A near £2 million share-based payment to employees restricted the pre-tax profit at Glenrothes-based network infrastructure solutions provider Brand-Rex last year.
The group that produces high-speed copper and fibre-based cable and connectivity systems for IT and data communications was taken over by US firm Leviton in December.
The Brand-Rex accounts for the year to December show turnover down by 7.2% to £67.38 million.
The reason for the fall was foreign exchange costs, the delay in certain projects and the ending of some lower margin sales in France although the last factor was mitigated by growth in the Middle East.
The profit before tax was reported in the profit and loss account as £3.54 million, a fall of 23.4% from the £4.625m in 2014.
The company’s strategic report explained, however, that had it not been for exceptional items of £1.997m associated with share based payments to staff, profit before tax would have increased substantially from £4.625m to £5.54m, a rise of almost 20%.
The exceptional administrative expense of £1.997m was triggered on the sale to Shire Holdings, a wholly owned subsidiary of Leviton Manufacturing.
Equity-settled share options were awarded to Brand-Rex employees prior to the sale to Leviton for £1.553m, and Brand-Rex employees who held B1 and B2 shares were entitled to value uplifts for £444,000.
Leviton specialises in wiring devices, energy management, security and automation and data network solutions for industry and commerce.
The acquisition will allow Brand-Rex to enhance its product offering in core European, Middle East and Asia Pacific markets.
Brand-Rex director Ian Wilkie said its markets remain stable, with profit growth in core business areas as economic conditions in some territories improved.
He said the group’s development efforts in new territories continued to bear fruit.
Its data communication business holds a leading position in Europe and is focusing on extending its market reach to Africa, Middle East., Asia and South America.
The group enjoyed a notable contract win in the Netherlands where it cemented its strong reputation. It also won key data centre projects in the UK and for Telecom Italia in Italy.
Growth in the Middle East included such key projects in the Doha Festival City and Mall of Qatar, and for the Ministry of Education in Saudi Arabia.
Brand-Rex’s high performance cabling business produces control, communications, power and instrumentation cables for diverse industrial applications and niche markets including automotive, rail infrastructure and defence.
With headquarters in Glenrothes, the group has manufacturing, distribution and research and development facilities in the Fife town and in Leigh, Lancashire.
Brand-Rex employs more than 300 staff and has 10 global offices in more than 50 countries.
