Ogilvie axes 150 jobs - and gives boss 23% pay rise

THE boss at one of Scotland's biggest construction groups received a 23 per cent pay rise last year despite turnover falling by nearly a quarter and 150 workers losing their jobs.

Stirling-based Ogilvie Group rewarded chief executive Duncan Ogilvie with a 752,000 package in the year to 30 June, compared with 613,000 in the previous 12 months.

The payout came as 150 jobs were axed at the group - which also includes a fleet hire business and an IT firm - slicing 5 million off the company's 22.6m wage bill.

That cost-cutting helped the business to post a pre-tax profit of 2.6m, up from 2.4m in 2009, according to accounts filed at Companies House. No dividend was paid.

But Ogilvie defended his package. He told The Scotsman: "My salary is linked to the profits of the group and so it had decreased over the past few years as profits went down.

"It went back up again last year because we returned a bigger profit compared with 2009.

"Although we've had to make redundancies, I think things have now levelled off. I don't expect to be hiring anyone in the construction business but I think we have the right amount of business now to support our current workforce."

The bottom line was boosted by Ogilvie's share of operating profits from its joint ventures, which amounted to 1.2m.

The 9.6 per cent rise in profits came despite group turnover falling from 201m to 159m, which the 60-year-old company blamed on delays to public-sector construction projects and a lack of bank lending to private-sector house buildings.

Ogilvie Construction posted a 44 per cent drop in turnover to 49.7m but still returned a pre-tax profit of 2.3m, down from 3.6m in the previous year.

Projects undertaken by Ogilvie included the refurbishment of the Sheraton Grand Hotel in Edinburgh, a 10m hospital revamp at Cupar, in Fife, and the 6m refit of North Lanarkshire Council's Time Capsule leisure centre in Coatbridge.

Ogilvie said the company was continuing to pick up more hotel jobs, including hotel work in Edinburgh for Whitbread, which owns the Premier Inn budget hotel chain.

Turnover at Ogilvie Homes edged up 4 per cent to 21.4m and the subsidiary swung from a pre-tax loss of 401,000 to a slim 98,000 surplus. The division said it had been successful in winning social housing contracts to counter the "challenging conditions" in the residential housing market.

Ogilvie's directors also praised the contribution of Freedom Houses, the company's joint venture with Aberdeen-based housebuilder Stewart Milne.

Meanwhile, Ogilvie Fleet - which leases cars to other businesses - reported that pre-tax profits revved up by 87 per cent to 2m, boosted by "buoyant" sales prices in the second-hand car market.

The acceleration in profits came despite turnover rolling back by 4 per cent to 87.8m.

Ogilvie added: "The fleet business keeps going from strength to strength. We've just started making a push into the Northern Ireland market."

Ogilvie Group's warnings over the lack of bank lending and delays to public-sector projects emerged just days after an influential survey showed the UK's construction sector had contracted last month.

Chartered Institute of Purchasing and Supply's purchasing managers index (PMI) fell from 51.8 in November to 49.1 in December, with any reading below 50 indicating retraction.

Economists had expected the PMI to remain in positive territory, with some analysts blaming heavy snow for the surprise contraction, the first since February.

Builders called for more government support for home buyers to boost the market.