Ogilvie Group’s accelerating vehicle hire and leasing arm once again drove profits in the last financial year as it continued to benefit from high re-sale prices.
The Stirling-headquartered conglomerate said operating profit at its Ogilvie Fleet subsidiary jumped almost 50 per cent to £3.7 million in the 12 months to the end of June. Turnover in the business edged up to £105.4m, from £104.8m the year before.
The firm added almost 700 cars and vans to its fleet, taking the total to around 11,000. It sells the vehicles at the end of their contracts, which are usually around three years.
It said buoyant used car values had helped improve its margins, while the company’s growing scale helped it negotiate better deals for new vehicles from the manufacturers.
The fleet business helped underpin an 11 per cent increase in pre-tax profit at the parent company, to £3m. Group turnover rose to £179m from £160m.
The group’s construction and housing arms continued to find markets challenging during the year. Earlier this year the firm criticised the Scottish Futures Trust, saying the procurement body had failed to deliver enough work for the sector.
Ogilvie, founded as a construction firm in 1946, has managed to stay in profit since the financial crisis by cutting back its operations in that sector, turning down work rather than accepting “suicide” pricing. But finance director John Watson said conditions had improved considerably in recent months.
He said the firm had taken 100 reservations for homes in the past six months, more than during all of last year, as a raft of government initiatives made mortgages more available.
He added: “In construction we have definitely found signs of recovery.”
The firm plans to start taking on more staff in its construction arm in the new year, with ten to 15 recruits set to join its 150-strong workforce initially.
Watson said new contracts span both private and public sectors and include student halls of residence and a school.
Meanwhile, Ogilvie Communications achieved a profitable performance in the IT and communications sector and anticipates further growth from a strategy of diversification along with the introduction of new products and services.
The group’s Loy Surveys business delivered a “steady performance in a market that is now showing signs of recovery”. The company opened an office in Milton Keynes as part of a strategy for further expansion in England and Wales.
Chief executive Duncan Ogilvie said: “Once again, we have maintained a solid performance across the group, despite some challenging market conditions. However we are very cautiously optimistic of some signs of recovery in the construction and housebuilding sectors.”