THE four Scottish business heavyweights who rescued bus and coach builder Alexander Dennis from the brink of collapse have reaped £1.2 million in dividends as annual profits at the company jumped by more than 40%.
Falkirk-based Alexander Dennis’s latest accounts reveal a pre-tax profit of £4.5m for the 2010 calendar year, compared with £3.2m the year before.
At the same time, turnover slipped to £283m from £290m last time, largely on the back of the depressed UK bus market.
However, the increased profits mark another major step in the turnaround of fortunes for the former TransBus operation that almost folded in 2004 after parent Mayflower declared itself insolvent with a £20m hole in its accounts and a £200m debt pile.
Alexander Dennis, which industry observers regard as a phoenix from the ashes, illustrating what can be achieved when the Scottish business community pulls together, began life decades earlier as Walter Alexander, but was bought by Mayflower in 1995.
Scots business tycoons Sir David Murray, Sir Brian Souter and Ann Gloag, as well as Edinburgh merchant bank Noble Grossart rescued the company out of administration for around £90m after Mayflower went down in economic aftershock of the September 11 terrorism attacks in the US.
According to Alexander Dennis’s latest annual return obtained by The Herald from Companies House, Stagecoach chief executive and co-founder Sir Brian, the group’s largest shareholder, holds 5,066,667 shares, or 33.3% of the share capital, which translates to a 2010 dividend payout worth around £400,000.
Stagecoach placed orders for new buses worth about £40m with Alexander Dennis in 2010.
Meanwhile, Murray Capital, the private equity vehicle of the former Rangers chairman, owns 4,600,000 shares, or 30.3% of the company’s share capital. This translates to a £363,600 dividend payment.
Sir David has been a supplier to the bus maker through his metals businesses.
Noble Grossart Investment also reaped £400,000 in dividends.
Stagecoach co-founder and Sir Brian’s sister Ann Gloag, who took 1,013,333 shares in Alexander Dennis following its 2004 rescue, gets a dividend payout of about £79,200.
At the same time, the company’s annual return reveals that Alexander Dennis chief executive Colin Robertson, who joined in 2007 and was not one of the original investors, holds 5.6% of the shares and earned a dividend payment of around £67,200.
However, it is understood that Mr Robertson’s stake is linked to performance targets and is likely to rise in the coming years.
Company spokesman Bill Simpson yesterday declined to say whether Mr Roberston’s shareholding had already been increased this year.
Nonetheless, he told The Herald: “This was an outstanding performance by Alexander Dennis, particularly because the UK bus market was down by 34%. So we clearly outperformed the market.
“Over 2010, we also had a 20% increase in our export sales but while turnover over all was down, profits were up.
“That’s down to fact that over the past five years we’ve been rebuilding the business with improvements, and now we’re beginning to reap some of the benefits.
“This year, we expect to grow turnover 30% and we’ll see further improvements in the bottom line. Our order book this year is very strong.”
He added: “After almost disappearing in 2004, it’s amazing just how far we’ve come.”
Earlier this year, the Falkirk-based bus builder secured a two-year deal for about 440 vehicles for FirstGroup, the Aberdeen-based transportation company, that will safeguard 960 jobs in Scotland and 1000 at Alexander Dennis’s two English factories – Scarborough, North Yorkshire, and Guildford, Surrey.
In January, Alexander Dennis won a £25m order to supply 120 vehicles to NZ Bus in Auckland, New Zealand. The buses were assembled at the company’s Falkirk plant and sent in kit form to New Zealand, where they have been assembled by a partner company.
The contract was awarded to the Scottish group after a global tendering process.