A Fife timber specialist that can trace its roots back more than 150 years has defied difficult conditions in the construction sector to post an increase in pre-tax profits.
Markinch-based James Donaldson & Sons Ltd, one of the UK’s largest wood processors, saw pre-tax profits rise by 8.4% to £2.2 million in the year to March 31, £177,000 ahead of the 2012 figure, while revenues stayed almost flat at £105.37m.
The company, which is in its 153rd year in operation and remains an independent family concern, said in its latest set of accounts that it had been a “steady trading” year and the business was well placed to achieve another satisfactory performance in the year ahead.
However, managing director Scott Cairns was more upbeat in his assessment following a stronger first quarter to the new financial year.
“This year is the more important picture,” Mr Cairns said.
“Since April it has been relatively good and it is definitely an improving marketplace it is not just seasonally. The weather has certainly helped with certain products, but there seems to be a real uplift in the market generally.
“The housebuilding statistics are a little better but our share of what seems to be available with NHBC (National House-Building Council) has been progressing pretty well. All of our businesses are modestly ahead of where they should be.”
The company increased its workforce by 65 during the year to take total staffing to 645.
It also made a £1.2m investment in new machinery at its sawmill at Chorley in Lancashire and launched a new west of Scotland focused insulation business.
Mr Cairns said the firm was more efficient and cost conscious thanks to lean working methods, and is now well positioned to take advantage of future growth opportunities.
“We invested quite a lot last year with a view to seeing further growth,” said Mr Cairns.
“When you talk about the construction sector, general construction is still very depressed but we do have a huge backlog in housing need.
“One way or another, we as a country simply have to build more housing stock than we have done in the last five years. In 2007/08 we built circa 230,000 houses in the UK and last year it was still only 115,000.
“Of that number we only built 7,500 in Scotland, so we have a long way to go.”
Group executive chairman Neil Donaldson was pleased with how the business had performed and said it had strengthened its overall offering during the year.
He said: “To raise profitability by 8.4% in challenging market conditions is a particularly commendable achievement. Our borrowings remain low and we have managed to grow net assets to £18m.”