Muir Group, the Fife-based contractor, housebuilder and property developer, has reported a fall in annual profits as “bad debt” and challenges in its contracting arm dragged on earnings.
The family-owned builder hailed positive results in a “challenging” environment, as pre-tax profits for the 12 months to 3 February dropped to £2.6 million, down from £3.3m in the previous year.
The Inverkeithing group, which includes Muir Construction and Muir Homes, attributed this decline to “potential bad debt”.
Muir said a provision of its full outstanding debt of £1.6m has been made, however the debtor is currently undergoing refinancing and “has given assurances that £1.1m of this sum will paid on completion”.
A one-off charge for pensions equalisation also affected other returns.
Its contracting division, which posted a loss of £523,000 compared to profits of £818,000 last year, also weighed on group earnings.
Profits at Muir’s housing arm remained flat at just under £3.3m.
Muir praised consistent revenues in an “uncertain” economic climate, recording broadly flat group turnover of £65.1m and pointing to key growth in the private housing, property development and timber kit manufacturing sectors.
Turnover in its housing unit increased by around 10 per cent to £32m, while its contracting business took a £6m hit with revenues of £24m.
In reports filed to Companies House, finance director James Watt said this was “principally down to lower construction opportunities with a higher level of house building and development activity”.
The average house price climbed by £12,000 to £206,000, while the number of house sales rose to 157 homes from 152 last year.
Muir announced an upbeat outlook for the current year, praising a “robust pipeline of activity”.
The group, which employs 267 staff, is currently working with prospective tenants for turnkey developments at Glasgow Business Park, and has already let a 10,000-square-foot office at
Aberdeen Gateway to decommissioning specialist Well-Safe.
Construction work is also underway at a 74,500-sq-ft warehouse and blend facility in East Kilbride for multinational brewing and beverage company Distell International.
Group chairman and company founder John Muir said: “This is a positive set of results given the challenging environment the construction industry is facing.
“Looking forward, the group is well positioned, with a strong debt free balance sheet and returns are expected to show a significant improvement in the current financial year.”