Annual turnover at one of the UK’s larger metal recycling businesses, Liverpool-based S Norton & Co tumbled in 2015 to £139 million compared to £228 million a year earlier.
The figures were contained in the company’s annual results for the year ended December 31 2015 which were published this week.
S Norton & Co head office in Liverpool
Commenting on the figures, the company noted that company had “been hit by the global steel industry crisis”.
The reduction in turnover is put down to being “a direct consequence of scrap steel prices dropping from £245 to £140 per tonne over that period.”
The company reported a £27.6 million post- tax loss for 2015 compared with break-even in 2014 and said that the reason for the exceptional loss posted in the 2015 accounts was a write-down in the value of the company’s substantial metal stocks.
In a statement, S Norton & Co said; “In particular, the company had holdings of some higher value scrap grades at the year-end which, although seeing some of the worst price reductions, are expected to recover strongly when markets improve.”
Capacity
2015 saw a fall in the price of steel, partly due to overcapacity in China, with knock-on impacts on the scrap sector. While markets have improved in 2016, they remain volatile and at relatively low pricing levels still.
In the financial report, chairman John Norton described the company’s last financial year as ‘exceptionally challenging’, and said this was a position seen by other major scrap metal processors in the UK.
Mr Norton commented: “Despite this loss, the company managed to significantly reduce its bank debt during the year, and indeed through much improved trading in 2016 we have now managed to achieve a cash positive position. During 2015, we also continued to invest in high quality processing equipment at all our sites, as part of our commitment to creating a stable long-term future for the business.”
Scrap prices fell in 2015
The family-run firm has long-established metal recycling operations across the UK in Liverpool, Manchester, London and Southampton. It recently restructured, with the addition of four new Board Directors and promotion for Armen Arslanian, commercial manager, “so that the owners John, Charlie and Matt Norton can devote more time to strategy and longer-term direction of the business”.
According to purchasing director Charlie Norton, “Prudent management left the company in a strong position at the end of 2015. Trading for the first half of 2016 has been profitable and the company is currently generating strong cash flows. We recognise the need to invest for the future and are expecting to develop the business in a number of new directions over the next few years.”
Commenting on any potential impact following the vote to leave the European Union, Charlie added: “In the months immediately after the Brexit vote, we haven’t seen a huge reduction in scrap volumes and of course the fall in the value of sterling is a help to exporters like us. However, a weaker economy could mean less scrap is generated in the medium term.
“I think everyone is waiting until we get further economic data before working out whether there really is loss of confidence in the economy and what impact, if any, this may have.”
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Source: letsrecycle.com Metal
