Cutting edge restored to British Steel as profits return

● Group supplies all 57 km of track for Crossrail ● Staff 3% ‘ salary sacrifice’ comes to an end

British Steel has reported an underlying profit of £ 47 million just a year after its launch as an independent party from what was previously the steeply lossmaking Long Products Europe division of Tata Steel.

The workforce, which helped the rescue plan of new owners Greybull Capital by agreeinga one-year voluntary 3 per cent salary cut, have been rewarded with a collective 5 per cent holding in the company.

The Scunthorpe- based business had made a loss of £ 79m in the previous financial year to end- May 2016. British Steel said yesterday that its £ 126m turnaround – following four consecutive quarters of profit growth – had been achieved through a mixture of cost saving initiatives, product development and market growth.

It also came despite a 44 per cent hike in the cost of raw materials over the year. British Steel executive chairman Roland Junck said: “The transformation in this business is remarkable and that is down to our remarkable people who have embraced, engineered and led change.

“They are the reason we can today reveal the best financial performance in the long products business since 2007 and they are the reason I have great optimism for the future of British Steel.

“I’m delighted to be able to confirm that our employees will return to full pay today having sacrificed 3 per cent of their salary to make last year’s sale and the turnaround plan possible.”

British Steel said 500 new employees had joined since the company was launched last June, as it promised £ 40m of capital investment in 2017- 18.

The group added that it recently completed an ownership transfer securing a 50 per cent stake in the Redcar Bulk Terminal from Tata Steel, as part of the original buyout deal.

Among British Steel’s contracts is the supply of all the rail for the Crossrail project, 57 kilometres of track in total. Final delivery was made at the end of May.

The company said it was also working with government to lobbyfor council pro curementpolicies to ensure all public construction projects have access to British steel.

Peter Bernscher, British Steel chief executive, said: “British Steel has achieved a remarkable turnaround but this is just the beginning.

“Maximising and growing our steel making capability will be key, but success will also depend upon increasing our footprint in new and current markets and products.”