Barrett Steel improves performance in fiscal 2017

UK stockholder Barrett Steel produced an improved set of year-on-year results in its latest company report monitored by Kallanish. The country’s largest independent steel stockist’s performance continues to be a bellwether for the state of the distribution sector in the UK.

In his statement, chairman James Barrett gives an optimistic outlook on prices for the company’s fiscal year ending 30 September 2018. He says that the company expects steel prices to continue to rise due to increased import and conversion costs in the steel supply chain. The impact of the Brexit vote has not had a material impact on demand in its traditional market of construction although the situation “… remains uncertain,” Barrett adds.

The year ended 30 September 2017 saw a general continuation of the steel price increases seen in the previous financial year due to cost pressures in steel supply chains. These cost pressures have been caused by negative currency fluctuations and increasing raw materials prices.

Stocks at the year-end increased from £55.5 million ($75.3m) to £63.2m. The group continues to follow the strategy of managing risk by insuring the debtor ledger, it confirms. Barrett Steel also implemented capital investments worth £4.5m during the year. These included investments in new processing equipment, IT developments and transport fleet upgrade.

Group turnover for the year increased by 14% to £292.7m. Profit before tax improved from £4.3m to £5.9m same basis, but gross margin fell from 33% to 30% due to price competition in the market, Barrett Steel confirms.

Kallanish