Teesworks Ltd, the UK’s largest freeport and a major low-carbon industrial regeneration site in the North of England, has posted a slump in revenue and profits, one year after a government probe into its sale to private owners.
The industrial freeport recorded a dramatic slump in turnover from almost £143 million in 2023 to just over £22m in the year to the end of March 2024. Net profit after tax fell from approximately £54m to £2.7m.
In its full accounts statement for the year, Teesworks cited “delays to progress” over the past 12 to 18 months, with “investment decisions being delayed because of forthcoming national elections”.
The latest accounts also show that the company paid out £20.25m of dividends to shareholders in the financial year to the end of March 2024, up from a little over £3m a year earlier.
The former Redcar steelworks site is the location for the Net Zero Teesside Power gas-fired power plant that is expected to be developed with carbon capture at the Teesside business zone from mid-2025.
Net Zero Teesside Power, a joint venture between BP and Equinor, is a beneficiary of funding under the government’s £21.7 billion track one carbon capture and storage funding to be ploughed into the country’s industrial heartlands.
The drop in profits follows a government investigation in 2023 into the transfer of the industrial site to private ownership, six years after the closure of the Redcar steelworks in 2015.
That report found no evidence of wrongdoing but accused the sale process of a lack of transparency and made 28 independent recommendations.
Formerly a public private partnership jointly owned by South Tees Development Corporation and the UK government, Teesworks was transferred to 90% private ownership in 2021, when a majority of the equity was sold to companies owned by Martin Corney and Chris Musgrave.
DCS Industrial has the largest shareholding after acquiring 40% from South Tees, which kept a 10% stake, while its two joint owners Northern Land Management and JC Musgrave Capital together hold the remaining 50% of the equity.
Private partners made £93m from the transfer of the site and land ownership. Its accounts filing a year ago showed that the company’s owners generated £93.3m from leases and land options and an additional £49.5m from the disposal of scraps and aggregates.
The company cited the long wait for the government inquiry to be conducted on the Teesworks project, which was commissioned in May 2023 but not concluded until January 2024, but said “swift progress” across the site is expected to resume since the report finalised.
Teesworks said that “lease terms continue to be negotiated” for various projects at the industrial business zone and that contracts have progressed across 400 acres of the 2,600 acres of land it owns, with more contracts expected to be finalised within a year of filing.
It said ground surveys and infrastructure assessments were “under way” while in some cases the ground and infrastructure conditions “carry risk of uncertainty” and may require cost assessment.
Teesworks is being developed and regenerated into a new business zone for low-carbon industries, attracting offshore wind and low carbon initiatives such as energy from waste and the Net Zero Teesside development.
In addition to the CCUS project at the freeport, BP also plans to build blue and green hydrogen production facilities in Teesside which are together expected to generate nearly 2,000 jobs.
The Northern Endurance Partnership, a consortium between BP, Equinor and TotalEnergies, is developing infrastructure to transport CO2 from carbon capture projects across Teesside and the Humber, collectively known as the East Coast Cluster, to North Sea storage facilities.
Plans were also submitted to Redcar and Cleveland Council in December for a £62m battery storage facility on the Teesworks site.
Teesworks Ltd entered into a deal with Energy Optimisation Solutions to create a battery energy storage system on three acres of land at the Long Acres part of the Teesworks site.
The battery storage project is expected to have capacity to store 100 MW of green energy on the grid and cut carbon emissions by 4,000 metric tons a year.
