Severfield-Rowen cuts expectations for 2011

STRUCTURAL steel company Severfield-Rowen issued a profits warning this morning, saying that the outlook for the second half of 2011 is "poor".
By The Newsroom
Published 27th Jan 2011, 09:13 BST
Updated 27th Jan 2011, 09:13 BST

The Thirsk-based company has cut its 2011 outlook on depreciating demand and surging steel prices, but said it saw prospects of some recovery in early 2012.

Severfield's shares tumbled on the news, making it the biggest loser on the London Stock Exchange.

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The company said that overall demand in UK would be lower than expected due to slower economic recovery and deferment of a number of commercial office and power sector projects until 2012.

The UK construction sector fell 3.3 per cent in the fourth quarter, its biggest quarterly decline since the start of 2009 when the country's economy was deep in recession.

Severfield said pricing will remain very tight through 2011 and will reflect deterioration in sector mix from its previous forecast.

The group said that 2010 results would be in line with expectations.

While maintaining a confident outlook for 2012 and beyond, the company said it would stick to its prudent dividend policy going forward.

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