SCOTTISH Woodlands, the forest management to timber sales firm, has suffered a 16 per cent fall in profits which the company said reflected the impact of the strong pound.
However, announcing plans for a management change, the company said underlying trading was strong and described forestry as one of the country’s most vibrant industries.
Edinburgh-based Scottish Woodlands made £1.3m pre-tax profit in the year to September compared with £1.5m in the preceding year. The employee-owned firm saw reveneues fall six per cent annually to £69.5m from £74m.
But outgoing managing director Colin Mann said the company was pleased with the performance.
“Although turnover and profit is very slightly down on last year this was largely because of the strength of sterling and not because of less activity in our markets,” said Mr Mann. He will be succeeded by his deputy Ralland Browne in April after 10 years in post.
The comments highlight the challenges posed for producers by the strength of the pound last year.
Scottish Woodlands had to contend with the fact the strengthening of the pound made Swedish timber relatively cheap to import.
Scottish sawmilling giant BSW Timber noted recently the complications caused by the strength of the pound versus the Swedish Crown.
Conditions have changed in favour of UK firms in recent weeks following a sharp fall in the value of the pound. Sterling has come under pressure amid fears the UK could leave the European Union and the diminishing prospect of a rise in interest rates this year.
Mr Mann noted the results for the latest period were a big improvement on the figures for the year to September 2013, when the company made £1.2m profit on £64m sales.
Chairman Tom Jones said: “Profitability is now on a firm footing and the company has built a stronger balance sheet”.
He said the company had completed a well planned management succession as it eyed continued growth. The company noted the sector is worth £1 billion according to Forestry Commission research published in late 2015.
Scottish Woodlands manages forests for owners ranging from individuals to local authorities and harvests the timber grown on them.
Mr Mann is becoming deputy chairman.
Mr Jones will be succeeded as chairman by his son, also called Tom.
The Jones family’s sawmilling business, James Jones & Sons, owns 20 per cent of Scottish Woodlands.
Employees own the remainder. The company has 141 employees and 85 staff shareholders.
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