Newsletter 11 -January 2007

"Keeping you Informed"

Prices

                            Year to Dec 2006      Forecast:

Merchant Bar      +12%                         Prices stable

Heavy sections   +35%                         +£30/t Jan 1st '07 another

                                                              increase March/April '07

Hollow Sections   +18%                       Prices under pressure

Supply

No major problems at present although some delays with certain sizes of heavy section, please ask us for details.

Demand
Overall demand is quiet but we are optimistic that demand will improve during 2007. Worldwide demand for steel continues to increase at an accelerating rate and although new capacity is coming on stream this can lead to short term stock adjustments on prices.

Tomrods Limited - Annual Review

Annual Sales in tonnes are 11% up on 2005 and turnover has increased by 8%. Profitability has been good overall and 2006 will turn out to be one of our better years.

Capital Expenditure during 2006 included the purchase of a Gietart Shotblast and Preservation line at a cost in the region of £400,000.00. We are now ahead of our competitors by being able to offer water based painted steel which meets all the new European legislation on Health and Safety grounds. In addition we have bought a 20% stake in midland based reroller Legg Brothers Limited, which produces about 6,000 tonnes of small sections per annum from 13x13x3 Angles to horse shoes and other special sections.

Human Resources We experienced some short term difficulties when Gail Jackson and Sarah Jacobs both left to increase their families. We are however delighted to welcome the arrivals of Frankie Junior and Jasmine and we wish them both, along with their families, every success possible. We also welcomed the arrival to Tomrods of Laurence McDougall (Director), Nick Howarth, Aleksis Garnins, Viktors Litvinov, David Maycock (Works), Sally Dixon, Bernard O'Connell (Sales), Veronica Robinson (Transport) and Jacek Przybyl and Adele Bradfield (Purchasing).

All Steels Limited

With the arrival of Laurence McDougall in April we formed a new company to carry on trading in bulk supplies of imported steel sections. Through Laurence's previous experience and contacts, along with the able assistance of Scarlett Reeves and John Callander (J C Steels) we have managed to sell 13,500 tonnes. 2007 promises to continue this trend and we look forward to an exciting year.

Finally everyone at Tomrods would like to wish all our customers, suppliers and friends a very peaceful and prosperous New Year. We look forward to being of assistance during 2007.

Thank you for reading this and if you have any comments about Tomrods Ltd or our website please email the undersigned at johnt@tomrods.co.uk

John Thompson
Managing Director