CHALLENGING market conditions and falling prices have taken their toll on a historic Bradford-based steel company which has cut jobs and restructured.

Pre-tax profits at family-owned Barrett Steels Ltd , which is celebrating its 150th anniversary this year, slumped during the financial year to September 30 from £8.8 million to £1.3 million.

Its woes reflect the problems of the UK steel industry which has seen closures and major cutbacks at steel plants such as Redcar, Port Talbot and Sheffield-based Forgemasters.

Accounts deposited at Companies House show that, following growth in previous years, Barrett Steel cut employee numbers as turnover fell by nine per cent to £285 million, in spite of a one per cent rise in sales volumes .

Export sales fell from £44.2 million in 2014 to £33.2 million due to a sharp decline in Barrett's key oil and gas market.

Restructuring costs totalling £2.4 million included £1.6 million of redundancy payments and £800,000 to close its forge and machine shop operation s in Newcastle and Ayr following trading losses.

Barrett Steel maintained stocks at the same level as 2014 but the value of its steel fell by 14 per cent from £66.9 million to £56.7 million, reflecting lower industry prices.

In spite of the difficult trading conditions, Barrett maintained its capital investment programme in the UK and the United States, with £6.6 million spent during the year, mainly on machinery and steel processing operations, land, IT upgrades and heavy goods vehicles.

The company raised £835,000 by selling the Woodberry Tools business , based near Bristol.

Roy Butcher said that, in spite of "very challenging" market conditions, there were no signs of diminishing demand in Barrett Steel's traditional construction market and the company continued to invest in added value processing . Its tubes division was also seeing opportunities in several of its traditional transport and automotive markets,both in the UK and overseas.

He expressed hopes that scrap and iron ore prices were bottoming out and that a prolonged period of price reductions was ending.

Mr Butcher said: " We remain committed to our core stock holding and added value oil and gas business developed over the past five years, although we do not see any signs of any recovery until late 2016/early 2017.

"Overheads have been cut accordingly across all businesses to mitigate the ongoing impact on profitability.

"The recent announcement from Tata, SSi and Caparo give an indication of the paid being felt by the worldwide steel industry with prices at current levels . The impact of worldwide over capacity must inevitable lead to capacity reductions