British Steel workers 'return to full pay' after 'remarkable' turnaround
British Steel has reported a profit of £47 million just a year after its launch and is to give workers a 5% stake in the business after a "remarkable" transformation.
The company, owned by investment firm Greybull Capital, completed the purchase of Tata Steel's Long Products Europe business exactly a year ago, with losses of £79 million in the previous financial year.
The firm, which employs 3,000 workers in Scunthorpe, said it had "significantly improved" profitability despite a 44% increase in the cost of raw materials.
The turnaround has seen 500 workers recruited, with 50 starting this month, employees given a 5% stake in the business and the end of a 3% "salary sacrifice".
British Steel said its focus for the coming year will be on increasing steelmaking capability and improving the quality of products.
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% of their salary to make last year's sale and the turnaround plan possible.
"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.
"After significant capital investment, we have made a small net profit and although it hasn't been easy an entrepreneurial spirit is starting to flow through British Steel, it means we are fast becoming the efficient, customer-focused business we need to be.
"As we look to further grow the business it is important our employees, who have played such a vital role in the successful implementation of the turnaround plan, should share in our future success.
"I'm therefore delighted to set out the employee share scheme, an almost unique initiative in our industry to recognise their contribution."
Union spokesman Paul McBean said Britain needed a thriving steel industry, adding: "That's what we're intent on delivering and that's what the new government must support because today's news isn't mission accomplished.
"The share scheme and reinstatement of employees' full salaries are both deserved and welcomed.
"I'm also pleased to see British Steel is continuing to make the significant capital investments this business needs but people should be in no doubt, a lot of hard work lies ahead."
The company supplied all the rail for the huge Crossrail project in London.