Update on Leadenhall Building and Current Trading

Severfield plc, the market-leading structural steel group, announces an update on developments at the Leadenhall Building and its overall trading performance.

Leadenhall Building

The Group has incurred almost £1m of costs to date relating to a programme of bolt replacement works at the Leadenhall Building, a contract that was completed by the Group in 2013. This programme is being undertaken in conjunction with British Land, Laing O’Rourke and Arup and is likely to continue until the end of the calendar year. Whilst these works progress, all parties continue discussions to agree where the liability for the costs of the programme should rest. The Group’s costs are being regarded as exceptional and will not impact our underlying operating profit for the current year.

Current trading

The Group’s overall trading performance continues to be in line with management expectations. Its financial position remains satisfactory and net funds are expected to remain positive at the year end. UK The Group’s current year focus has been on both operational and margin improvements, rather than revenue, and continues to deliver in line with expectations. The UK order book of £194m has strengthened further in recent months and provides a solid platform for a return to revenue growth in the next financial year.

JSW Severfield Structures Ltd (India)

The Indian business has continued to perform well in the second half of the year and volume throughput in the factory coupled with better operational performance is enabling it to operate around break-even level. The order book of £39m remains solid although the short term pipeline of potential new orders has softened recently, reflecting more caution in the immediate economic outlook in India.