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Accountants report growing confidence

JOHNSTON Carmichael, Scotland's largest independent firm of accountants, has reported clear signs of confidence returning across the country after it posted a 7% increase in profits in its latest financial year.

BUILDING HOPE: Johnston Carmichael's Sandy Manson said construction is picking up. Picture: Klaklak Photography
BUILDING HOPE: Johnston Carmichael's Sandy Manson said construction is picking up. Picture: Klaklak Photography

The firm made a £10.57 million profit before partners' remuneration in the year to May 31, up from £9.87m in the previous period, as it capitalised on a marked improvement in conditions north of the Border.

"Right up until the 31st December last year we were still seeing a recession footing in the market," said chief executive Sandy Manson. "Since then we have noticed an upswing in confidence."

While Johnston Carmichael has benefited from booming oil and gas market activity in its north-east heartlands, Mr Manson said conditions appear to be improving across Scotland.

"Recovery is fragile for the likes of retail but we are seeing construction picking up and some of the sectors that were hardest hit are showing more signs of confidence," said Mr Manson.

He noted a range of clients have started showing a greater willingness to invest.

As Johnston Carmichael's clients range from large privately owned firms to small businesses, Mr Manson's comments may be seen as an encouraging indicator of the state of the corporate sector in Scotland.

The improvement in sentiment has led to an increase in work for Johnston Carmichael in areas like corporate finance and tax planning.

Mr Manson is confident the firm will achieve another increase in profits and turnover in the year to May 2014.

Turnover increased by 13% annually, to £33.4m, in the year to May, from £29.6m in the preceding year.

Mr Manson said growth was driven by the firm's merger with Aberdeen-based Ritson Smith during the year.

Johnston Carmichael also achieved an unspecified amount of organic growth.

Noting the integration of Ritson Smith had gone well, Mr Manson said Johnston Carmichael is in the market for more such deals.

"We will see further changes in Scotland, further consolidation," said Mr Manson. "We see significant growth potential in the central belt."

Johnston Carmichael has been pleased with progress at the office it opened in Stirling last year.

It has 10 other offices including bases in Glasgow and Edinburgh. The company's head office is located in Aberdeen.

Mr Manson declined to make any comment on the possibility of Scotland becoming independent following the referendum scheduled for next September.

While the market for bank funding remains challenging, Mr Manson has been encouraged by the steps taken by the Bank of England to stimulate activity, through the Funding for Lending scheme.

However, he said banks would have to work hard to rebuild confidence in them following the criticism sector players have faced in recent years.

The latest Business Confidence Monitor survey for the Institute of Chartered Accountants in England and Wales and Grant Thornton found firms in Scotland expect to increase sales and turnover in the coming year.

Confidence levels are up on last year but slightly below the UK average.

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