SCOTTISH coal and smokeless fuel supplier Fergusson Group suffered another tumble in profits in its last financial year even though its turnover rose, as a fall in world coal prices and higher operating costs hit its margins.

Fergusson, which operates as an importer, exporter, processor, and distributor, also cited the significant impact of the mildness of last winter on its household fuel supply business during the year to March 31.

The Stirling-based company, which employs about 200 people and describes itself as Scotland's largest supplier of solid fuel, has revealed its pre-tax profits fell to £1.85 million in the year to March 31, from about £4.45m in the prior 12 months.

Fergusson made pre-tax profits of £10.2m in the year to March 2010, on turnover of £119.7m.

Tom and Alan Fergusson, who own and manage the company, said yesterday their business had "responded effectively" to difficult market conditions across the solid fuel sector.

In the year to March 2012, turnover rose to £121m, from about £119.5m in the prior 12 months.

Fergusson moves in the region of two million tonnes of solid fuel each year.

It has its main hub at the Hunterston terminal in Ayrshire, and this facility processes a variety of solid fuels. The firm supplies industrial and domestic markets, with its customer base including the energy sector.

Fergusson operates throughout the UK and in mainland Europe.

In a joint statement, Tom and Alan Fergusson said: "Our margins were affected by a fall in world coal prices and a rise in operational costs. Our domestic distribution business was also heavily affected by last year's unusually mild winter.

"However, we have responded effectively to the conditions and have been able to maintain group sales by remaining focused on a retained customer base and specialist domestic and industrial markets."

The brothers added: "Our continued focus on strengthening our supply chain and investing in infrastructure will also ensure we are positioned to meet the demands of our customers and deliver new growth opportunities across the marketplace."

As well as supplying coal and smokeless fuels, Fergusson supplies wood, peat briquettes, and kindling.