British Steel (britishsteel.co.uk) 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” turn-round.

The firm, which employs 3,000 people in Scunthorpe, said it had “significantly improved” its profitability despite a 44% increase in the cost of raw materials. The Long Products Europe business — formerly owned by Tata Steel and purchased on 1 June 2016 — had recorded a £79 million loss in the previous financial year.

British Steel said its focus for the coming year will be on increasing its steel-making capability and improving the quality of its products. The volume of steel produced in the 12 months ending 31 March 2017 was 2.7 million tonnes (2.9 million tonnes in 2015-16). Sales were 2.5 million tonnes (2.6 million tonnes in 2015-16).

British Steel’s plan to build a sustainable future is firmly on track after cost-saving initiatives, product development and market growth secured consistent profit in each quarter. Moreover, the company plans to invest
£40 million in 2017-18.

Roland Junck, British Steel executive chairman, said: “The transformation in this business is remarkable, and that is down to our people, who have embraced, engineered and led change.

“They are the reason we can today reveal the best financial performance by 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, having sacrificed 3% of their salary to make last year’s sale and the turn-round 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 that our employees, who have played such a vital role in the successful implementation of the turn-round plan, should share in our future success. I’m therefore
delighted to set out the employee share scheme to recognise their contribution.”