Dundee-based steel stockholder Brown & Tawse put a pre-tax loss of almost £291,000 last year down to exceptional expenditure which would not be repeated.
The business that was started in the city’s Exchange Street 136 years ago saw its turnover fall by 8.23% to £14.48 million in the 12 months to April 3 2016.
Director Ian Harding said the decrease was due to the steep fall in steel prices throughout the financial year which more than offset an increase in volumes.
Gross margins were 32.5% of sales, compared to 30.3% in the previous year, which reflected improvement in the sourcing of steel products.
Distribution costs and administrative expenses were higher, resulting in a fall in operating profit from £455,355 to £246,844.
The accounts showed £188,916 in written-off investments and a £248,057 exceptional cost associated with relocating the Premier Lasertube division to larger premises in Leeds.
As a result, the company suffered a loss of £290,942 in contrast to the
pre-tax profit of £260,253 made in 2015.
Mr Harding added: “The directors believe this to be a very creditable
outcome, given the decline in stock values during the year.
“The company has out-performed many of its peers in the stockholding industry by reason of its broad customer base and the lack of concentration in a narrow range of market sectors.”
Stocks decreased by £774,361 due to the decline in steel prices and to shorter supply chain lead times, but he said the company continues to have a strong
balance sheet with shareholders’ funds of £4.16m.
The board continued to approve capital investment, and capital additions in the year came to more than £1.1m.
Mr Harding said the steel industry in the UK and Europe still has a long way to go to recover the volumes last seen in 2007/08, but the company has continued to emerge in good shape from the recession.
Steel prices started to recover in the second quarter of 2016 from the
unsustainable lows in the first quarter.
He added: “Demand continues to be steady and, with increasing market prices, the directors are expecting a
satisfactory trading result in the 2016/17 financial year.”
With a workforce of 77, Brown & Tawse now operates from headquarters in Dundee’s West Pitkerro Industrial Estate.
It also has a branch in Aberdeen as well as a base in Leeds.
It is a wholly-owned subsidiary of Steelstock UK Ltd.
