Teesworks: Dividends increased to £30m despite plummeting income

Latest accounts for Teesworks Ltd show increase in payments to shareholders

Sooner than expected this week, it’s the latest edition of The Teesside Lead, and it’s thanks to our friends at Teesworks Ltd, who have published their accounts for 2024-25.

It’s now nearly three years since I started reporting on this story as my full-time job. If you appreciate my work, click subscribe and get The Teesside Lead sent to you twice a week for free. A paid annual subscription is £49.

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Thanks to everybody who does this! I took a huge risk in changing careers to become a journalist, and then six months later took an even bigger risk when I left The Northern Echo with no job lined up (and a child on the way) because I couldn’t pursue the Teesworks story in the way I felt was needed.

To say I’m committed to covering this would be an understatement. It really means a lot to have built up a modest following over the last three years chipping away at this story.

I’ll be back with another edition on Sunday. Until then, stay safe in the snow!

Leigh

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Teesworks (Image: Leigh Jones)

The latest published accounts for Teesworks Ltd show an increase in dividends paid to shareholders - up to £30m, despite revenue for the year dropping to only £6m.

Turnover for 2024-25 dropped to £6m from £22m the previous year, but dividends increased from £20,250,000 to £29,700,000. Elsewhere in the accounts, it’s revealed the private businessmen in charge of the company paid a company they own £2.5m, although that’s less than the £8m they paid the same company the previous year.

Teesworks Ltd company was set up as a 50-50 joint venture between the public South Tees Development Corporation (STDC) and local businessmen Chris Musgrave and Martin Corney to redevelop the site of the former Redcar steelworks. However, the businessmen were controversially given 90 per cent of the company for free in 2021.

That equity transfer was one of the main drivers of a review of governance of the regeneration project at Redcar, which delivered more than 20 recommendations for improvements for Tees Valley Combined Authority (TVCA), which oversees STDC.

The latest accounts mean that since becoming main shareholders of Teesworks Ltd, Corney and Musgrave have paid themselves (or companies they control) £124,362,866.

The figure includes over £74.5m in dividends and £49.8m for “marketing and other consultancy services” which it has paid to DCS Industrial Ltd, a company which is owned by both Corney and Musgrave.

The Tees Valley Review was launched by the government after allegations of corruption were made in 2023. When it was published in January 2024, it said it found no evidence of corruption, but that Corney and Musgrave were yet to spend any of their own cash on the venture - which has seen more than £550m of public money invested - and seen them extract £124m.

Teesworks Ltd began the most recent financial year (2024-25) with £40m in the bank. Much lower than the start of the previous year where cash reserves stood at an incredibly healthy £94.3m. Despite having so much liquidity, Corney and Musgrave have paid themselves £61m in the last two financial periods, leaving the company with only £2.7m in the bank.

Over the last four years, the duo has paid themselves between £25m and £38m each year.

The argument behind the change to the 90-10 agreement was that cash generated by Teesworks Ltd through leasing land would be used to fund future development of the site, although the Tees Valley Review said there was no legal obligation for the company to do this.

The review also recommended renegotiating the 90-10 settlement, but Corney and Musgrave formally rejected this idea in a letter to STDC in September 2024, in which they claimed: “the [financial] return to the private sector partners is a fraction of that to the public sector partners.”

There was “no formal partnership agreement” setting out expectations of the Teesworks joint venture according to the Tees Valley Review. Giving evidence to the review, Martin Corney said he had an office at the Teesworks site where he “practically lives”.

A statement in the latest accounts for Teesworks Ltd shows the company has use of an office space owned by a related party (STDC) which it uses on the basis of “a verbal agreement yet to be formalised”. Given the concerns about value-for-money arrangements and governance which have led to the government issuing a Best Value Notice to TVCA in 2025, this sort of detail should be raising alarm bells in both Whitehall and TVCA.

This arrangement, according to previous accounts statements, was apparently entered into while the Tees Valley Review’s investigation was in full swing.

When asked about this arrangement, TVCA did not respond.

Tees Valley mayor Ben Houchen stood down as chair of STDC last year after new government guidelines were published to avoid conflicts of interest where metro mayors lead development corporations they set up. This followed the Tees Valley Review’s advice which stated oversight of STDC by Ben Houchen in his role as mayor was “complicated by the fact that he is also Chair of STDC and therefore this is not an independent function.”

One of the most controversial parts of the Teesworks project has been the removal and sale of scrap after demolition on the site. The latest accounts show a large drop in sales of scrap.