British Steel back in profit a year after £1 rescue bid

BRITISH Steel is back in the black 12 months after it was rescued for £1.

The company brought back to life in June 2016 after Tata Steel sold its Scunthorpe plant and other parts of the business, made a £47m profit last year.

Bosses hailed a ‘remarkable’ turnaround after losses of £79m the previous year.

It was the first time the steel maker has been in profit since 2009 when the industry collapsed amid oversupply.

The company is rewarding employees with a 5pc stake in the business and has hired 500 people since June 2016, with 50 starting this month. It has also now reversed a 3pc salary cut imposed on staff at the time of the takeover.

Executive chairman Roland Junck, the former chief executive of ArcelorMittal, said yesterday: ‘We have become a respectful member of the steel community. It could have gone the other way around.’

British Steel was reformed last year when London-based investment firm Greybull Capital bought Tata Steel’s long prod- ucts business during the downturn – for a nominal £1. Greybull agreed not to sell for at least three years.

Employees agreed to a 3pc salary cut to help bosses as they slashed costs and changed practices to turn the firm around.

Over the last year the company, which employs 4,400 in the UK, has made 2.7m tons of steel – slightly less than the year before. Clients included French and Italian railways as well as Crossrail in the UK.

Junck, 61, said that he was targeting around 10pc profit on potential revenues of more than £1.4bn. The company is now investing an extra £40m this year and is considering bringing electric arc furnaces to its Scunthorpe site.

However, around 70 jobs are threatened amid efforts to boost profits at its special profiles division, which makes steel for mining and other heavy industries, from sites in Skinningrove and Darlington. Some workers could move to Teesside. But redundancies are also possible.