COAL and smokeless fuel supplier Fergusson Group has brushed aside “challenging” market conditions to report a solid rise in turnover and steady profits.
Newly-released accounts show that the Stirling-based firm – jointly owned and managed by brothers Alan and Tom Fergusson, pictured below – generated total sales of £145.8 million in the year to the end of March, up from £116.2m in the previous 12 months.
Pre-tax profits came in at £2.56m, a modest improvement on the £2.46m banked in 2013.
The firm said it had “responded effectively” to a backdrop of declining international coal prices by adding new outlets across the UK and Ireland, increasing sales to its core domestic coal, industrial and generation markets, and further improving operational efficiency and flexibility.
Fergusson, which draws its supplies from a number of surface mines across Scotland and north-east England, supplemented by imported coal, recently agreed an extension to its supply deal with ScottishPower at the Longannet power station near Kincardine in Fife. A new import and processing hub is due to be established at the Port of Tyne early in the new year, complementing existing operations at Hunterston and Port of Blyth.
The group said it would also continue to look for “niche opportunities” in the specialist industrial markets for coal, both in the UK and overseas.
In a statement, the firm’s joint chief executives said: “We will retain a strategic focus on the specialist house coal and industrial markets. While house coal demand will continue to be weather-sensitive, we expect underlying demand will remain robust for the foreseeable future, given coal’s price advantage.
“Further opportunities to expand our sales network in the UK and Ireland are planned in 2015 and we will continue to ensure our product and service delivery model is underpinned by efficient and flexible cost structures.”
They added: “We are of the opinion that coal-fired generation will remain an important contributor to the UK’s energy mix into the mid-2020s at least, delivering affordable and secure power supplies.
“Whilst generation coal demand levels are expected to decline over that period, it is envisaged that overall market size will be more than sufficient to support the group’s volume aspirations.”
The co-owners stressed that power station coal would continue to be an important sector for the group with a focus on “maintaining market presence through enduring supply relationships with long-term coal fired generators”.
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