Britain’s last independent steelmaker sank further into the red last year, hit by the oil and gas downturn against a backdrop of crisis in the wider industry. Sheffield Forgemasters International said it would lay off up to 100 workers in January, just weeks after closing the books on a second consecutive year of losses. Its woes mirror those ravaging the wider British steel industry, which has buckled under a collapse in prices for the metal amid a global oversupply. The sector’s future is in doubt with the country’s biggest producer, Tata Steel UK, up for sale by its Indian owner. Sheffield Forgemasters, which makes high-value steel products, posted a pre-tax loss of £7.6m in 2015, as it booked a one-off restructuring charge of £1.7m.
For the previous reporting period the company used an 18-month set of accounts, which showed a loss before tax of £10.6m. On a pro-rata basis, this implies that losses at the pre-tax level deepened by around £0.5m last year.
Tony Pedder, chairman, said that factors such as high energy costs, low crude prices and the lingering global economic downturn had affected trading.
“However, we are confident that the company is heading in the right direction and that our work to maximise efficiencies, break into new markets and continue investment into new technologies and processes will pay dividends in years to come,” he added.
The 300-year-old company makes steel for its own castings and forgings to manufacture parts for the nuclear, engineering and oil industries, as well as supplying ingots and coil rolls to others. It has said it is not affected by Chinese dumping of steel that has hamstrung commodity steel producers.
Despite the gloom surrounding the industry, management at the South Yorkshire engineering specialist said benefits from a turnround plan and steps to streamline the business were feeding through.
Taking out the exceptional restructuring costs, it pointed to annual operating losses of £4.8m in 2015, which it said was a pro rata reduction of more than £3m. Revenue was £72.8m, compared with an annualised £81.6m for 2014.
Graham Honeyman, chief executive, said: “The next 12 months will require a lot of work but we have already made vast inroads into restructuring the business towards profitability and are anticipating a stronger year end in December 2016”.
The 2014 loss was the company’s first since Mr Honeyman led a management buyout that saved the company from liquidation in 2005.