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Reborn British Steel gives shares to workers after return to profit Reborn British Steel gives shares to workers after return to profit
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Thousands of steelworkers have been granted a 5% stake in British Steel after the Scunthorpe steelworks, one of only two left in Britain, returned to profit.Thousands of steelworkers have been granted a 5% stake in British Steel after the Scunthorpe steelworks, one of only two left in Britain, returned to profit.
British Steel was re-formed last June when investment firm Greybull bought Tata Steel’s long products business, which is primarily the Scunthorpe steelworks, for £1 and renamed it. The British Steel name disappeared in 1999 when it merged with a Dutch rival to become Corus. Corus was later bought by Tata Steel. British Steel was re-formed last June when investment firm Greybull bought Tata Steel’s long products business, which is primarily the Scunthorpe steelworks, for £1 and renamed it. The British Steel name disappeared in 1999 when it merged with a Dutch rival to become Corus. The company was later bought by Tata Steel.
British Steel said its operations had recorded a profit of £47m for the year to 31 March, compared with a £79m loss in the previous financial year when they were still owned by Tata Steel. Roland Junck, executive chairman of British Steel, said the turnaround had been “remarkable”. British Steel said its operations had made a profit of £47m for the year to 31 March, compared with a £79m loss in the previous financial year when it was still owned by Tata Steel. Roland Junck, executive chairman, said the turnaround had been “remarkable”.
The company employs 4,800 people. They were asked to take a 3% pay cut when Greybull bought the business from Tata Steel but this has now been reversed and the workers will also receive a 5% stake in the business. The company employs 4,800 people. Employees were asked to take a 3% pay cut when Greybull bought the business but this has now been reversed. The workers will also receive a 5% stake in the business.
Tata Steel offloaded the Scunthorpe site as it battled to stop mounting losses in its UK business. The Indian company still owns the steelworks at Port Talbot, which is home to the only other blast furnaces in Britain. Tata Steel offloaded the Scunthorpe site as it battled to stop mounting losses in its UK operations. The Indian company still owns the steelworks at Port Talbot, home to the only other blast furnaces in Britain.
British Steel has supplied all the rail for the Crossrail project in London. It also supplies high-strength wire rods for deepwater mooring and steel for construction projects such as the new stand at Liverpool’s football stadium, Anfield.British Steel has supplied all the rail for the Crossrail project in London. It also supplies high-strength wire rods for deepwater mooring and steel for construction projects such as the new stand at Liverpool’s football stadium, Anfield.
The company said it sold 2.5m tonnes of steel compared with 2.6m tonnes in the previous year. The profit of £47m was measured by earnings before interest, tax, depreciation and amortisation.The company said it sold 2.5m tonnes of steel compared with 2.6m tonnes in the previous year. The profit of £47m was measured by earnings before interest, tax, depreciation and amortisation.
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.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.
“In 12 months we have started transforming from an inward-looking production hub into a profitable, more agile business by controlling costs, improving our product range and quality, and through strategic investments.”“In 12 months we have started transforming from an inward-looking production hub into a profitable, more agile business by controlling costs, improving our product range and quality, and through strategic investments.”
Unite, the trade union, welcomed the financial results but warned the steel industry remains under pressure and called the government’s lack of support “reprehensible”. Harish Patel, Unite national officer for steel, said: “British Steel now needs to build on its initial success by properly investing in its skilled workforce. Unite, the trade union, welcomed the financial results but warned that the steel industry remains under pressure and called the government’s lack of support “reprehensible”. Harish Patel, Unite national officer for steel, said: “British Steel now needs to build on its initial success by properly investing in its skilled workforce.
“However despite the positive results there remain serious challenges. The problem of China dumping cheap steel into the European market is a key issue. The failure of the EU to take action to tackle this problem is very worrying.“However despite the positive results there remain serious challenges. The problem of China dumping cheap steel into the European market is a key issue. The failure of the EU to take action to tackle this problem is very worrying.
“On a local and national level the government’s failure to support the steel industry and its lack of an effective industrial strategy is absolutely reprehensible. The government should be investing in British Steel’s future by providing relief on business rates, while also providing financial incentives to encourage research and development.”“On a local and national level the government’s failure to support the steel industry and its lack of an effective industrial strategy is absolutely reprehensible. The government should be investing in British Steel’s future by providing relief on business rates, while also providing financial incentives to encourage research and development.”