A sixth-generation family timber merchanting business in Fife saw sales soar by £17 million last year.
New filings at Companies House show Glenrothes-headquartered James Donaldson & Sons Limited generated revenues of £153.5 million in the year to March 31.
The figure compares with a return of £136.5m in the prior year period and reflects the first full year of trading to include sales generated through Nu-Style Products, an Aberdeen-based business acquired by the group in 2016.
The division – one of six within the Donaldson umbrella – manufactures and supplies a range of products and services for the construction and associated industries, including washrooms, roofing and wall panels.
Group profitabilty was flat year-on-year, with the firm generating a pre-tax return of £7.65m.
In his strategic report to the accounts, group finance director Andrew Donaldson said Nu-Style Products had integrated well into the group and synergies continued to be leveraged.
However, he said margins had been hit as a result of increasing raw material costs.
“The Donaldson group of companies produced another set of excellent results for the year ended March 31, 2018,” Mr Donaldson said.
“The consolidated profit before tax fell just slightly to £7.66 million from £7.76m last year. At this level of profitability our return on turnover equates to 5%.
“The overall market, while remaining strong, has experienced continued price inflation.
“Both imported and domestically produced raw materials saw prices rising significantly over the course of the year and this resulted in a further squeeze of profit margins.
“Global demand for our products remains bouyant and we expect this trend to continued through the coming year.
“This price inflation, along with a full 12-month trading period for our Nu-Style acquisition, led to an increase in consolidated group turnover to £153.6m.”
The business is one of Fife’s oldest companies, having been established in Tayport in 1860 by James Donaldson and his two sons James and George.
The modern business sustained an average workforce of 767 in 2018, up from 694 in the prior year period, and Mr Donaldson said the group was in a good place.
“The group’s cash position remains strong which has created a very positive funding environment,” he said.
“At the year end, group borrowings remain extremely low and this will allow us to take advantage of all opportunities which may arise in the year ahead as we look to further grow our market share.”
Despite its confidence, the group flagged raw material prices and the UK’s exit from the European Union among the principal risks and uncertainties it faced.
“As we move closer to the UK exiting the European Union, it remains difficult to conclude the impact that this will have on our business, and the willingness of the outside world to want to trade with the UK going forward,” the group stated.
“Uncertainty, and the potential stifling effect this may have on investment in the UK and, in particular within the construction trade, risks future growth in our sector.
“The directors are monitoring this situation closely, however, the group remains agile and positive about the future.”