work in future' – despite no possibility of improvement
Tony Blair 'says Ed Miliband will lose 2015 general election'
Attacks on 'Ukip Calypso' show how skewed people’s priorities are
iJobs Money & Business
£60000 per annum: Ashdown Group: Compensation and Benefits Manager - Compensat...
£30000 - £35000 Per Annum plus excellent benefits: Clearwater People Solutions...
£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...
£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...