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 I was a Woman Against Feminism too
- 2 Is Gideon Levy the most hated man in Israel or just the most heroic?
- 3 Chief Ebola doctor in Sierra Leone has contracted the deadly disease himself
- 4 Students offered grants if they tweet pro-Israeli propaganda
Lana Del Rey: 'I have slept with a lot of guys in the industry'
Vladimir Putin employs a full-time food taster to ensure his meals aren't poisoned
Chief Ebola doctor in Sierra Leone has contracted the deadly disease himself
Students offered grants if they tweet pro-Israeli propaganda
Israel-Gaza conflict: Israel may have committed war crimes, says UN human rights chief
Malaysia Airlines MH17 crash: Vladimir Putin is given 'one last chance' to end hostilities in Ukraine
The 'scroungers’ fight back: The welfare claimants battling to alter stereotypes
The truth about conspiracy theories is that some require considering
Malaysia Airlines MH17 crash: Ukrainian military jet was flying close to passenger plane before it was shot down, says Russian officer
Malaysia Airlines MH17 crash: Massive rise in sale of British arms to Russia
Malaysia Airlines MH17 crash: victims’ bodies bundled in black bags and loaded onto trains
iJobs Money & Business
£350 - £400 per day: Orgtel: PMO Analyst - Banking - London - £350 -£400 per d...
£300 - £350 per day + competitive: Orgtel: Cost Reporting Manager - MI Packs -...
£35000 - £40000 Per Annum plus 23 days holiday and pension scheme: Clearwater ...
£475 - £525 per day: Orgtel: Test Lead, London, Investment Banking, Technical ...