The company behind the massive Teesworks development has seen a massive drop in revenue and profits as it struggled to attract new tenants to the site.
Last year Teesworks Limited - which hit the headlines and was the subject of a Government probe after it was passed to 90% ownership by two private developers - reported revenues of 拢142.9m and and operating profit of 拢67m. But new accounts for the year ended March 31, 2024, show that turnover fell to 拢22.2m, with most of that income coming from the sale of scrap and aggregates recovered from the site. The company鈥檚 operating profit fell to 拢1.8m.
Despite the drop in income, the company paid shareholders a dividend of 拢20.2m, a big increase from the 拢3m paid last year.
Director Martin Corney said Teesworks鈥 operations during the year had been hampered by companies delaying investment decisions because of the review into the site, as well as July鈥檚 General Election. He said that development would now continue 鈥渁t pace鈥 and would involve investment running to hundreds of millions of pounds.
Recent months have seen a number of announcements about developments at the site, including plans for a 拢62m battery storage facility and progress on an energy and carbon capture scheme.
The Teesworks scheme is Europe鈥檚 largest brownfield site, covering 2,600 acres on the banks of the River Tees. It includes the site of Redcar 鈥檚 former steelworks and is being developed for a range of industrial uses including wind turbine manufacturing and carbon capture.
But the scheme has proved controversial after Tees Valley mayor Ben Houchen oversaw a shift from a 50:50 public-private partnership to an arrangement where Teesworks Limited was 90% owned by Mr Corney and his partner Chris Musgrave.
After concerns were raised by a number of local politicians, the previous Government set up an independent review of the scheme. Published last January, that report found no evidence of corruption or illegality at the development, but outlined a number of significant problems with governance and transparency around the mayor鈥檚 South Tees Development Corporation.
That review recommended the development corporation should seek to "renegotiate a better settlement for taxpayers under the JV agreement", but no changes have currently been made.
In the accounts, Mr Corney says: 鈥淪ome delays to progress have been experienced over the last 12-18 months with investment decisions being delayed because of forthcoming national elections and whilst an independent review was conducted on the Teesworks project. However, as this review has now concluded, swift progress across the site can resume.
鈥淭he Teesworks site is undergoing a transition away from public investment used to kick start the repurposing of the site, into a private sector led remediation and redevelopment phrase. It should also be noted, notwithstanding the great progress to date, future activity of the regeneration of the site will be across a number of years, and at significant cost that is forecast to be in the hundreds of millions of pounds.
鈥淕round surveys and infrastructure assessments are all under way and while ground conditions and infrastructure conditions in a number of cases remain unknown and therefore carry risk of uncertainty and cost assessment, the board are confident that progress will continue to be made and at an expedited pace. Indeed, the original masterplan for the site forecast a 25-year delivery time horizon which, at the current pace of progress, will be reduced by at least a decade.鈥
A spokesperson for Teesworks Ltd said: 鈥淎s an independent study has highlighted, the Teesworks site has already secured private investment interest of 拢4.96bn which will create more than 3,470 operational jobs, a further 10,000-plus supply chain jobs and another 6,900 construction jobs, as well as generating an anticipated 拢79m a year in business rates.
鈥淲e are currently working with partners on a number of large-scale development projects. These are complex projects which require extensive and detailed planning, design and legal processes, but we are immensely positive about the development of the Teesworks site and we are looking forward to the huge progress we have already made on site continuing over the next 12 months.鈥
