Breedon Aggregates Scotland, which has its headquarters in Angus, more than doubled its pre-tax profits to £4.27 million last year despite operating in a “challenging” market.
The company, which employed 375 staff north of the border last year and which has a 37.5% stake in trunk roads contractor Bear Scotland, managed to increase profits despite a marginal drop in revenues in the year to December 31 from £80.93m in 2011 to £80.53m.
BAS said a reduction in volumes on some core products had been offset by efficiency savings made during the year. The company also did not have to make any exceptional provisions in 2012 after impairments of £1.7m the previous year.
The company is part of the wider Breedon Aggregates organisation, which announced pre-tax profits of £5.79m for the year in March.
In newly posted accounts BAS said it was targeting new sectors such as renewables in the hope of increasing order volumes going forward.
“The board considers that the business has continued to deliver a strong performance in a marketplace which continues to prove challenging.
“The continued volatility in the oil markets and increasing operating costs led to a focus on recovering value by passing on some cost increases, and an attempt to diversify into new end markets.
“The business has sought to take advantage of the growth of the renewable energy sector in Scotland by enhancing its capacity and methods of proving value- added products.
“A reduction in volumes of value-added asphalt and concrete products which led to a 0.5% reduction in turnover was offset by a focus on cost management and margin growth, which allowed an increase in underlying operating profit by 26%.”
Looking ahead, BAS’s directors said the business would continue to be hit by draw-backs on roads and local authority contracts, but they expected new work to come from major national infrastructure projects.
However, they warned that prices were likely to rise for customers in the months ahead.
“The business continues to be influenced by a reduction in spending by Transport Scotland and local authorities in the areas in which we operate.
“We will continue to enforce rigorous cost-control measures and attempt to pass on cost increases to the end customer in order to maximise product margins.
“There are a number of significant projects in our market area in the coming year, including the Kennacraig Ferry terminal near Inverary and Inverness University campus.
“The business is also very well located geographically for the major developments of the Aberdeen Western Peripheral Route and the dualling of the A9, which represent substantial longer-term opportunities.”
Since the year end, Breedon has continued to grow its operations in Scotland following a £61m share placing that allowed the group to buy up assets from Aggregate Industries and Marshalls.
The agreement with Aggregate in Scotland has seen an extra 150 staff transfer to the operator and given it access to six quarries and various production assets.
At a single stroke, the Aggregate deal almost doubled Breedon Scotland’s total mineral reserve to around 400m tonnes enough to maintain production at current levels for more than 75 years.