“The board has concluded that a change to the leadership of Severfield-Rowen is required to re-establish confidence with all the group's stakeholders,” the company announced this morning.
Chief executive Tom Haughey is standing down from this role and leaving the board with immediate effect. The chairman, John Dodds, will is taking on the role of executive chairman until a new chief executive is recruited.
Mr Dodds said: “My task, now, is to re-establish the credibility of the group with all its stakeholders, bring greater control and discipline to its operations and secure Severfield-Rowen's longer term financing."
John Dodds joined the board after he retired from Kier in 2010 after nearly 40 years there, the last seven as chief executive.
The competitive market and difficulties getting paid have had an impact at Severfield-Rowen. “The group’s UK businesses have been operating in a difficult climate with pricing pressure and protraction of contractual settlements posing significant challenges as clients and the supply chain compete harder in a shrinking market,” the board said.
“Since then our UK performance has been further, and materially, adversely affected by cost overruns on our 122 Leadenhall contract.
“As a result, the board intends to review expeditiously its current contract base and will provide a further update to the market, as soon as possible, when it has greater clarity on the financial impact of this exercise.”
As at 31 December 2012, net borrowings are £30m and the order book stable at £209m.
"Severfield-Rowen is the UK's market leader in structural steel and the development of its Indian activities is encouraging,” said Mr Dodds. “Our order book remains stable, despite challenging current conditions, and the board is confident that the longer term fundamentals of the group are strong. I am, however, extremely disappointed in the need to make this latest trading update.”
Tom Haughey joined the company as group commercial director in February 2002.
In a separate move, Severfield-Rowen chief operating officer Peter Emerson is retiring on his 60th birthday on 5 June. He has been with the company for 30 years.
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