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are suggesting that without Chinese exports the rest of the world now faces a structural shortage in<br />
steel capacity, which will further fuel the rise in prices we have experienced in the first quarter.<br />
Never has there been a more striking contrast or disconnect between the financial world with its<br />
credit problems and the real world of steel with its apparent growing demand. The question is how<br />
much longer can these two different worlds inhabit the same universe? The past history of the steel<br />
industry suggests that prices will not go on climbing for ever and the bigger the rise, the greater the<br />
risk of a correction. If the credit crisis continues, it will reduce both the purchase of consumer<br />
durables like cars and requirements for new retail and commercial construction. There will be an<br />
adverse impact on investment in general and therefore on the demand for steel. We therefore retain a<br />
healthy caution about what the future may bring. As far as our own prospects are concerned, we are<br />
confident that we have put in place the building blocks for continued success. We expect further<br />
growth and another good year in 2008, based on strong current trading and our substantial forward<br />
order book.<br />
My thanks again to our customers, our suppliers and our bankers for their continued support and to<br />
our dedicated staff for all their hard work. We look forward to our future together with confidence.<br />
Ralph Oppenheimer<br />
Executive Chairman<br />
4 th April 2008<br />
Editors’ notes<br />
Consolidated profit and loss account<br />
For the year ended 31 December 2007<br />
Ends<br />
Year to Year to<br />
31/12/2007 31/12/2006<br />
£'m £'m<br />
Turnover 4,254 3,308<br />
Cost of sales (4,075) (3,157)<br />
Gross Profit 179 151<br />
Distribution costs and administrative expenses (87) (72)<br />
Operating profit 92 79<br />
Exceptional Items 16<br />
Net interest payable (43) (28)<br />
Profit on ordinary activities before tax 65 52<br />
Taxation (20) (15)<br />
Profit on ordinary activities after tax 45 37<br />
Minority Interests (1) (4)<br />
Profit attributable to shareholders 44 33