Murray Capital, Sir David Murray's flagship private investment vehicle, has reported a turnaround in performance in its first year after being hived off into family ownership.

The company, run by Sir David's son, David D Murray, was demerged from Murray International Holdings in 2010 as part of the major restructuring of Sir David's empire and its refinancing by Lloyds Banking Group.

New holding company Murray Capital Group generated enough cash in 2011 to cut the debt within its portfolio from £11.7m to £7.3m, a spokesman for the group said yesterday, adding that it was part of the overall debt reduction being implemented across Sir David's business empire.

"The company has no bank debt with each investment financed on a stand-alone basis," he added.

David D Murray said: "Given we are a family office, we are investors for the longer term and will work with our management teams to secure exits at the appropriate time. The family is now focused on building and retaining a legacy for future generations."

The group said turnover was up by £400,000 to £94.6m, while the operating result on a continuing basis had reversed from a £1.8m loss to a profit of £2.8m. The profit distributable to reserves was £1.1m versus a loss of £700,000 in 2010, while net assets had recorded a 15% increase to £13.7m.

Accounts for the Murray Capital subsidiary, made available at Companies House yesterday ahead of the holding company accounts, show remuneration of the highest-paid director, assumed to be Mr Murray, rising from £228,804 to £360,825.

The group's major investments are in Falkirk coachbuilder Alexander Dennis, Glenrothes-based data cabling manufacturer Brand-Rex, Livingston-based IT group Capito Holdings, Scottish recruitment agency Quality-Link, and Sir David's own steel business Murray Metals. Brand-Rex was last year ranked leading cable supplier in the UK for the third consecutive year, while Capito continued to perform well.

David D Murray commented: "We are happy with the performance of the portfolio, especially given the underlying market conditions. We continue to look for new investment opportunities in Scotland and the UK, although we remain cautious due to the economic outlook."

He added: "Our core investment strategy remains supporting traditional economy businesses with strong domestic markets and, importantly the potential for, or an existing, export market.

"These will be cash generative assets led by strong management teams. We are looking at opportunities in sectors such as manufacturing, engineering, energy and some select property opportunities."