Family-owned Fife timber specialist James Donaldson & Son is looking ahead with confidence after the upturn in the construction market helped boost profits.
New accounts filed at Companies House show the firm which is based at Haig House in Markinch and has grown to become one of the UK’s largest forest products, merchanting and timber engineering businesses achieved an 11.2% rise in turnover to £117.1 million in the year to March 31.
Pre-tax profits for the period came in at almost £2.5m, up from £2.2m for 2013, and the 154-year-old firm said it was confident of delivering a further “robust” performance in the current financial year.
“There were signs of improvement in market conditions, particularly in the last quarter of the financial year,” the company secretary and finance director Ian Hawkins said in the strategic report to the accounts.
“We managed to increase sales in each of our three core business entities and, overall, can report turnover up by 11.2%.
“Pressure on margins continued, however, and this is an area where we will look to improve in the year ahead.
“The group’s overheads were generally well controlled. In percentage terms we can demonstrate a fall in distribution and admin costs from 21.4% to 20.6%.
“Profit before tax has risen by 13.1%. Moreover, adjusting for the pension scheme curtailment gain of £249,000 in last year’s figures, the increase equates to 27.5%.
“The directors consider that the profit before tax outcome for the year at £2.492m represent an excellent performance for the year.”
The group has four trading subsidiaries MGM Timber (Scotland), Donaldson Timber Engineering and James Donaldson Timber and James Donaldson Insulation which are variously involved in timber importation, sawmilling, the design and manufacture of roof trusses and the sale of insulation products.
The firm employed an average of 650 staff in the year to March, an uplift from 616 the previous year with a total of 375 workers involved in the production side of the business and 275 in administration.
Total staff costs for the year came in at £17.73m up from £16.49m in 2013 while directors’ emoluments remained static at £583,000.
The accounts for the year to March showed a significant reduction from £3.99m to £0.99m in bank debt, a move that resulted in the firm’s gearing ratio falling from 28.4% to 11.3%.
They also noted market conditions, specifically in the UK new-build housing sector, and the price of raw materials as the principle risks facing the group.
However, the company was upbeat about its trading prospects and said its skilled workforce was key to its ongoing success.
“The group has delivered an excellent trading performance and can boast a strong balance sheet together with comfortable funding availability,” Mr Hawkins said in his report.
“As such, the directors consider it is well placed to produce another robust performance in the year ahead.”
The group is led by executive chairman Neil Donaldson, who represents the fifth generation of the Donaldson family to be involved with the business.
The line has now extended into a sixth generation, with sons Michael and Andrew having joined the firm in recent years.