Slump in steel scrap prices hit Norton’s 2015 profits

United Kingdom – Annual turnover at major UK metal recycling company S. Norton fell to £139 million (Euro 160 million) for the year to December 31 2015 from £228 million in the previous year as a direct consequence of scrap steel prices dropping from an average of £245 to £140 per tonne.

The company reported a £27.6 million post-tax loss for 2015 compared with break-even in 2014. The principal reason for the exceptional loss recorded in the 2015 accounts was a write-down in the value of the company’s substantial metal stocks.

In particular, the company had holdings of some higher-value scrap grades at year-end which, although seeing some of the worst price reductions, are expected to recover strongly when markets improve. The slump in the world price of steel and other metals is blamed on excess production in China and the global economic slowdown.

‘This is the same crisis that triggered the break-up of the UK’s biggest steelmaker Tata Steel,’ it is pointed out. S. Norton’s chairman John Norton comments: ‘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.’

The family-run firm has metal recycling operations in Liverpool, Manchester, London and Southampton.