Belfast Telegraph

Revenues rise at steel firm Walter Watson but outlook for 'uncertain'

Founder: Walter Watson
Founder: Walter Watson
Ryan McAleer

By Ryan McAleer

Northern Ireland steel company Walter Watson has reported an 8% rise in revenues to £55.8m.

But the directors at the Co Down group said the outlook for 2019 remains less certain.

The largest family-owned structural steel fabricator on the island of Ireland, Walter Watson posted a £900,000 drop in pre-tax profits to £3.2m for the year to December 31, 2018.

The Castlewellan-based group, which employs 238 people, described it as a "robust performance given the increasingly competitive trading conditions prevalent in our markets".

Founded in 1975 by Walter Watson, the group's operations are now divided between structural steel, reinforcement, steel stockholding, cranes and an agri division, which engineers and manufactures agricultural machinery.

Mr Watson remains chairman of the group, which also has offices in Kilmarnock in Scotland and Kildare in the Republic.

The company works with major clients across the private and public sector, completing contracts of up to 7,500 tonnes.

Sign In

The steel firm appeared to be left relatively unscathed by the move last year by the United States to start imposing levies on the imports of steel and aluminium from the EU.

Walter Watson's annual group strategic report, which was made public yesterday, said: "Planned procurement and forward buying of raw materials had a significant positive influence, in what was a rising market, in terms of steel price."

But the group said its margins had still moved from 15% in 2017 to 13% in 2018 as a direct result of the rise in the wholesale price of steel throughout the year.

While they acknowledged the ongoing uncertainty in the economy, the group's directors said there had been positive indicators during 2018.

They said the level of irrecoverable debt had once again been greatly reduced in 2018.

The firm also said that investment in its core businesses continued last year, with the continuation of a capital investment program to modernise its plant and machinery at its 21-acre site in Castlewellan.

The directors added they remained hopeful that the signs of recovery in the traditional construction market will continue into the new financial year.

They said the firm's order book "remains solid", representing around six months of forward production capacity.

While the report states that the group has the financial resources along with the future orders from customers to manage its business risks, the directors anticipate challenging marketplace conditions in 2019. "The outlook for 2019 is less certain than it was at the same point in time last year," it adds.

"The directors believe that due to challenging marketplace conditions in 2019, it will be a year of consolidation.

"However, the directors believe that the group is well positioned for future growth."

Walter Watson was among the 60 Northern Ireland firms who signed a Confederation of British Industry (CBI) letter in March 2019, calling on the Government to avoid a no-deal Brexit.

The letter stated that the companies "believe that failure to approve a deal with Europe on the UK's withdrawal from the EU will have significant repercussions for the local economy".

It said: "Such a scenario will both hinder indigenous and foreign direct investment, it would result in significant job losses and will stifle opportunities for the next generation across Northern Ireland."

Other signatories included Bombardier, Coca-Cola Hellenic, Danske Bank, Fane Valley and Norbrook Laboratories.

Belfast Telegraph