PLANT, tool and equipment hire company GAP Group has posted record annual turnover of nearly £158 million, and is confident of increasing its market share as it continues to expand and recruit.

The Glasgow-based company’s latest accounts show pre-tax profits dipped to £15.8m in the year to March 31, from £18.6m in the prior 12 months, reflecting a tough pricing environment and heavy investment in future growth.

However, the profits are nearly double the £8.4m achieved in the year to March 2013, and contrast with sizeable annual pre-tax losses unveiled recently by rivals Speedy Hire and HSS Hire Group.

The family-owned GAP Group’s turnover climbed to a record £157.7m in the year to March 31, from £143.3m in the prior 12 months.

Douglas Anderson, joint managing director of GAP Group, signalled he was satisfied with the results, while emphasising his desire for further progress.

He said: “If you are running a business and you are happy, it means you are complacent. If you are complacent it means you are only going one way. We are never happy. If 50 per cent happy is good, we are probably 48 per cent happy. We could be happier.”

Mr Anderson quipped: “I am taking the view that I am never going to be 75 per cent happy. If it goes down to 35 per cent, we are going to sell the business because we are fed up.”

Chairman Danny O’Neil, who attributed the “intensely competitive” pricing environment partly to an absence of inflationary pressures in the broader economy, said: “I think we have done a good job over the last few years.”

He projected rises of about 10 per cent in both turnover and profits in the current financial year to next March.

And he expressed confidence that the company could increase its UK market share further from the current level of between four and five per cent.

He highlighted the benefits of the company’s major diversification in recent times, which has seen it add the hire of non-mechanical plant including temporary fencing, crowd-control barriers and road-crossing plates, lifting, surveying and safety equipment, and toilets to its traditional plant and tool business. GAP has, on the back of its expanded product range, built up an event services business.

Mr O’Neil, noting GAP’s heavy investment for future growth, pointed out that the results for the 12 months to March 31 this year included start-up losses relating to the company’s new London tools and access equipment business.

He said new divisions launched in the last five years had accounted for about 25 per cent of turnover in the year to March.

Mr O’Neil added this had now risen to about 30 per cent, and highlighted a “broad aspiration” that this would rise eventually to 50 per cent.

He noted that GAP Group’s capital expenditure on kit for hire had been £75m in the year to March, with a further £12m spent on sites.

GAP Group, which has nearly 460 employees in Scotland including around 160 at its head office in Glasgow, opened 23 new stand-alone operating locations during the year to March 31.

The company, which has more than 130 depots in the UK including 25 in Scotland, had raised its total workforce to 1,502 by March 31, from 1,347 a year earlier.

And GAP Group, which counts Scottish Water among its customers and recently won a major contract with Thames Water, remains firmly in expansion and recruitment mode.

Much of the company’s business stems from its strategic focus on infrastructure-related projects and the utilities sector.

Looking ahead, Mr O’Neil said: “This year, we will probably grow by about 10 per cent. We don’t think our [profit] margins will deteriorate…

“The employee numbers will follow the growth in turnover and profit really.”

Mr Anderson, whose son Mark now manages the company’s plant and tool hire operations in Scotland, runs GAP Group with brother Iain.

GAP Group was founded by Douglas and Iain Anderson's father, Gordon Anderson, in 1969. The brothers have been running the business since 1988.

Chris Parr, who previously headed paper manufacturer Tullis Russell, joined GAP Group in May as financial director. Fife-based Tullis Russell fell into administration in the spring of last year.

Mr Parr highlighted growth opportunities for GAP Group, contrasting this situation with the protracted troubles of a paper manufacturing sector hit hard by over-supply.

He said: “It is fascinating….being in a market that is highly-fragmented, with a market share of just four per cent. It is a fantastic point in my career to be stepping into something different.”