Pre-tax profits at the UK’s biggest independent stockholder plummeted to £1.3m in the year to September 2015 from £8.8m previously.

The firm, which employs over 1,000 staff in 29 UK outlets, suffered a £2.4m hit in restructuring costs, predominantly from redundancy payments but also from write downs caused by the closure of its forge in Newcastle and machine shop in Ayr.

Steel stocks remained stable at 94,000 tonnes, although its value fell 14% on the previous year due to cost price falls.

Despite volumes of sales rising 1% over the year turnover slid 9% to £285m.

Another tough year did little to help attempts to reduce net debt which edged up to nearly £63m.

Chairman Roy Butcher said Barrett Steel’s bankers remained supportive with facilities now in place until May 2017.

“While the market conditions remain very challenging there are no current signs of demand diminishing in our traditional construction market.

“We do believe we are getting towards the end of the prolonged period of price reductions with scrap and iron ore prices appearing to be very close to the bottom of their price cycle.”

He added: “The recent announcements from Tata, SSI and Capro give an indication of the pain being felt by the worldwide steel industry at present with prices at current levels.

“The impact of worldwide over capacity must inevitably lead to capacity reductions.

“The company continues to have the support from its suppliers and remains confident of our continuity of supply through good relationships built up over the years.”