JOHN Swan & Sons, the Edinburgh-based livestock auctioneering plc, has sustained a pre-tax loss of more than £360,000 as the demand for lamb in southern Europe was undermined by economic disruption and bad weather took its toll on farming operations in Scotland.
The company, which operates livestock marts at Newton St Boswells and at Wooler, Northumberland, said the two factors had contributed to a pre-tax loss of £114,082 at subsidiary John Swan Limited for the year to April 30.
This compared with a profit of £184,508 recorded by the division the year before.
Pre-tax losses at the parent company, John Swan & Sons plc, swelled to £362,177 - in contrast to a £238,782 profit last year - as professional costs relating to its plc status rose to £230,095.
Professional fees were booked at £179,726 a year earlier.
The rise in professional costs reflected a revaluation of the firm's land assets, undertaken to ensure its share price better reflected the underlying value of the business. This led to a rise in the value of its underlying assets in excess of £1 million. The company also reported a rise in pension costs during the year.
Alastair Ritchie, chairman of John Swan & Sons plc, said: "Sheep trade was badly affected [in the first half] by export prices, particularly in southern Europe. The chances of recovering all of that were never really very high. The auctioneering business had a good result in the second half, but not enough to make up the [slide for the first half].
"In common with everbody other than the really major businesses most mart businesses will have struggled a bit during that period.
"However, when you compare the start to the current financial year with the start to the last financial year, then there is fortunately an improvement."
James Allen, the chairman of John Swan Ltd, said sheep prices fell last year because there were fewer coming forward, which led to a fall in commission.
Mr Allen added that while cattle prices remained strong, they were fewer in number.
Mr Allen highlighted the progress made in the year by the company's other divisions, noting that Swan & Turner was building a reputation as an auction house for antiques, fine art and collectables in the Borders.
He also said John Swan Properties, its rural property agency, was showing "signs of an upturn".
John Swan & Sons has a long-standing strategy to sell assets not in use to return value to its shareholders. However, progress has slowed because of the drop in property and land values.
Shares in the company closed unchanged at 387.5p.
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