STEEL group Severfield-Rowen saw its share price plummet yesterday after it warned of softer markets and lower than expected growth this year.

Confirmation that its order book had reached a record £440m was not enough to ease nervous investors and the group's share price slumped almost 40 per cent to less than 240p by lunchtime trading.

The North Yorkshire-based company, which has fallen victim to a slowdown in commercial property schemes, said that last year's profits would come in at £42m, below market expectations of about £56m.

The forecast is ahead of 2006 figures, when Severfield-Rowen delivered record results in all its core businesses and reported a 54.1 per cent jump in pre-tax profits, to £30.3m.

In the first half of last year, the company, based at Dalton, near Thirsk, posted pre-tax profits of £15.9m on revenues of £137.6m.

It said: "As we begin 2008, the group is seeing a softening within some of its key markets. However, the board remains confident the high level of demand for Severfield-Rowen's unique, wide ranging services and capabilities, position the group well to deliver growth this year, but at a somewhat lower level than our previous expectations."

Severfield-Rowen began life in 1978 and has grown to employ about 1,100 staff. Its major projects have included Heathrow Airport Terminal 5, Arsenal's Emirates stadium and the new grandstand at Ascot racecourse.

It is also lined up to work on London's 2012 Olympic stadium.

It will announce its full year results in April.