INDEPENDENT tyre and exhaust fitter McConechy Holdings has seen a 51% surge in profits in spite of a dip in sales.
Accounts being filed at Companies House this month will show turnover at the Ayr business, which operates from 50 branches across Scotland and Yorkshire, fell 9.5% from £43.36 million to £39.24m in the 12 months to April 30, 2013.
McConechy trimmed its sales costs from £28m to £25.3m with administrative expenses also falling from £14.4m to £13.5m.
Finance charges were down from £829,165 to £656,166 as the company shaved more than £3.3m from its net debt. The figure stood at £9.4m at the end of the year.
A gain of £841,915 relating to a sale and leaseback of some branches was recorded in the accounts.
That gain, coupled with the lower finance charges, saw pre-tax profits come in at £863,464, up from £571,777.
Donald Carmichael, managing director, said: "It has been difficult for a number of years and it is good to see some positives coming through."
In the current trading year Mr Carmichael indicated there had been a clear upturn in business from the commercial sector.
He said: "It has been a long slow process but I would say our optimism is greater than it was last year, which is good.
"It is early days but we would see that it is encouraging there is greater economic activity.
"It is not so much replacement parts on trucks but it is replacement tyres which means they are running more kilometres and that is a bit of a bellwether on the economy."
Consumers are still said to be "price sensitive" but Mr Carmichael has been encouraged by the performance of an online e-commerce platform.
He said: "We now have our own online offering where people can go 24/7 to buy tyres from us and that is developing quite nicely. We are also interested to see that visits to our website in January are up 11% which is a real good indicator of activity out there."
Mr Carmichael said the company was looking into expanding its online offering to include ways to buy other services such as MOTs.
McConechy has opened one new location since the end of its financial year by taking on a former ATS Euromaster site in Kirkwall on Orkney.
Mr Carmichael said the company remained open minded about acquisition possibilities although there was nothing specific it was pursuing.
He said: "We are not aggressively looking for opportunities but if something comes along that is of interest we will look at it."
A target of further profitability and debt reduction in the current financial year has been set.
Mr Carmichael said: "I would expect the debt to come down further through normal cash generation and trading. That will continue to consolidate and improve our position."
Notes to the financial statement for 2013 show staff costs were trimmed from £8.8m to £8.1m with average employee numbers down from 275 to 348.
Mr Carmichael said there had been no formal redundancy process carried out but the company had looked to match wage costs to the lower turnover.
He said: "We have tried wherever possible to maintain staff [numbers]."
Directors' remuneration rose from £323,427 to £344,318 though the highest paid saw their pay package dip from £196,182 to £191,913.
Hector McConechy founded the firm in Ayr in 1956 and it is now chaired by his son Derek.
The most recent annual return said Mr Carmichael is the group's only non-family shareholder.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article